One of the most enduring myths in public policy is that local government consolidations save money. The idea seems to make sense, and most of the academic studies support the proposition. However, rarely, if ever, does the promised reduction in public expenditures or taxes actually take place.
Residents will vote March 16 on a proposal that would merge the village government of Seneca Falls, New York into the more rural and adjacent town of Seneca Falls. Under state law, this can occur without the consent of the town into which the village would be merged.
Paltry Savings and the Risks: A consultant report suggests savings that can only be characterized as pitiful. Out of a combined budget of $13 million, less than $400,000 would be saved, and even that figure is by no means sure, according to the consultant.
Voters may want to consider the following specific risks that could make achievement of the expected savings and tax reductions impossible:
Proponents expect to receive $500,000 annually in funding from a state program that seeks to encourage municipal consolidations. The state program is slated for cuts. Further, with New York’s serious budget difficulties, such a superfluous program could be a prime candidate for discontinuance. Thus, one of the principal factors expected to lower taxes might not survive in the longer run.
Presently, the village has a police department, while the town does not. The new town government is not likely to be able to get away with providing a higher level of police protection in the former village than in the merged town. One of two outcomes seems likely: (1) The first is that the present police protection (and budget) would be spread throughout the merged town. This would dilute police protection in the former village area. (2) The second is that the higher level of police protection in the village would be spread throughout the merged town. This would mean larger expenditures that could easily erase the already minimal projected savings.
The consultant proposes that a new town hall be built. The costs of this building could substantially erode the projected operating cost savings.
A principal reason that municipal consolidations rarely save money is that the necessary “harmonization” of service levels and employee compensation costs inevitably migrate to the level of the more costly former jurisdiction. The police issue in Seneca Falls is a prime example of the service harmonization cost risk.
Learning from Toronto: Seneca Falls does not have to look far to see how local government consolidation can lead to more spending and higher taxes. Less than 150 miles away as the crow flies, Toronto residents were glowingly told of the lower taxes and expenditures that would result from consolidating six jurisdictions into a “megacity” in the late 1990s. As we and others predicted at the time, things have not worked out. Toronto’s spending has risen strongly under the consolidated government. Despite its much smaller population, the risks are similar in Seneca Falls.
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doesn't work because spending isn't cut
My guess to why this doesn't work is because spending isn't actually cut. The highest level of spending or services in one part of the combined community, is what results in the larger overall combined city. So that ends up eating any savings that could have been.
Until elected government types learn that spending isn't going to solve anything this will result. I can see why it happens because politically nobody wants to cut services over saving money. So many people think now-a-day's that only the government can provide some things. An very bad idea that needs to end.
Maybe it would have a better chance of working if the lowest level of spending and services of the area be the choice made. However that would be hard to do in so many places until the attitude to government spending and overspending is changed.
Once again the problem is largely the result of spending. Until less spending happens government will go broke over and over.