Experts: Shared services don't always lead to cost savings

Taxpayers hoping to save money through new state efforts aimed at streamlining school districts and other local governments could well face disappointment, experts say, especially in light of recent findings that fully half such efforts fail to cut costs.

Representatives of counties, municipalities and other local governments warned a regional conference in Melville Thursday of potential pitfalls awaiting Gov. Andrew M. Cuomo as he tries to curb property taxes through government consolidations and shared operations.

Speakers cited a recent Cornell University survey of officials in 946 localities across the state who reported high failure rates in attempts to cut costs through agency mergers and other efficiencies.


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"You have to remember that you won't save money 50 percent of the time," said Mildred Warner, a professor and researcher at Cornell's Department of City and Regional Planning.

The summit meeting, organized by the New York State Conference of Mayors, New York State School Boards Association and other government groups, was in response to a sweeping "tax freeze" initiative that Cuomo pushed through the legislature in April. The governor has called high property taxes "the number one burden on New York's families and businesses."

The election-year initiative promised tax rebate checks for homeowners, but only those living in school districts and municipalities that keep within state-imposed caps on property tax hikes. Starting in 2015, the new law also presses local governments to develop plans for cutting costs through streamlined operations.

On Long Island, 122 of 124 school districts committed to remain within caps for the 2014-15 academic year.

Some other local governments -- villages, especially -- have declared that keeping within cap limits would make it virtually impossible to pay costs of employee benefits while also paving streets or providing other essential services.

"We pierced the cap two years in a row, and haven't had a single complaint about it," said Paul Pontieri, the mayor of Patchogue Village, who joined Thursday in the conference's panel discussion.

Under the new law, local governments wishing to maintain residents' eligibility for state tax rebates must get approval of their "efficiency plans" from the governor's budget office. Those plans must map out cost savings equivalent to 1 percent of total property tax collections, known as levies, for each of three years beginning in 2016-17.

Experts described the initiative as Albany's biggest campaign so far to streamline local governments through mergers, shared services, cooperation agreements and other measures. On the Island alone, the program could affect more than 900 government units, including two counties, two cities, 13 towns, 97 incorporated villages and the 124 school districts.

"We were just floored by it," said Fred Langstaff of Sayville, a board member and district clerk at Eastern Suffolk BOCES, which provides occupational training and other programs for students from local districts.

Shared services, ranging from school bus transportation to coverage of 911 emergency calls, are nothing new for local governments across the state.

Cornell's survey, conducted in the winter of 2013, found that such services accounted for an average 27 percent of government operations covered in a questionnaire. The study also determined that some of those joint operations between municipal agencies had continued more than 30 years.

Survey organizers, however, noted that local property taxes in New York State continue to rank among the nation's highest, suggesting that shared services do not necessarily curb costs.

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