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Ex-Village People

However Americans feel about the federal government, they are generally happy with their local governments.  Last month, a CNN poll quantified this disparity: 26 percent of people trust the feds all or most of the time, about a third feel that way about their states, and 52 percent trust their localities.

But those warm feelings have a downside: throughout the Northeast and Midwest, there is a profusion of overlapping, duplicative, general and special purpose governments that impose a staggering array of costs. Ohio has 3,800 local government jurisdictions, including 250 cities, 695 villages, and 1,308 townships. New York has so many local governments it can’t keep track of them all, but estimates that there are 10,521. 

While the proliferation of local governments, and the fragmentation of the state into tiny “little box” jurisdictions may satisfy residents’ desire for accessible, responsive, small governments, it also creates a staggering array of costs. The most obvious is that the many separate jurisdictions in a given region often duplicate infrastructure, staffing, and municipal services. Small municipalities miss out on quantity discounts from joint purchasing arrangements.  These diseconomies are further sharpened by the fact that small jurisdictions tend to have correspondingly small tax bases to fund their variety of services. 

As a percentage of per capita income, for example, Ohioans have the ninth highest local tax burden in the U.S., compared to the 34th highest for state taxes. New Yorkers, not surprisingly, have the highest local property tax pinch in the nation.

But there are other, subtler costs to the proliferation of little governments. They are often simply too fractured to develop a unified vision for economic development, and mobilize regional stakeholders to realize it. Such divisions will always complicate efforts to carry out cross boundary visioning, plan cooperatively or coordinate decision making across large areas. Research shows that metropolitan fragmentation exerts a negative impact on competitiveness and weakens long-term regional economic performance.

The upside of the impending local fiscal crisis is that it may encourage voters to take a second look at how much their beloved local governments are costing them. The effects of the recession on local budgets, as Mark Muro has pointed out, is going to be brutal. Note the use of the future tense – the crisis hasn’t yet reached its nadir, which the National League of Cities predicts will be sometime in 2011.   This means service cuts, furloughs, and layoffs are in the future for most municipalities if they continue on their present course.

One option is to share services to save money: Consolidating just one town and county police force in New York, for example, could save $1.7 million a year – or a 20% reduction in costs for the town, without sacrificing services. The Westshore Regional Fire District in Cuyahoga County, Ohio, could save taxpayers $1.3 million a year. 

A bolder step is to dissolve some of the smallest municipalities altogether. A proposal to eliminate Indiana’s 1008 townships altogether has struggled to gain traction in the state legislature and is dead for this year. But incremental changes are still possible elsewhere. A new law in New York allows voters to use a petition drive to start the process of consolidation or dissolution, bypassing local officials who aren’t generally interested in seeing their municipality, and their jobs, disappear. And on March 16th, voters in three small communities in New York, the Village of Seneca Falls, Village of Port Henry, and the Village of Perrysburg (population 380), will vote on whether to merge with larger towns or counties. 

At least once before, little Seneca Falls sparked a massive shift in American life. Maybe this consolidation vote could generate another one.