NASSAU COUNTY CIVIC ASSOCIATION, INC. "The government is us, we are the government, you and I." Teddy Roosevelt

Is Consolidation the Answer?

"Yes" and "No"

The issue is simple, does consolidation make sense? Consolidation in of itself is not the magic bullet. Consolidation is one of several tools that can be employed to get control of government run amok. Even if all of the consolidation proposals were implemented, the bottom line number is spending. This is not confined to one particular level of government even though some are worse then others. We often hear elected officials claim that their governmental entity is well run, what does that actually mean? Their definition is more a function of meeting cash flow; revenues equal expenditures along with a reasonable reserve. The key is point is, where do revenues come from? The bulk of revenue comes from property taxes, sales tax and fees. To a small extent, local entities also receive federal and state aid. Government can be "well run" but with a more lean and efficient  model.

Nassau County has increased property taxes almost 43% over the last 8 years. The four year plan submitted to NIFA calls for annual tax increases of at least 4% based on the CPI. There is no mention of spending cuts. The home heating fuel tax pushed by Suozzi went into effect on June 1st. The list of fees has grown beyond reason. Just to use a county park will require $100 from a family of four for leisure passes ($25 each) even before paying to use the pool. A proposal to consolidate county agencies such as CASA with similar state agencies was rejected by the county executive. The consolidation of county owned buildings was a noble start, however none of the excess real estate has been sold in almost 8 years.

The three towns in Nassau have raised taxes without any spending cuts. Even if there is no proposed tax increase, taxes automatically increase based on the CPI so any notion of a "tax freeze" is dishonest. There have been no significant spending cuts or consolidation efforts by any of the three towns. The one significant step that would lead to reduced operating costs is the consolidation of sanitation districts. With each town operating its own sanitation district, duplication of operations, i.e. commissioners, administrative staff, retainer of law firms would be eliminated with minimal effect on the operation of sanitation services. This would result in improved accountability of the overall operation by employees to town management and elected officials to taxpayers, yet this reasonable reform measure has gone no where.

Schools account for 60% of the average property tax bill. One of the most powerful unions in New York is the teachers union (New York State United Teachers-NYSUT). Spending on education has grown by leaps and bounds increasing local taxes in some districts by 100% over a ten year period. The majority of the cost comes from salaries and fringe benefits. Some modest proposals to consolidate the administration of local districts have been put on the back burner. Many districts maintain excessive reserve funds that can be used to lower taxes yet they cry for more state aid. Even with yearly increases of state aid, schools continue to spend without regard to the current economic climate and the local tax burden. At some point, the state will be unable to sustain the current level of spending which will force school districts to live within their means. The Governor's elimination of the STAR rebate check in the current state budget should serve as a warning. 

New York State government increased spending by almost 10% in a deep recession and increased taxes by 8 billion, a state record. There are no spending cuts. NY has 860 public authorities. Numerous studies have called for consolidation yet there is no specific mechanism in place (relating to state operations). Governor Patterson's last budget proposed consolidating only three state agencies.

The federal government beats every other government in America for reckless spending. The current budget is running a 1.8 trillion dollar deficit. The proposed budget for fiscal year 2010 will have a 1.3 trillion dollar deficit. Budgets deficits exceeding 1 trillion dollars are projected over the next five years. The governments IOU's related to all of the bailouts is 12 trillion dollars. The proposed healthcare takeover will initially cost 1.5 trillion dollars with 600 billion in new taxes and 500 billion in cuts to Medicare. Medicaid spending will increase driving up costs to states such as New York due to the federal reimbursement formula. The cap and trade bill will lead to an initial cost of 80 billion in new fees and will severely impact states with high energy costs. As to consolidation on the federal level, the only consolidation in recent memory is the creation of the Department of Homeland Security which was more of a function of national security and not one of cost savings. 

So in conclusion, is consolidation the answer? "yes" and "no". It depends on the entity, the cost benefit analysis and political will. For example, if someone wanted to consolidate a fire district, there would have to be political support. Considering the relationship between most fire districts and their communities, the number of consolidations statewide relating to fire districts will likely be small. Can savings be achieved with a mix of spending cuts and consolidation? Absolutely. Its time to focus on the problem, spending. Consolidation is just a tool.