Citing the city of Yonkers as one example of overreliance on state funding, Gov. Andrew Cuomo Tuesday proposed a financial restructuring board to help distressed municipalities manage their finances.
Cuomo”™s proposal includes an alternative binding arbitration process for municipalities and unions to expedite contract negotiations.
Municipalities have been hit hard during the economic recession, facing rising pension and health care costs while struggling to keep budgets within the 2-percent tax cap on the tax levy.
Cuomo said more state aid is not the answer, noting that 24.46 percent of  the Yonkers city budget is from state funds.
The board would include the state budget director, secretary of state, attorney general, comptroller and one private-sector restructuring professional. The budget director would establish standards to determine which local governments qualify as fiscally distressed. Distressed local governments could request the assistance of the board and the parties would work together to identify a specific restructuring plan.
The current budget includes up to $80 million for assisting local governments with reorganization plans. Recommendations of the board would be binding upon any municipality that accepts funding. The board may require development of multiyear financial plans, consolidations, mergers, shared services, fewer elected officials and other measures.
