New Report Lays Out Path to Empowering Financial Control Board

NEW YORK, NY – Governor Cuomo should seek to reactivate and re-empower the state Financial Control Board to oversee New York City’s finances in response to Mayor Bill de Blasio’s repeated calls for deficit borrowing, according to a new report issued today by E.J. McMahon, adjunct fellow at the Manhattan Institute (MI).

With the city facing its most pressing economic and fiscal challenges since the 1970s, McMahon writes, the Cuomo-chaired control board can provide external pressure on the mayor and city council to “achieve urgently needed labor savings and to enforce hard limits on spending during a difficult post-pandemic recovery period.”

Weaving together a history the of the city’s past fiscal crises, an analysis of the control board’s history and current status, and a clarion call for a slate of reforms, McMahon’s report explains what a reinstatement of control board oversight over city finances would entail and shows how it would help solve some of the city’s most intractable problems. The time is right, he argues, for Governor Cuomo to seek legislative approval for such a reinstatement.

McMahon’s report discusses these and other subjects, including:

• The provisions of the 1975 Financial Emergency Act that created the control board, and subsequent modifications to it;
• Mayor de Blasio’s request for permission to close deficits with borrowed money, which opens the door to a new period of state control;
• Past governors’ flirtation with the idea of restoring the control board’s oversight powers, and how the current crisis differs from what they faced.

As McMahon notes, Governor Cuomo has taken a newfound interest in the control board. It is due to meet again to review city finances after the current fiscal quarter end on Sept. 30, and may prove to be an important element of the city’s recovery.

Click here to read the full report.