Cuomo to strapped NY cities, schools: Merge

ALBANY, N.Y. (AP) -- The New York state budget currently under negotiation may be remembered years from now as the beginning of the end for many small towns, cities and school districts.

Gov. Andrew Cuomo had tough words Friday for local officials facing fiscal crises and seeking more help from Albany, telling them they should consolidate services or whole governments and school districts rather than looking for relief from Albany.

"If it was really, really tough, you'd see that happen," Cuomo said in his strongest comments yet on the 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."

Cuomo said he believes local politics is standing in the way of mergers and consolidations that would save taxpayers money and improve efficiency of services. He said deciding to consolidate should be easy, yet "politically, it's difficult ... I get the politics."

Despite years of hard times, Cuomo said you can count "on one hand" the number of consolidations among 50,000 local governments, school districts, fire and library taxing districts and more.

School districts and local governments say they are already consolidating and merging, but that's not enough. They are asking for more laws than Cuomo has offered in his state budget proposal to cut labor costs, pension costs and more funding.

"Talk of consolidation is just an avoidance action by the state so they can avoid the real problem of state mandates," said Peter Baynes of the New York Conference of Mayors. "If you talk to any local government in New York state, they can rattle off the consolidations they've made and they are squeezing all the savings they can out of shared services."

Baynes said voters only agreed to dissolve three villages out of 20 that held votes within the last five years. But in most cases, the savings — if any — were seen as too low and the diminished services and cost of a lost hometown identity too high, he said.

Local governments and school districts blame programs and costs required by Albany, often won by politically powerful public worker unions, for many of them facing insolvency.

Cuomo has offered a way to cut current pension costs now by borrowing against projected future savings, but a growing number of local leaders consider that risky and unwise. Another would require arbitrators in labor disputes to consider local taxpayers' ability to pay for a labor resolution, but that faces opposition in the Legislature.

Despite layoffs and service cuts, these municipalities and school districts say they face insolvency within five years.

"We know of 20 school districts that are currently considering mergers and are in various stages," said David Albert of the New York State School Boards Association. But he said most in the past have ended as one did this week near Glens Falls, losing by a 4:1 margin in a vote of the residents.

"The communities don't want economics to drive every educational decision. They want a quality education for their children," Albert said. "So we find a lot of mergers fail."

However, he said hundreds of schools and districts now share sports teams to cut costs. Others share academic program costs, business officers or even share a superintendent, often the highest paid school employee.

Meanwhile, Cuomo and legislative leaders continue closed-door negotiations with the goal of agreeing to a $143 billion budget by Monday so it can be voted into law by March 21, well before the April 1 deadline.

Assembly Speaker Sheldon Silver has made raising the minimum wage to $9 an hour a major goal of his Democratic conference and has support from the Democratic governor and the Independent Democratic Conference in the Senate. Senate Republicans continue to seek up to $2 billion in tax cuts for small businesses and the middle class.

Also in the mix is a second extension of the so-called temporary millionaire's tax which raises $1.9 billion a year is also being discussed in a budget that was billed to have no tax increases, according to two state officials familiar with the talks. They spoke to The Associated Press on the condition of anonymity because they weren't authorized to discuss issues in closed-door negotiations.

The income tax increase is currently due to expire in 2014. Approval now would avoid taking up the dicey issue in an election year for Cuomo and lawmakers.