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November 30th, 2009

Government Could Save By Sharing Services

New York State Comptroller Thomas DiNapoli

ALBANY - Municipalities across New York could save $765 million dollars in taxpayer dollars through shared services according to a report released by State Comptroller Thomas P. DiNapoli. DiNapoli, who has championed savings through shared services, released the report at a press conference in Westchester County today. DiNapoli was joined by State Assemblywoman Sandra Galef and Secretary of State Lorraine Cortés-Vázquez.

“Tax dollars are tight and families are struggling,” said DiNapoli. “Now more than ever we need to find ways to cut costs and lower property taxes. A good number of local governments are already saving millions in tax dollars by pooling their resources and eliminating duplication. But there are 3,175 local governments in New York State. All of these counties, cities, towns, villages, school districts and fire districts should use this report as a roadmap to save tax dollars without hurting the quality of services they deliver.”

DiNapoli said consolidating central business office functions hold the most promise because consolidating those functions is often easier to achieve than other consolidations. DiNapoli’s report found that up to $580 million in savings could be realized by pooling central office functions alone.

Assemblywoman Galef said: “I have been focusing on sharing services and consolidation in government and schools. Specifically, I formed the Shared Services Task Force of the 90th Assembly District to look deeply at some of the local issues involved so that taxpayers could understand the process for making changes. The Task Force has asked for just this type of information which the Comptroller’s report provides. I also appreciate the support of the Secretary of State and her department for overseeing the process of securing grants to study sharing. The success stories highlighted in the report will help inspire local taxpayers and act as a hands-on guide for local officials so they can continue to work on streamlining government operations.”

New York Secretary of State Lorraine Cortés-Vázquez said: “I very much appreciate Comptroller DiNapoli’s partnership on this critically important issue. Under Governor Paterson’s leadership, through the Department of State’s Local Government Efficiency (LGE) grant program, local governments have projected a savings of $350 million dollars from a $40 million state investment in over 240 shared service projects. The LGE program has been one of the most successful programs in helping to improve local services while controlling property taxes. Now, more than ever, we must work together and support one another as we build a better, stronger future for New York.”

Counties, cities, towns and villages spent nearly $4.3 billion on general government administrative office services in 2008. Most studies have identified savings of between two and five percent from shared services efforts in these areas. If such efficiencies were achieved statewide, this would translate into roughly $85 million to $215 million in potential savings. For school districts the potential savings is much larger. School districts outside of New York City spent approximately $7.3 billion on these types of administrative activities. Using that same savings factor of two to five percent, districts could achieve another $145 million to $365 million in savings, bringing a total dollar savings to between $230 and $580 million.

Among the report’s highlights:

Up to $580 million could be saved if counties, cities, towns, villages and school districts shared "back office" administrative functions;
Up to $185 million could be saved if counties, cities, towns and villages increased their cooperative efforts in areas such as recreation, water, sewer and sanitation services;
More potential savings may exist in programmatic areas such as public safety, capital construction, property assessment and health insurance;
In 2008, 181 joint activities were reported around the state. Projects span a variety of areas including youth programs, water and sewer, refuse and garbage, planning and zoning, library, and transportation. By far, the most popular type of joint activity involved youth activities – more than 33 percent;
Revenue that local governments have generated in providing a service to another municipality has increased by nearly 31 percent. In 2002 they collected $674 million, and by 2007 that figure jumped to $881 million;
Five municipalities have initiated three separate police service consolidations (traditionally a difficult service to consolidate), with expectations of tens of millions in tax dollar savings, and another eight have received state grants to do a feasibility study;
In addition to youth programs and public safety, municipalities are consolidating – or studying the possibility – in such areas as facilities, public works, justice courts, and health care; and
Savings often come when towns and villages merge their services or when counties assume services formerly provided by towns, villages and cities.