8:55am

Wed May 15, 2013
Politics and Government

Cuomo details local government bailout plan

Gov. Andrew Cuomo outlined his proposal for a new local government restructuring board to help financially distressed communities deal with long term budget problems.


Cuomo offered more details of his previously announced plan to set up a restructuring board to help local governments on the brink of insolvency. The governor says the average population of upstate municipalities is on the long term decline, while local budgets are growing. He says that’s simply unsustainable, even with a state aid program that covers up to one quarter to one third of the budgets of some cities, including Buffalo, Syracuse and Yonkers.

Cuomo says there are over 10,000 local governments, far too many for citizens to afford. He says the restructuring board, which municipal leaders could consult, would offer "outside the box” thinking to make big changes.

“There is no answer within the box," said Cuomo. “These localities have been within the box for twenty years and the box doesn’t work”.

Cuomo says the restructuring board could also provide political cover for local government leaders who need to make unpopular decisions, like laying off workers in order to consolidate services, or reducing the number of city council members or supervisory boards.

No municipality would be compelled to consult the board. And the local governments would not necessarily have to follow the board’s recommendations.  But if part of the restructuring deal involves more government funding, then the municipality would have to follow the board’s advice to the letter in order to get the money. Cuomo says the voluntary approach could help communities who are loathe to take the more “highly invasive” step of asking the state to impose a financial control board.

The board would be made up of the governor’s budget director and secretary of state, as well as the state comptroller and attorney general, and a financial expert from the private sector.  

Cuomo was joined by some mayors and county executives, who praised the plan, including Jamestown Mayor Sam Teresi , who called it “another tool in the tool chest” for local governments.

 “I like the notion of it because it is voluntary,” Teresi said.

Representatives of the New York Conference of Mayors and New York Association of Counties also praised the proposal, but were noncommittal about how many of their members might want to use the restructuring board, though they predict that many local government leaders will take a look at it.  

Cuomo’s plan does not recommend changes to current collective bargaining laws with unions -- rules that unions support. But the governor is offering local governments and their unions a way to opt out of what’s known as binding arbitration, which allows the municipality and its union to consult a three-member panel when a contract is deadlocked. The unions and municipalities could both agree to opt out of binding arbitration and seek a resolution from the financial restructuring board instead. The governor says he hopes to offer reforms of the entire binding arbitration process at a later date. The law sunsets in late June.

Cuomo’s plan needs final approval from the legislature, and he says he hopes to win that before the session ends late next month.

A spokesman for Assembly Speaker Sheldon Silver was also noncommittal, saying only that the speaker would review the proposal.

Related program: