| Chapter 1: | Introduction |
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states, property tax restructuring and the resulting caps on property taxes have brought about an environment in which local governments are faced with lower revenues for the foreseeable future. Recommendations to reduce local government spending include local government consolidation schemes––such as consolidating emergency public safety dispatch within counties or even multicounty regions, merging current township and municipality duties under the county level, reorganizing school districts to achieve a minimum student population in the administrative unit, restructuring library districts so that all citizens have access to a public library, combining municipal health departments with county health departments, joining city and county public safety services, and encouraging the voluntary coordination and consolidation of governmental units and services.
This book addresses two issues related to the structure of local government: the determinants of consolidation and the potential impact of consolidation on local government spending. This is a narrow undertaking and leaves important elements of local government reform for future analysis. Our primary focuses are examining the factors that influence city-county consolidation, considering the impact of city-county consolidation on local government spending, and estimating the potential savings that could result from the scale economies and efficiency gains from consolidating local government units. We consider other regions of the United States, but our analysis focuses primarily on the Midwest, where population declines and changes in the employment base and state policies (such as property tax caps in Indiana) have had dramatic effects on the fiscal viability of local governments. The current economic climate, along with policy changes related to property tax restructuring in many states, has led to substantial reductions in local governments’ budgets. As a result, many local governments are in crisis and are considering some level of consolidation.
Determinants and Effects
of City-County Consolidation
In chapter 2, we use statistical methods and data on consolidation referendum attempts in the United States since 1970 to test whether