ALBANY — If New Yorkers had to pay off the debt owed by local governments across the state, the tab would come to $3,916 per person.

That is one of the findings auditors for state Comptroller Tom DiNapoli came up with in reviewing the indebtedness of governments running counties, cities, towns, villages and school systems outside of New York City, according to a report issued Thursday.

BORROWING SLOWED

While the local governments were collectively on the hook for $43.6 billion in financial obligations last year, DiNapoli said their penchant for borrowing has leveled off since the Great Recession eased in 2010.

Those in charge of local government and school district budgets, he suggested, should be prudent when considering taking on debt.

"When a local government issues debt, it should have a long-term plan in place and be mindful of the impact on its budget and taxpayers," DiNapoli said.

 SCHOOL DISTRICT DEBT

The report found the tapering off in overall borrowing — both bonds and short-term notes — was largely due to school districts decreasing debt levels. Public school districts, nonetheless, still account for $17.1 billion of the total amount owed by local governments — or $10,914 per student.

Statewide, the school district with the highest debt per student was a rural one in Otsego County, the Worcester Central School District, with outstanding obligations that amount to $57,410 per student. The audit notes that school districts are partially reimbursed for borrowing costs through state building aid.

FIRE DISTRICTS

Bucking the trend of curbing reliance on borrowing were local fire districts.

While they account for only a small percentage of total local government borrowing, 444 of the state's 896 fire districts had debt obligations on their books in 2018, when their collective indebtedness reached $505 million.

Borrowing to pay the tab to build new firehouses contributed to that tab, with the projects running from $5 million to $15 million, the audit found.

ESSEX COUNTY

There was wide variation among counties in the amount of debt they have run up per capita.

Essex County, ranking 51st out of the 57 counties outside of New York City in total population, had the state's fourth highest overall per capita debt — $4,734, or more than double the county with the lowest per capita debt, nearby Washington County, at $2,324

Two measures for determining the affordability of local government borrowing involve comparing the debt to residents' income and examining the debt as a percentage of local real property value, the report noted.

DiNapoli's review highlights the fact that the ability of local governments to raise funds from the property tax has consequences on their ability to repay debt.

The audit suggested that many upstate counties face greater impacts to their purse strings from debt than the more affluent and more populous suburbs of New York City. In that downstate region, overall local debt tends to be a relatively small percentage of property values.

 

TO ENSURE EFFICIENCY

Mark LaVigne, the deputy director of the New York State Association of Counties, told CNHI the state's county governments rely on borrowing at times to "ensure public facilities operate as efficiently as possible given the resources available."

Under the state Constitution, counties must adhere to a total outstanding debt limitation of no more than seven percent of the five-year average of full valuation of all taxable property in the county, he explained.

"Basing the debt limit on property value provides some measure of the affordability of the debt incurred because it provides a taxing base upon which the county can draw in future years," LaVigne added.

Joe Mahoney covers the New York Statehouse for CNHI's newspapers and websites. Reach him at jmahoney@cnhi.com

 

COUNTY BY COUNTY

 

Local debt as a percent of real property value is as follows for these counties:

Niagara: 5.1 percent

Delaware: 2.1 percent

Chenango: 6.1 percent

Otsego: 3.1 percent

Schoharie: 4.9 percent

Clinton: 4.9 percent

Essex: 2.6 percent

Franklin: 4.6 percent

Of total local government debt in 2018, counties accounted for $13.4 billion.

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