What's New

Zack Hutchins
Director of Communications

September 29, 2004

Local-government spending outpaces inflation, comptroller reports

New York's local governments and school districts increased spending by 30 percent, or 13 percent after accounting for inflation, from 1997 to 2002, state Comptroller Alan Hevesi reported.

"The costs of operating a local government continue to rise," the Office of the State Comptroller said in its 2004 Annual Report on Local Governments. "The result is higher property taxes, with recent evidence suggesting an acceleration in this trend."

School districts outside New York City saw particularly large spending increases, an average of more than 37 percent, over the period. Property-tax collections in those districts rose 27 percent, even though state and federal aid also increased sharply -- 36 and 74 percent, respectively.

Among all localities and school districts, property-tax revenues rose 20 percent, to a total $29 billion in 2002.

Local-government expenditures statewide, including New York City, totaled $114 billion in 2002, according to the comptroller's office. That was roughly one-third more than the state government spent in the same year, partly because New York State imposes heavy costs on local taxpayers for Medicaid, public-employee benefits and other programs.

"The combination of rising costs and stagnant revenues from property taxes and other sources is creating daunting fiscal challenges for many local governments, particularly upstate cities," Comptroller Hevesi said. Total property-tax revenues to cities in the state rose 6 percent, less than half the inflation rate, during the five-year period.

"As more people move away, the economic base of cities has deteriorated," leaving a higher burden on remaining residents and businesses to maintain current service levels, Hevesi said. Elected officials must "look for ways to consolidate and reduce costs for services," he said.

The comptroller's press release and report are available here.