| Chapter 2: | Government Consolidation |
with consolidation issues, if the governments’ spending is higher or their quality of services is lower relative to that of other local governments in the state, if there is a crisis climate generating calls for change, or if there are more general-purpose local government units (more fragmentation) in the county. These characteristics determine the benefits relative to the costs of merging.
Consolidation = f (S, H, A, L, C, D | Referendum is held)
where S = Size of city relative to county
H = Homogeneity of city and county
A = Number of consolidation attempts
L = Local expenditures relative to those of other local governments in state
C = Crisis climate
D = Local government decentralization (fragmentation) in county
The referendum is more likely to pass if the city constitutes a large portion of the county. There are three reasons that this may occur. First, the existing boundaries of cities and counties are largely historically and culturally determined. Citizens who live in areas that surround a city may strongly identify with the city and want to officially belong to the city. Second, the activities of any unit of government generate spillover effects for the adjacent or coterminous units of government. Oates (1999) pointed out that the presence and size of spillover effects from local public policies depend on the geographic size of the local jurisdiction. He suggested that one way to deal with these spillovers is to increase the size of the jurisdiction in order to internalize the benefits and costs. There is a tradeoff, however, in that increasing the size of the jurisdiction may lead to welfare losses because the ability of citizens to “vote with their feet” will be limited. City and county residents may support consolidation if they perceive that consolidation will allow the larger government to better capture spillover benefits. Regional governments, such as city-county consolidated governments, may be better able to address interjurisdictional spillovers through