The number of New York municipalities in the most severe category of fiscal stress increased this year, even as the overall number of local governments designated as stressed dipped slightly, according to a report released by state Comptroller Tom DiNapoli.
A total of 22 local governments were designated in fiscal stress for their fiscal years ending in 2025, down from 23 a year earlier. But the number classified in “significant fiscal stress” rose from four to six.
Among those in the highest-stress category were the cities of Albany, Dunkirk and Little Falls, along with the town of Kent and the village of New Hempstead. The city of Poughkeepsie and the towns of Minden, North Greenbush and Ramapo were designated as moderately fiscally stressed. The cities of Elmira, Glen Cove, Johnstown and Schenectady, along with the towns of Cortlandville and La Grange, were listed as susceptible to fiscal stress.
DiNapoli said local governments are facing mounting pressure from the loss of federal pandemic aid, inflation, rising operating costs and slower growth in sales tax revenue.
“What we’re seeing more of lately are poor cash on hand, poor fund balance,” DiNapoli said. “And then, of course, when you fall into a deficit situation, have to do short-term borrowing. It all makes the challenging situation even worse.”
Launched in 2013, the comptroller’s Fiscal Stress Monitoring System (FSMS) uses indicators including year-end fund balance, operating deficits, cash on hand, short-term borrowing and fixed costs to evaluate the financial condition of local governments. DiNapoli said the system is intended to provide both an early warning for local officials and transparency for residents about their community’s fiscal health.
“This is very important for the local community to understand why some tough choices are being made,” he said. “And hopefully enable people to have greater input as to what the better choices will be to right the fiscal ship.”
The latest round of scores covers all counties and towns, as well as 44 cities and 13 villages that operate on a calendar-year basis. In this release, 15 local governments were designated in stress, including eight cities, six towns and one village. Earlier this year, DiNapoli announced that seven villages with non-calendar fiscal years were also designated in stress, bringing the statewide total to 22.
The report found that the number of cities receiving a stress designation doubled to eight in fiscal year 2025, while the number of towns and villages in stress fell from 19 to 14. For the fifth consecutive year, no counties received a fiscal stress designation.
Barbara Van Epps, executive director of the New York State Conference of Mayors, said cities and towns are being squeezed by rising costs at a time when federal relief money has dried up.
“The fact that the ARPA money, the federal money, has gone away, costs are rising, inflation is high, and the cost of services, they’re not going down,” Van Epps said. “So cities are trying to figure out a way to do this without balancing their budgets on the backs of their property taxpayers.”
Even municipalities that did not land on the stress list are dealing with financial strain, Syracuse City Auditor Alex Marion said, because higher day-to-day costs can directly reduce spending on core services.
“Every dollar we have to spend as a result of higher inflation is a dollar we can’t spend on something that is an essential service to our community members,” she said. “If we have to spend more money on gas to go in our vehicles, that’s less money we can spend on the salaries of the drivers of those vehicles.”
The report also found signs of volatility in local finances. Of the 22 municipalities designated in fiscal stress in 2025, 13 saw their scores worsen from the previous year, and nine of them had not been designated at all in 2024. At the same time, eight municipalities that were in stress the year before improved enough to come off the list.
Four municipalities — Albany, Poughkeepsie, Little Falls and the village of Coxsackie — have now been designated in fiscal stress for four consecutive years.
The comptroller’s office also noted ongoing concerns about local governments that fail to file financial reports on time. The number of municipalities that did not file in time or filed inconclusively reached a high of 264 in fiscal year 2023 before dropping to 225 in 2025. According to the report, local governments that fail to file are more likely to have poor fiscal practices, including problems with records management, billing, financial management and internal controls.
In a statement, Albany Mayor Dorcey Applyrs office said the designation underscores the financial challenges the city is trying to address.
“This metric further illustrates the reality of the fiscal outlook the administration has been laser-focused on improving, and the importance of the work the administration is doing every day to right the ship,” the mayor’s office said.