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Why mergers are ‘really tough’

Publisher's Notebook

March 22, 2013

Finally. New York state Gov....

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DKexpat

Mar-28-13 12:34 PM

Chuck, they were brought together "early on" - in the 1800s, school districts merged, a general water district was established out of a bunch of local ones, etc.

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DKexpat

Mar-26-13 11:55 AM

Chuck, the VA state highway fund was going broke - out of money by 2017 - because the gas tax hadn't been raised since 1986.

The (Repub) governor wanted to do away with the gas tax completely, and increase the sales tax. What resulted was a Repub-Democrate compromise that increased taxes several ways. And will also increase the sales tax in Northern VA (only) for road work.

Ironically, NYS is "ruled" by downstate legislators, but here it's just the opposite. The heavily-populated area around DC gets back a lot less than it kicks in to the state coffers...

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Chuck392

Mar-23-13 9:12 PM

DKexpat - Just for my own clarification, when you indicate that portions of your government services are "consolidated," do you mean that they have always existed in their current form, or were they originally separate entities that merged into one (the true meaning of consolidation)?

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Chuck392

Mar-23-13 5:51 PM

Forgot to add - I did see that Virginia taxes are going up. Sales tax and gasoline tax are two increases. Also see anyone driving a hybrid car will now be assessed $100 per year.

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Chuck392

Mar-23-13 5:44 PM

DKexpat - Thank you for the extra detail. My research was a bit more generalized in that I was looking at NY average teacher pay vs. VA average teacher pay. Those statistics indicated that VA teachers were compensated $20K less than NY teachers. Now if your county is experiencing a growing tax base vs. our declining tax base, that accounts for a lot as well. Any place with growing revenues will see stable/lowering taxes. I've always contended that it was businesses pulling out that caused taxes to go up, not the other way around.

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DKexpat

Mar-22-13 6:15 PM

Chuck, my VA county, for the most part, is unconsolidated. We have HOAs that cover as much as 4-5,000 acres and have tens of thousands of residents.

And for the vast majority of county residents, all services - fire, police, highway, water, sewer, schools, etc. - are consolidated county services.

My tax rate hasn't gone up in 4 years, and won't go up next year.

We spend much less per pupil than WNY schools in our consolidated district - $11,014 in 2012 and $11,595 in 2013, yet our teachers are paid what WNY teachers are and our administrators are actually higher, and our schools are nationally ranked. (88% of seniors go on to college.) Heck, until this year, we gave anyone who worked 12+ hrs/wk (like bus drivers) full benefits and a prorated pension.

So, yes, I believe consolation works, that economy of scale works, but WNY taxpayers must slash administrative posts and combine "white-collar" departments for it to work in Chau Cty.

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commentor

Mar-22-13 3:13 PM

You can consolidate all you want if you don't change your spending habits you accomplish nothing. You put bad with bad and change nothing. You just have a bigger bad. It is quite evident that they all would rather go belly up than make the necessary changes. Their philosophy is nothing is better than something. Looks like the brightest are the dumbest!!!

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Chuck392

Mar-22-13 1:08 PM

Business consolidations are no different - some make sense, some are failures. There are thousands of examples of bad business consolidations. One that comes to mind was Ames, G.C. Murphy, Hills, Zayre. End result - they are all gone now. How about Ogden Newspapers? Could they save by rolling all of their newspaper holdings here in the county into a single daily newspaper? I'll bet the editor of this newspaper doesn't like that idea and can come up with lots of reasons not to do so. And on it goes.

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Chuck392

Mar-22-13 12:59 PM

School consolidations will take place, primarily out of sheer necessity. But the savings won't come from consolidation, but rather the resultant downsizing. School systems are all about population. Declining enrollments will force the consolidations with an end result being reduced staffing and reduced number of buildings. Some commenters to this paper cite how much cheaper there school system is than ones here. After researching this claim, my conclusion is the primary factor for the savings is actually much lower teacher pay scales in other areas of the country. Combine that with a centralized administration and, yes, it's cheaper elsewhere. Will we see that here? Eventually, but likely not as dramatic, mainly due to higher teacher salaries in this state.

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Chuck392

Mar-22-13 12:51 PM

Now, I actually do believe one area of consolidation woul make sense and save money, yet no one ever talks about it - Fire Service. While I don't have any hard numbers to back it up, this area of consolidation needs serious study. I believe that a county-wide fire service makes sense, both operationally as well as financially. It needs to be looked at.

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Chuck392

Mar-22-13 12:27 PM

I'm glad that the Randolph merger was brought up. I personally spoke to the Town Supervisor there who told me that the former village residents saved absolutely nothing. Zero savings for them. The former residents outside of what was the village saved a tiny amount. If one takes the time to look at after-the-fact consolidation studies, you'll find insignificant savings at best, and some actually drove taxes up. But this isn't what a lot of people want to hear, so they simply ignore the facts. I used to be a big proponent of consolidation, until I started doing some research. They're blowing smoke up your behind, people. This has nothing to do with saving money and everything about who controls what.

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shofuh

Mar-22-13 10:13 AM

"Consolidation, however, brings an infusion of cash from the state as well as greater efficiencies."

I have a major problem with this sentiment, and really, John should be smarter than this.

This is still tax money, its just from another pot of funds. Essentially, everyone in the state is paying for these mergers and the supposed efficiency, which is a fallacy anyways. Show me a plan that will cut taxes drastically, without the use of state funds to offset the costs and I will support it. It hasnt happened yet.

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DKexpat

Mar-22-13 8:47 AM

Agree with JD. The flow of dollars from the money faucet is slowing, and new thinking is needed.

If Cuomo weren't so flippant and dismissive, he'd make consolidation easier for communities and schools.

Congress will somehow agree on reducing spending. "Look what I did! Reelect ME." And the burden will shift to the states.

The NYS Legislature will cut spending. "Look what I did! Reelect ME." And the burden will shift to counties and communities.

Who's left? Local taxpayers...

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commentor

Mar-22-13 8:47 AM

Instead of all the game playing and politicking they need to just force the mergers and get it over with. No one is smart enough to be first they will wait until they will be forced with someone they may not want to merge with. If they were smart they could have choices. Until it is forced it will not happen.

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