Economic storm clouds are getting bigger on the horizon, and top agency leaders in New York state government are already being asked to tighten their belts.

But despite the fragile and volatile financial picture, local governments in New York are flush with money. The brighter financial picture is due, in part, to the federal pandemic aid sent to communities around the country, as well as rapidly growing sales tax revenue.

State Comptroller Tom DiNapoli's office on Tuesday released its annual report assessing the fiscal "stress" of local governments, finding only 20 of them are facing severe financial concerns. It's a decline from 30 local governments facing troubling stress scores a year ago.

Still, the good times are unlikely to last, DiNapoli warned. That additional sales tax money, after all, is in part due to spiking inflation.

“The infusion of aid from the federal government and robust local sales tax revenues helped to put local governments on solid fiscal ground in 2021,” DiNapoli said. “Still, municipalities shouldn’t assume this will last. Inflation remains a major concern and sales tax growth is slowing in many areas. With the end of extraordinary federal aid, and a possible recession looming, local governments need to plan carefully to avoid fiscal cliffs in the future.”

The health of local governments matters for taxpayers, especially those who pay the highest property taxes in the country in New York. The worse fiscal shape a community is in, the likelihood of taxes and services being affected as a result increase.

The report from DiNapoli's office uses a variety of factors to assess financial health, including its cash on hand, borrowing, fixed costs and whether it has a pattern for operating deficits. Population, poverty and employment trends are also analyzed and factored into the score.

Only the city of Poughkeepsie is facing "significant" signs of fiscal stress in the last two years, the report found.