November 15, 2010: Multiple Municipal Madness

Home rule, the concept that local officials know best what local residents want and need, has a long and cherished history in New Jersey. The proliferation of local government units in New Jersey came about for many reasons-temperance, racism, road maintenance and zoning issues. It is the story of separation and exclusion, of division and greed, of preservation of prerogatives and prejudices. Alan J. Karcher in his 1998 book, New Jersey’s “Multiple Municipal Madness,” said the present political map “is a story that supports the conclusion that these lines are rarely the product of chance; rather, they were drawn by politicians with very human foibles and frailties.”

The large number of municipalities and school districts with small populations in New Jersey is thought by some to be the reason for the state’s high property taxes. And, in a quest to identify ways to curtail those taxes, home rule has come under fire. It is easy to see why. With 566 municipalities and 604 public school districts, the small state of New Jersey ranks 24th in terms of total number of units and first in the number of local government and school districts per square mile.

Last week, Senate President Stephen M. Sweeney, along with mayors from across the state, announced the beginning of a public push to encourage municipalities to share services, which he said would provide more savings for property tax owners than the 33 bills included in Governor Chris Christie’s so-called Tool Kit. In his announcement, Sen. Sweeney specifically said more municipalities should consider sharing services such as police, garbage collection, public works and animal control services.

Incentives have already been in place to do this. For a number of years, the state Department of Community Affairs provided additional special assistance to municipalities that entered into shared services agreements. However, the thinking behind the program was flawed because the state paid municipalities to share services under the presumption that they would be cheaper because of economies of scale. But if they were cheaper, that alone should have been enough justification to want to share services. Another drawback was that the amount of assistance provided was not sufficient to bring about significant change.

Only one of the 33 bills included in Christie’s Tool Kit specifically mentions consolidation. This bill, A2953, sponsored by Assemblyman Erik Peterson and Assemblywomen Alison Littell McHose and Caroline Casagrande, would make it easier for municipalities and school districts to merge their staffs by guaranteeing civil service protections to the affected employees.

Property taxes in New Jersey are state taxpayers’ greatest burden. New Jersey collects more revenue from property taxes than it does from its three largest state revenue sources (income, sales and corporate business taxes) combined. If sharing municipal services and consolidating local government units will help alleviate this burden, they should be encouraged. Municipal and school leaders must be willing to consider these options if, in fact, bigger may be cheaper and better.