by Chris Jones, Vice President for Reseach, RPA
Ever since Robert Wood put a number to the problem in his 1961 classic, 1400 Governments: The Political Economy of the New York Metropolitan Region, regionalists have argued with little success that balkanized, overlapping units of government result in the inefficient use of scarce resources, from land to tax revenues and political energy.
Despite the theoretical appeal of such arguments, they were simply never a match for citizens' attachment to locally controlled schools, fire houses, police departments and parks, or to the fierce resistance from local officials. In fact, in 1996 RPA estimated that the number of governments in the region had grown to over 2000, partly because the region had expanded, but also because municipal divisions, special districts and public authorities had added new layers to the mix.
The issue is getting a new hearing, however, driven by the rumblings of property tax revolt in New York, New Jersey and Connecticut. With no easy answers for reducing some of the highest property taxes in the nation, political leaders in states, counties and localities are looking for creative ways to share services. Even taboo topics like fire or school district consolidation are getting some serious attention across the region.
In New Jersey, Governor Corzine and a number of legislative leaders are pushing for stronger incentives for shared services and consolidation as part of the package for property tax reform. On Long Island, both County Executives Tom Suozzi in Nassau and Steve Levy in Suffolk have launched efforts to identify savings from the consolidation of taxing districts and other local efficiencies. This in turn has triggered a vigorous debate for how much savings you can actually extract from economies of scale without sacrificing service quality.
To help resolve this question, two studies released this week by the Long Island Index, an initiative of the Rauch Foundation, provide some tantalizing and compelling evidence. Comparing Nassau and Suffolk to the counties of Fairfax and Loudoun in northern Virginia, a place with similar demographics but very different government structures, the Center for Governmental Research found some striking contrasts.
On a per capita basis, property taxes are 45% higher on Long Island than in northern Virginia, even though incomes and home values are actually higher in the Virginia counties. That difference pales in comparison to the number of governments, however. With 439 units of government, Long Island has 26 times the 17 separate governments in Fairfax and Loudoun, an area with about half the population of Nassau and Suffolk. Largely for historical reasons resulting in different state attitudes toward home rule, county governments in Virginia provide most of the services offered by municipalities and districts in the tri-state area.
It would be simplistic, and incorrect, to ascribe the difference in property taxes primarily to layers of government. As the report documents, a number of factors, from state grants and mandates to salary differences, contribute. But the report goes beyond that with an excellent job of parsing these factors to estimate how much of the difference cannot be attributed to state requirements or salaries.
The punch line - $372 per person - represents 22% of the $1,722 difference in per capita costs. While there are still a number of possible causes for the difference, it does not appear to be due to variances in cost of living or quality of services. In fact, the companion study, a survey conducted by Stony Brook University's Center for Survey Research, found that residents of Fairfax and Loudoun rate the quality of their local services higher than Long Islanders. (Both reports can be found on www.longislandindex.org.)
The report's authors concluded that "the most likely explanation is that the majority of the $372 per capita is based on fundamental structural differences associated with the governmental models in the two regions," with Virginia able to achieve economies of scale by providing services at the county level.
By themselves, these reports are no more likely to change the politics of home rule than the Woods report did in the 1960s. Nor do they answer the tough questions of how government should be reorganized to address questions of equity as well as efficiency. But they do establish both a rationale and a reasonable benchmark for an increasingly active group of citizens and political leaders willing to take on governmental reform.
Ever since Robert Wood put a number to the problem in his 1961 classic, 1400 Governments: The Political Economy of the New York Metropolitan Region, regionalists have argued with little success that balkanized, overlapping units of government result in the inefficient use of scarce resources, from land to tax revenues and political energy.
Despite the theoretical appeal of such arguments, they were simply never a match for citizens' attachment to locally controlled schools, fire houses, police departments and parks, or to the fierce resistance from local officials. In fact, in 1996 RPA estimated that the number of governments in the region had grown to over 2000, partly because the region had expanded, but also because municipal divisions, special districts and public authorities had added new layers to the mix.
The issue is getting a new hearing, however, driven by the rumblings of property tax revolt in New York, New Jersey and Connecticut. With no easy answers for reducing some of the highest property taxes in the nation, political leaders in states, counties and localities are looking for creative ways to share services. Even taboo topics like fire or school district consolidation are getting some serious attention across the region.
In New Jersey, Governor Corzine and a number of legislative leaders are pushing for stronger incentives for shared services and consolidation as part of the package for property tax reform. On Long Island, both County Executives Tom Suozzi in Nassau and Steve Levy in Suffolk have launched efforts to identify savings from the consolidation of taxing districts and other local efficiencies. This in turn has triggered a vigorous debate for how much savings you can actually extract from economies of scale without sacrificing service quality.
To help resolve this question, two studies released this week by the Long Island Index, an initiative of the Rauch Foundation, provide some tantalizing and compelling evidence. Comparing Nassau and Suffolk to the counties of Fairfax and Loudoun in northern Virginia, a place with similar demographics but very different government structures, the Center for Governmental Research found some striking contrasts.
On a per capita basis, property taxes are 45% higher on Long Island than in northern Virginia, even though incomes and home values are actually higher in the Virginia counties. That difference pales in comparison to the number of governments, however. With 439 units of government, Long Island has 26 times the 17 separate governments in Fairfax and Loudoun, an area with about half the population of Nassau and Suffolk. Largely for historical reasons resulting in different state attitudes toward home rule, county governments in Virginia provide most of the services offered by municipalities and districts in the tri-state area.
It would be simplistic, and incorrect, to ascribe the difference in property taxes primarily to layers of government. As the report documents, a number of factors, from state grants and mandates to salary differences, contribute. But the report goes beyond that with an excellent job of parsing these factors to estimate how much of the difference cannot be attributed to state requirements or salaries.
The punch line - $372 per person - represents 22% of the $1,722 difference in per capita costs. While there are still a number of possible causes for the difference, it does not appear to be due to variances in cost of living or quality of services. In fact, the companion study, a survey conducted by Stony Brook University's Center for Survey Research, found that residents of Fairfax and Loudoun rate the quality of their local services higher than Long Islanders. (Both reports can be found on www.longislandindex.org.)
The report's authors concluded that "the most likely explanation is that the majority of the $372 per capita is based on fundamental structural differences associated with the governmental models in the two regions," with Virginia able to achieve economies of scale by providing services at the county level.
By themselves, these reports are no more likely to change the politics of home rule than the Woods report did in the 1960s. Nor do they answer the tough questions of how government should be reorganized to address questions of equity as well as efficiency. But they do establish both a rationale and a reasonable benchmark for an increasingly active group of citizens and political leaders willing to take on governmental reform.
@RegionalPlan
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