Auburn has the highest debt per capita of any city in the state.
A report released Monday by New York State Comptroller Alan Hevesi highlighted various indicators of fiscal stress, including slowing revenue, burdensome levels of debt and diminished cash reserves. And of the 61 cities listed outside of New York City, Auburn topped the list of those facing financial stress from debt.
While Oswego had more long-term debt per capita - $2,679 in Oswego compared with $2,539 in Auburn - Auburn's debt as a percentage of its total property value was the highest in the state at 11.6 percent on average from 2000 to 2004.
The debt as a percentage of property value is shown to indicate the affordability of the debt in relation to local wealth.
Debt service in Auburn accounted for 14 percent of the total expenditures on average over the five-year period, according to the report.
Over the same period, the average city had a long-term debt of $1,037 per capita, which was 3.8 percent of property value and represented 8.4 percent of total expenditures.
The report highlights Auburn's debt situation specifically, saying: “In the City of Auburn, long-term debt significantly exceeds the average in both per capita and property value terms and payment of this debt represents 14 percent of expenditures - a substantial constraint on the city's budget.”
City manager John Salomone said since he had not yet seen the report, he didn't want to comment on specifics, however, he said Auburn is far ahead of other cities in terms of maintaining infrastructure, which contributes to increased debt but is a necessary expense.
“Our infrastructure is way ahead of other cities. It's sort of like pay me now or pay me later,” Salomone said. “(Other cities) might have needs that need to be addressed down the line. So it's kind of like sweeping it under the carpet.“
The state report indicates it can be especially burdensome for cities where the debt grows faster than the tax base, comprised of property and sales tax revenue.
In regards to other financial indicators, Auburn's fiscal stress level stemming from its ability to balance the budget and maintain adequate reserves was average.
While the average city had a five-year average operating budget surplus of 0.4 percent, Auburn's average deficit was 0.3 percent of expenditures.
An operating budget surplus or deficit represents the difference between revenues and expenditures each year - some operating budget deficits are planned for to reduce growing cash reserves.
In regards to revenue-related stress indicators, Auburn also was ranked at about average - these indicators included sales-tax revenues, short-term liabilities, intergovernmental revenues and percent of tax limit exhausted.
Auburn saw a 14.5 percent increase in sales-tax revenue over the five-year period, compared with statewide 14 percent average.
Auburn has exhausted 57.5 percent of its tax limit - when a city hits 70 percent, it is considered in danger of approaching the limit.
A total of 12 cities were approaching that limit in 2005.
The report also examined fixed costs, looking at salary
and fringe benefits as a percentage of expenditures and public safety as a percentage
of expenditures - in both
categories, Auburn was below
average in terms of financial stress as a result of those
costs.
Public safety costs represented 27.5 percent of total expenditures and salary and fringe benefits were 44.7 percent of total expenditures in the city.
State averages were 31 percent and 50.6 percent, respectively.
Mayor Tim Lattimore, however, said the financial indicators show Auburn cannot afford some of the recently re-negotiated labor contracts.
“The ability of our tax base to pay more is very stressed,” Lattimore said. “I don't think we can afford giving out pay raises and expect the property taxes to pay for it.”
The ongoing economic decline of cities first became
evident in the 1950s and
was most severe during the 1970s.
With many cities already facing dismal financial situations, more are likely to fall into
severe fiscal stress in coming years, according to Hevesi's report.
Property taxes are a major source of revenue for cities.
But when cities are close to reaching their tax limits, they have a restricted ability to
raise money through the property tax.
In 2005, the report found Buffalo, Syracuse and Rochester were all nearing those tax limits.
Staff writer Anne Gleason contributed to this report
While Oswego had more long-term debt per capita - $2,679 in Oswego compared with $2,539 in Auburn - Auburn's debt as a percentage of its total property value was the highest in the state at 11.6 percent on average from 2000 to 2004.
The debt as a percentage of property value is shown to indicate the affordability of the debt in relation to local wealth.
Debt service in Auburn accounted for 14 percent of the total expenditures on average over the five-year period, according to the report.
Over the same period, the average city had a long-term debt of $1,037 per capita, which was 3.8 percent of property value and represented 8.4 percent of total expenditures.
The report highlights Auburn's debt situation specifically, saying: “In the City of Auburn, long-term debt significantly exceeds the average in both per capita and property value terms and payment of this debt represents 14 percent of expenditures - a substantial constraint on the city's budget.”
City manager John Salomone said since he had not yet seen the report, he didn't want to comment on specifics, however, he said Auburn is far ahead of other cities in terms of maintaining infrastructure, which contributes to increased debt but is a necessary expense.
“Our infrastructure is way ahead of other cities. It's sort of like pay me now or pay me later,” Salomone said. “(Other cities) might have needs that need to be addressed down the line. So it's kind of like sweeping it under the carpet.“
The state report indicates it can be especially burdensome for cities where the debt grows faster than the tax base, comprised of property and sales tax revenue.
In regards to other financial indicators, Auburn's fiscal stress level stemming from its ability to balance the budget and maintain adequate reserves was average.
While the average city had a five-year average operating budget surplus of 0.4 percent, Auburn's average deficit was 0.3 percent of expenditures.
An operating budget surplus or deficit represents the difference between revenues and expenditures each year - some operating budget deficits are planned for to reduce growing cash reserves.
In regards to revenue-related stress indicators, Auburn also was ranked at about average - these indicators included sales-tax revenues, short-term liabilities, intergovernmental revenues and percent of tax limit exhausted.
Auburn saw a 14.5 percent increase in sales-tax revenue over the five-year period, compared with statewide 14 percent average.
Auburn has exhausted 57.5 percent of its tax limit - when a city hits 70 percent, it is considered in danger of approaching the limit.
A total of 12 cities were approaching that limit in 2005.
The report also examined fixed costs, looking at salary
and fringe benefits as a percentage of expenditures and public safety as a percentage
of expenditures - in both
categories, Auburn was below
average in terms of financial stress as a result of those
costs.
Public safety costs represented 27.5 percent of total expenditures and salary and fringe benefits were 44.7 percent of total expenditures in the city.
State averages were 31 percent and 50.6 percent, respectively.
Mayor Tim Lattimore, however, said the financial indicators show Auburn cannot afford some of the recently re-negotiated labor contracts.
“The ability of our tax base to pay more is very stressed,” Lattimore said. “I don't think we can afford giving out pay raises and expect the property taxes to pay for it.”
The ongoing economic decline of cities first became
evident in the 1950s and
was most severe during the 1970s.
With many cities already facing dismal financial situations, more are likely to fall into
severe fiscal stress in coming years, according to Hevesi's report.
Property taxes are a major source of revenue for cities.
But when cities are close to reaching their tax limits, they have a restricted ability to
raise money through the property tax.
In 2005, the report found Buffalo, Syracuse and Rochester were all nearing those tax limits.
Staff writer Anne Gleason contributed to this report
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