The New York State Office of the State Comptroller (“OSC”) developed the Fiscal Stress Test (“Test”). According to OSC, “fiscal stress” is the “inability of an entity to generate enough revenues within the current fiscal period to meet its expenditures.” The Test assesses municipalities and assigns them points as to the following: year-end fund balance, operating deficits, cash position, use of short-term debt, and fixed costs (such as personal services and employee benefits). Monitoring these indicators can help guide policy makers as we move forward in addressing fund balance levels that are above internal policy limits.
