ALBANY, New York, April 8 City and town
governments having serious financial difficulty in New York
state will have their names released in the coming weeks by the
state's top financial watchdog, using a new monitoring system
designed to avoid drastic measures such as bankruptcy or
U.S. towns, cities and villages are struggling financially.
Last week, a federal court deemed Stockton, California, fit for
municipal bankruptcy. In Michigan, an emergency manager took
over Detroit earlier this year.
Those are outcomes that New York Comptroller Thomas
DiNapoli's Fiscal Stress Monitoring System was designed to
avoid. DiNapoli said the state so far has seen no local
government bankruptcies despite the ravages of the financial
crisis in 2007-2009.
"Setting the bankruptcy precedent in New York would send the
wrong message to the municipal bond market," said DiNapoli at a
conference at the Rockefeller Institute of Government in the
state capital Albany on Monday. "Such a step could make
investors think twice about lending to other municipalities,
especially those already suffering from severe fiscal stress."
The first names of New York municipalities will be released
towards the end of May, according to DiNapoli's office. The
system will also monitor school districts.
There could be around a dozen names in the "significant
fiscal stress" category, according to a person familiar with the
matter. The list could include the names of known problem
municipalities such as the town of Long Beach in Long Island, or
Rockland County as well as other municipalities whose fiscal
problems are not widely known.
The system is designed as an early intervention mechanism
with the Comptroller's office offering technical assistance,
training and planning to problem municipalities and school
districts, DiNapoli's office said.