Buffalo’s precarious fiscal condition of a decade ago has stabilized, due to state-imposed oversight, increased state aid and the steady stewardship of city leaders. But poverty, population loss and low home values pose continuing challenges.
That was the verdict of State Comptroller Thomas P. DiNapoli, who came to Buffalo on Monday to share his office’s assessment of the city’s financial health with Mayor Byron W. Brown, whom DiNapoli credited with assisting in the positive trend.
“Buffalo has gone through some very tough times, but is certainly in a better budgetary fiscal condition than it has been for a long period of time,” DiNapoli said at a meeting Monday with The Buffalo News Editorial Board.
The comptroller’s profile of Buffalo was released as part of a Fiscal Distress Initiative launched by his office that monitors trends affecting the fiscal stability of localities across the state.
The Buffalo school district – facing a $35 million budget gap this year, and which gets part of its funding from the city – was not part of the report released Monday.
Brown was buoyed by the comptroller’s report on city finances.
“Since becoming mayor, my focus has been on improving the fiscal outlook of Buffalo; fostering an even more vibrant business environment that will accelerate business investment and job creation; and running a more efficient government,” Brown said in a news release following his meeting with DiNapoli.
In addition to decisions made by city leaders, DiNapoli said Buffalo has benefited significantly from the oversight of the Fiscal Stability Authority – also known as the Buffalo control board – which virtually took control of the city’s finances from 2003 to 2012, when it reverted to “soft” status and returned more control to city officials.
“We’ve had control boards in other parts of the state, though some might argue about how successful they have been. In the case of Buffalo, when you look at the history, actually, it was successful,” DiNapoli said.
According to the profile, Buffalo has had three consecutive balanced budgets that helped it gain access to credit markets, and the city currently has a surplus of $30.5 million.
“So, in terms of where they’ve been, they’re in much better condition, certainly trending in the right direction,” DiNapoli said.
Though it is a healthy fund balance, according to DiNapoli, it also is down significantly from the city’s peak surplus of $113.5 million in 2008 which, at the time, represented about a third of the city’s general fund expenditures. The city also has a “rainy day fund” of $35.7 million to cover unexpected expenses or revenue losses.
But despite the positive trends, DiNapoli expressed concern about long-standing systemic issues still facing the city, including continued population decline, a 44 percent child poverty rate and relatively low housing values.
“We do indicate some areas of concern that really relate to – for lack of a better label – demographic concerns and, certainly, in terms of the relative value of homes, as one indication of the wealth of the community. Buffalo is at the lower end in comparison to other communities,” DiNapoli said.
The report noted, for instance, that property values in Buffalo grew at less than half the rate of other cities in the state between 2002 and 2013.
Later this week the state Comptroller’s Office will release a ranking of school districts to determine which ones are under stress. But it will not include Buffalo or the other Big 5 districts.
“As we’re starting the new year, we’re going to continue to build on the work that we’ve done in the area of fiscal stresses. We’re putting out now our list on school districts. For the first time, we’re going to be identifying school districts that are in distress, and there are going to be a significant number,” DiNapoli said.
“We’re making sure that we do not have any locality, municipality or school district contemplating bankruptcy, as we’ve seen happen in other states, certainly Detroit being the most glaring example,” he added.