The Legislative Auditor warns 18 towns, cities, and villages on this year’s list of Fiscally Distressed Municipalities are on the edge of budgetary disaster.
Director of Local Government Services Brad Cryer says unless these 18 locations change course, they could be headed for bankruptcy and state-run Fiscal Administration of their finances. This is a warning.
“In many occasions, the residents, even the council members, don’t always know how bad or good their town is doing financially until it is too late, so what we are trying to do it outreach,” says Cryer.
Three of the locations mentioned already have a negative budgetary balance, four of them have Rural Water Infrastructure Concerns, and the rest are being monitored closely.
Cryer says bad fiscal management isn’t always the biggest culprit in these situations.
“That comes from declining populations where your tax base drops, you may have lost a large employer, and you have utility systems where elected officials just have not been charging enough in rates to preserve those systems,” says Cryer.
It’s not just small villages that have been named. Grambling, Tallulah, Jonesboro, Winnsboro, Baldwin, Clinton, Ball, and others made the list. Cryer says difficult decisions in those places will have to be made.
“It really comes down to a matter if the town council, will the Mayor agree to a course of action that will get them back on track? A lot of times those are painful choices, you have to either cut services or raise rates,” says Cryer.
