Why mergers are ‘really tough’
Finally. New York state Gov. Andrew Cuomo, in the midst of budget negotiations last week, came out of his shell and said what needed to be said to the oftentimes whining municipalities and school districts in regard to lesser funding and the tax cap: rethink how you do business.
“If it was really, really tough, you’d see (consolidation) happen,” Cuomo said March 15 in an Associated Press report on local fiscal crises. “If you are a school district, or a city, or a town or a county, and you are looking for a fundamental financial reform, consolidation is one of the obvious ones.”
During a visit to Dunkirk last month by Sam Hoyt, regional director of the Empire State Development Corp., he promised that regionalism and government consolidations were still on the Cuomo agenda even though the governor had not been stressing the initiative. Last week it seemed the message from Albany was back.
As usual, it had its detractors. Chief among them was Peter Baynes of the New York Conference of Mayors. He said the governor needs to put his focus on mandate relief.
Don’t believe that hype. Mandate relief is not what is causing problems for the tiny villages of Cassadaga, Sherman, Forestville and Silver Creek. Mismanagement by these entities is usually the largest problem, one that Baynes would rather not discuss since the villages are members of his organization.
Baynes then pointed to a lack of success in recent years in dissolving villages statewide. Unfortunately, a large dose of the failure falls at the feet of the elected leaders.
Locally, in the villages of East Randolph, Randolph and Perrysburg – all of which were successfully dissolved by voter approval – the elected leaders were positive about their respective towns taking over duties of their inconsequential municipality.
Where the dissolution failed – Lakewood – the elected leaders were selfishly involved in efforts to scare voters that if the village dissolved, residents would face uncertainties in the future while seeing lesser services.
Those fear tactics, espoused by elected officials who do not want to lose their small piece of power, work well. But what those elected officials won’t remind constituents is that they already see lesser services in whatever municipality they live because the budgets are at breaking points.
In Dunkirk, potholes are going unfilled. In Fredonia, the water plant is nearing a disaster. In Forestville, the school has limited extracurricular activities.
Consolidation, however, brings an infusion of cash from the state as well as greater efficiencies.
We already know it works in the private sector. Consider these mergers, which made two companies stronger as one: American and USAirways in the airlines; Heinz teaming with Berkshire Hathaway and Warren Buffett; Pixar and Disney and Exxon and Mobil.
Do all business mergers work? No, but they stop the bleeding and offer some time for companies to come up with new solutions and revenue streams.
New York state and its tremendous number of governments and schools, however, are running out of revenue streams in its fees and taxes. Residents and businesses are relocating.
Does keeping our 19th-century form of government and school districts alive fix the problem? For the last decade, the answer has been quite clear.
Even though far too many of our elected leaders do not want to believe it, including those in Lakewood, Cuomo has it right.
So next time you hear a government or school official talk about a “tight” or “bare bones budget,” know they are being honest about it. Just also know they are not being honest about finding a solution, which currently exists in consolidation.
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