While we’re on the Subject of Crickets

Posted: October 16, 2011 in Consolidation
Tags:

The latest editorial from the Recorder offered a gem of a paragraph that begs for some additional scrutiny.

The 2 percent tax cap under which Gov. Andrew Cuomo has snugly tucked New York’s municipalities — including the most flailing and failing — is an urging toward merging. Eliminating duplication and layers of government, forcing small school districts to join forces with neighboring rivals and small counties to do likewise, has long been a song and dance performed in this very space. For the most part, it’s been a solo act. With a deafening echo. And crickets.

No doubt, Gov. Cuomo has always been an advocate for consolidation. Looking for some additional background on the subject, I found this website that was created back when Cuomo was Attorney General. Reading through this site, one can clearly see where the inspiration for the narrative put forth by local consolidation proponents comes from.

Now the intent of the “Empowerment Act” that Cuomo spearheaded was to make it easier for local governments who wanted to consolidate to do so. That by itself sounds fine to me. But the Recorder, however, suggests that Cuomo’s intent with the 2 percent tax cap was to purposefully force local governments into financial crises that would somehow push them in the direction of consolidation. I think that may be a stretch. But the Recorder goes further to advocate forcing school districts and counties to consolidate. This is blatantly un-democratic and quite frankly, a disturbing sentiment that should concern anyone who values a government “of the people, by the people, and for the people.”

What further concerns me is as I read through this site is that the narrative exhibits the same ideology based arguments as put forth in the Recorder, and has a similar lack of any hard numbers or credible proof that consolidation results in lower taxes. It seems to me that if the intent behind consolidation was purely to save taxpayers money, then the most convincing arguments would include facts and figures which would show the potential savings. But none seem to exist, and I think we have to wonder why!

Instead we have a long list of quotes from dozens of politicians, both Democrats and Republicans, jumping onboard the bandwagon repeating the same thing over and over again, that inefficiencies and duplication of services within the local government are the reason our taxes are so high. There are pictures of multiple tax bills and graphs showing how NY state taxes are the highest in the nation. But as far as actual proof – examples of where there is duplication of services or examples of how a given consolidated region would save the taxpayers money – there is nothing.

There’s been plenty of online discussion about the issue of consolidation. But whenever anyone has asked for some actual numbers, we hear nothing but crickets!

The thing is, though – I am absolutely sure that cost-saving opportunities are out there. They just have to be researched by our county and local governments. Do the homework and show the math that proves the idea will save money, and chances are there will be widespread support for the idea.

How about we start with looking at areas where we already know that larger numbers gets us better prices? How about a regional fuel purchasing partnership (as suggested in Mayor Thane’s platform), that provides fuel for all the service trucks in the various localities at a cheaper rate? Or how about creating a health insurance partnership that would provide lower cost health insurance to all municipal employees in a given region?

Or what about Medicaid? How about we start looking at cooperating with other counties to lobby for Medicaid reform? Medicaid is by far the largest item in the Montgomery County budget and probably is in other counties. Even a modest 10% to 20% reduction in Medicaid costs would save us many millions of dollars.

These are ideas that may actually work. But if “crickets” is all we continue to hear when we ask consolidation proponents to qualify their ideas with actual numbers that we can hold them accountable with, then don’t be surprised if “crickets” is all you get back!

Advertisements
Comments
  1. flippinamsterdam says:

    Tim,

    As far as crickets, the best question to ask on consolidation centers on how do you explain MOSA if consolidation always achieves cost savings? By all financial measures, MOSA represents a terrible return to the tax payers in our county. This is without question yet no one seems willing to admit that the most celebrated and largest ‘shared services agreement’ crafted by our county was a dismal financial failure to county tax payers. Of course, the counterargument is that we need to “look forward” as if negative past financial returns never happened.

    The goal of the cap is without question to create financial stress under which localities and school districts must radically shed costs. However, if you look closely at the costs, they are typically related to health care and benefits of existing or retired workers and as you indicate health care for an expanding aged population. The answer here is not consolidation amongst localities– the answer lies in a radical transformation of our national health care system which delivers subpar results with the highest cost compared to other nations. So you can consolidate all you want locally but health care costs will continue to mount as the myriad of systems around health care — SCHIP,Medicaid, Medicare (in all its parts), private insurance, uninsured, et al — will remain structurally inefficient. As our recent health care debate shows however, we can’t approach health care policy debate as adults but akin to preschoolers.

    As the school district budgets show and will show, you will drive costs out by reducing services to students– period. As you shed teachers and programs, it’s hard to see how you get the same service at a lower price no matter how idealized the notion of “shared services” glosses over the point. There’s a reason different house paints vary in cost at Home Depot even in the same aisle– price only tells part of the story.

    I agree that opportunities do exist to reduce cost and waste but to your point, you should be able to make a hard numbers case to justify that rather than just believing, like MOSA advocates, that shared services in and of itself gives you the same or better services at a lower cost.

    And finally, once again, all we do is focus on cost and no one ever, ever looks at revenue. That’s kinda’ important too methinks.

    • robert purtell says:

      I have to wonder if Mosa is still a burden for the county? I beleive since the old executive director left the building, that tipping fees went down 33%, haulers are now keeping most of the trash in the mosa system and the GAT has not had a shortfall since the old executive director left. Trucking and disposal have been reduced for a significant savings. Maybe Mosa was,,, more of an indication of what can happen on any level of government when it comes to mismanagement.

      As a side note, if Mosa under the previous Director had gone through with the landfill that they sited on green road, they would be in terrific shape, with benifits to the host community, like the fulton county landfill.

      Just talkin trash!

      • flippinamsterdam says:

        Robert,

        I don’t disagree that the current MOSA seems better managed and perhaps operating more to the taxpayers’ benefit. That said, it’s without question that for far longer than not, MOSA has hardly been a net positive positive return for taxpayers. I think you indirectly make a point on consolidation in that the operations, management and governance of the entity matters as well so simply consolidating without effective oversight and governance yields negative outcomes.

        That’s my point: consolidation in and of itself is not sufficient to lower costs and like MOSA, it may actually drive costs much higher with a negative return to taxpayers.

        Just more trash talkin’…

    • Tim Becker says:

      Flippin, I’m recalling one of your previous statements – “objectives and strategy..should drive the proper size, scale and organizational structure. You don’t start with the organizational structure and then decide how to best fit the objectives and strategy within that.” – I’m curious if anyone remembers which way MOSA came to be?

      In regards to heath care – no doubt the issue is a tangled web on the national level. However I don’t agree that we have to wait for that to get sorted out before anything is done on the state or county level. Yes, costs will continue to rise due to the larger problem – but if there are things we can do in the meantime to cut costs, then we should do them. According to this data, NY state currently spends twice as much per medicaid recipient than California. California has twice as many medicaid recipients, but pays about the same as NY. There’s got to be a reason!

      • flippinamsterdam says:

        Tim,

        From a quick perusal of some studies and articles, the reasons vary from NYS providing more services to a less efficient system of delivering health care to an inadequate primary care network. So the reasons are many and I agree that being so far off the norm points to a problem.

        That said, I did not see anything that points to consolidation of localities as a way to offset Medicaid. I agree with you that we have a problem and we could likely drive costs out of the system even without a broader health care policy but in my mind, we should pursue reforms that deal with the structural issues, which in this case is national in scope, versus thinking that we can optimize with local and state policies. That may be the political reality but I don’t think it solves the core problem which continues to chew an ever bigger portion of GDP with ever rising costs and lower quality of services.

        Ironically, everyone loves consolidation unless it means getting rid of the existing maze of our current health care system. Then, consolidation equals “socialism” and we can have none of that. It would be ironic and funny until you remind yourself that people suffer and sometimes die from the systemic shortcomings in the current system.

        To Duke’s point, the Medicaid burden gets shifted to property tax payers which again points to alternate taxing approaches as one possible way to mitigate the burden on property tax payers. But then we are merely shifting costs and not solving the core problem. I think that’s better and fairer than the current system and with better cost management, we can maybe get to a more sustainable system.

        Thanks for kicking up an interesting thread.

      • Tim Becker says:

        I generally agree with you. I think it’s been mentioned by yourself and others that the same people who say “don’t touch my medicare/social security” are at the same time against a national health care system.

        Just to be clear – I was only suggesting that counties join forces to *lobby* for medicaid reform. That problem has to be solved at the state level. Where I was suggesting cooperation was in the area of providing health benefits to government employees.

  2. Duke says:

    Tim and Flippin:

    Nicely done. Thoughtful and incisive – especially the “revenue” comment. I think the real question here is whether or not the property tax system can be used to sustain local services — whether they are shared or not, whether they are efficient or not.

    The genesis of the problem is related not just to the loss of jobs in the state, but to the loss of the industrial tax base and the transference of the tax burden of local services to homeowners.

    • flippinamsterdam says:

      Duke,

      You raise the key point — whether the property tax system is sustainable or not. and the transference onto the homeowners of the tax burden. I don’t think the property tax is at all sustainable and if we are to get to a workable policy that balances service levels with cost, the underlying tax policies must change to shift the onus off the homeowner. Of course, that means it must shift to someone else assuming a revenue neutral scenario.

      What’s interesting to me in light of the above is the GASD floating the concept of a utility tax which seeks to shift the school tax burden off homeowners to a broader tax base in keeping with the 2% cap. Assuming a revenue neutral scenario again, with the utility tax, property owners will likely pay less taxes than without the utility tax. However, as much as homeowners decry tax increases, my sense is that most homeowners are opposed to the utility tax proposal. And that doesn’t leave much room to get to some alternate tax policy when the very people a tax policy helps have trouble buying in.

      I guess I don’t quite see the end game here with the 2% cap. Likely we can drive some more efficiency , but looking at the cost structures, I don’t see how that does not come with a related reduction in services. If the 2% cap is meant to drive incentives for alternate tax policies such as the utility tax example, then the 2% cap seems a roundabout way to make that happen and also subject to a myriad of local laws and policies each different from the other. Or maybe the 2% cap acts as a catalyst for bringing parties to the table and incentivizing them to craft workable policy once the cost-to-service equation becomes so lopsided from the imposition of the cap.

      In light of your points and Tim’s, I’m even more convinced that focusing solely on consolidation misses the mark.

      • robert purtell says:

        The crux of the matter is that startegic planning has to be part of the equation, if we expect to increase revenue, how will we accomplish this? sell water? nah, not unless it is on our soil, we need to increase the taxable value at a rate that is equal to or in excess of the rate of the tax burden. With that said, what do we need to do? well, the city of Amsterdam does not have a great room for development, although with good planning, believe it or not there is room for expansion, but infastructure will be costly. So how do you attract developers? and who and how do you pay for infastructure.
        Consolidation always looks attractive, but how about cooperating with a developer? and benifit in the long run when the tax base increases.

        Enough talking trash, time to get serious!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s