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Editorial: State stress tests would help local governments

State Comptroller Thomas DiNapoli speaks at the monthly

State Comptroller Thomas DiNapoli speaks at the monthly Garden City Chamber of Commerce luncheon and reception. Photo Credit: Howard Schnapp, 2011

At first glance, the most notable thing about the announcement of state Comptroller Thomas DiNapoli's proposed economic stress tests for 4,000 New York municipal governments is the categories they'd be placed in: "significant fiscal stress," "moderate fiscal stress" or "nearing fiscal stress."

Is nobody doing well?

That's not what the comptroller's office meant, although DiNapoli, laughing, said he sees how you could think so. In fact, governments that test out fine wouldn't be listed at all.

But it says something about the challenges governments here face that the idea every one of them would be facing trouble is plausible.

On Long Island, both counties, most towns and the majority of school districts are in financial trouble or headed for it. Thanks to loose spending, skyrocketing pension and health care costs and this year's new property tax cap, the trouble is likely to get worse.

DiNapoli wants to assess these thousands of entities based on fiscal data like fund balances, debt and cash flow. He would look at where they're headed and where they are now. He also wants to analyze them based on demographic data like population trends and tax assessment growth. It makes sense.

Many towns, school districts and villages know exactly where they stand and where they're headed. Others, though, likely don't, because they're being overly optimistic or failing to see the trends. And in some places, elected officials know how bad things are and may get, but the taxpayers don't. Politics too often plays a part in how leaders express these plights to voters.

DiNapoli's office would compile its ratings based on information it already gets, and roll them out throughout the year, timing them by the fiscal calendars of the government entities.

The comptroller's proposal is in a 60-day public comment period, but after that the tests should move forward. Information is power, and this plan is all positive. For many of these governments, the only negatives would be the ratings they receive.