The Great Recession took a serious toll on New Rochelle’s finances – just as it impacted communities all around America. Lean budgets, tough choices, and good financial management helped get us through the worst of the economic downtown with core services intact, but the financial strain shaped almost every major decision.
Now, as the national economy continues to pick up strength, New Rochelle’s municipal finances are also improving. The latest financial report from the City’s independent auditors is, without a doubt, the most positive we have received since the recession began in 2008. Here are some highlights:
• The fund balance (essentially the savings and rainy day account) within the City’s general fund topped $6 million by the end of 2013, more than doubling during the course of the year. For the first time in a long while, the fund balance exceeds 5% of our overall operating budget, the target recommended by most auditors.
• Sales tax receipts in 2013 exceeded estimates by about $1.3 million.
* Mortgage tax receipts (which largely follow the housing market) exceeded estimates by about $1 million.
• The City’s ratio of debt service to non-capital expenditures continued a decade-long downward trend, and today stands at 5.9%, compared to 8.2% back in 2004.
Now, before we start jumping for joy, let’s put all this in perspective. It’s not like New Rochelle has won the lottery or is suddenly flush with cash. It’s more like we’ve finally landed a modest-paying job after a long period of unemployment. Services are still exceptionally lean, capital investments are still far short of need, taxes are still too high for many homeowners, and long-term trends still pose challenges. That means we must continue prioritizing both fiscal responsibility and economic growth.
But it is good to emerge from a period of crisis, and we all hope that the national and regional economies will continue to improve.