It's a conversation communities across the state are having. Schools, governments and organizations are looking to share services. There's a unique discussion in the Finger Lakes that's taking merger talk to a new level. YNN's Katie Husband has more.

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WATKINS GLEN, N.Y. -- Schuyler and Yates County lawmakers are getting creative in a desperate attempt to avoid breaking the bank.

"The opportunity presents itself because we are so similar and both are small enough that are feeling an exaggerated sense of fiscal distress because of our small size," said Tim O'Hearn, Schuyler County Administrator.

The downward spiral has been noticed by lawmakers. So both county administrators began to discuss changing the way they do business.

"We're clearly running on an unsustainable path and so it wasn't until the last couple of years that this realization has taken place," said Dennis Fagan, Schuyler County legislature chairman.

Each county has submitted an application for a $100,000 state grant to hire a consultant to study the feasibility of sharing services.

"Because that's what we think it's going to take, to look at what would be involved in consolidating services. And then also, if we are able to consolidate enough services, what would be involved? Would be looking at a merger?" said Sarah Purdy, Yates County Administrator.

For the 2013 budgets, in each county, they were forced to override the state mandated two percent tax cap. But if they continue to cut services to try and remain under the cap, O'Hearn argues, what will be left?

"It's going to mean a drastic reduction in non-mandated services throughout the county. This effort is in recognition of that and really an attempt to provide the same relief to our taxpayers without decimating the level of services the counties are required to provide," said O'Hearn.

County administrators said business will continue as they wait to hear back from the state.

"In the meantime, there's nothing that's going to prevent Schuyler and Yates counties from talking and so we will continue to converse and if some opportunities through attrition or turnover occur between now and then, we will certainly start working on those regardless of whether we get a grant," said Purdy.

If the grant money is approved, it could take each county until the end of the summer to find a consultant. Purdy said the study should take about a year to be completed.