State & Local Government Policy, Business and Technology

States Increase Tabs They Keep on Municipalities' Fiscal Health

Governing: When New York state released the latest scores for its fiscal stress monitoring system this fall, a few local governments received a bit of unwanted news. Two cities (including Albany), four counties and two small towns were deemed to be under “significant fiscal stress” -- the system’s most severe designation.

Those localities are hardly the only places to find a spotlight being trained on their fiscal woes. A growing number of states are either establishing new systems or strengthening existing initiatives aimed at monitoring the fiscal health of their localities. In all, a recent Pew Charitable Trusts study found that 22 states regularly review local government finances to detect fiscal distress or assess fiscal conditions.

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