Cupid's Arrow: Consolidating Governments to Save Taxpayer Money

This Valentine’s Day, let’s train Cupid’s Arrow at local governments in New York and Massachusetts—a surefire way to streamline services and save taxpayer money.

New York State has over 10,000 local governments—cities, towns, villages, counties, special water districts, sewer districts, fire districts, etc. These overlapping jurisdictions impose significant and unnecessary administrative and operating costs on the public, leading the Empire State to have the highest property taxes in the nation.

Governor Andrew Cuomo has taken concrete steps to nudge municipalities to consolidate services—or, perhaps more directly, to provide an incentive for citizens to push for consolidation forcefully at the ballot box.

The Governor announced his latest consolidation initiative in his State of the State address last month. The plan creates a two-year freeze on property taxes for upstate municipalities that have agreed to abide by a 2 percent property tax cap. In year one, homeowners earning under $500,000 would receive a 2 percent tax rebate simply for living in a community that respected the tax cap. In the second year, homeowners would only qualify for the credit if their municipality submits a plan to consolidate or share services with their neighbors that saves 1 percent of the levy a year for three years.

While the push for consolidation has been opposed by unions representing municipal workers—who understandably fear the loss of jobs that comes with greater efficiency—the long term effects on the economy of upstate New York should be positive. Instead of having individuals duplicate efforts town by town, those people will gravitate toward more productive employment. Phasing in consolidation via attrition may be one way to achieve a compromise with unions, while securing long-term savings.

In addition to nudging local governments toward consolidation, the State should take steps to eliminate red tape that prevents counties from exploring joint procurement of health insurance and other goods/services. As Stephen Acquario, the executive director of the New York State Association of Counties, told City and State, “There is no reason why a county should not be authorized to reach out to towns, villages, cities, school districts and centralize procurement of health insurance for all of the local governments within its jurisdiction.”

New York is perhaps the most egregious example of the proliferation of government. However, Bay State is not immune from this waste. While Massachusetts eliminated most county government between 1997-2000 (sheriffs and county courts remain vestiges of the old guard), additional progress can and should be made.

To that end, Governor Deval Patrick launched the Community Innovation Challenge (CIC) grant program in 2012, designed to encourage sharing of services. In two years, the program has invested $6.25 million in 49 projects in 197 municipalities across the Commonwealth.

Last week, Hamilton and Wenham—long partners in running the Hamilton-Wenham Regional School District—received a CIC grant of $90,000 to continue their efforts in forming the State’s first-ever combined Public Facilities and Infrastructure Department. This continues a trend of shared service delivery by the two towns, which included the opening of Massachusetts’ first joint library in 2001.

All too often, conservatives lead this type of streamlining. But the truth is that efficient government is even more important for liberals, who believe that government should play a central role in ensuring opportunity for all, investing in public infrastructure, and enacting policy to protect the environment and strengthen the middle class. After all, if we want the public to place its trust in government's ability to invest their hard-earned money, we must do everything we can to make every dollar count.