We often hear that, “government should run more like business.” The meaning is clear: the public sector is bureaucratic and inefficient and citizens would be better served, if public policy makers would try to replicate success stories from the private sector. This argument is often made by those who advocate for consolidation (sometimes voluntary, sometimes not) of local governments.
The comparison is far from perfect. Governments are not producing widgets but rather providing order, justice, civil rights and essential services to taxpayers, in as a cost effective and efficient manner as possible. There are certainly lessons that the public sector can learn from the private sector, when applicable, and vice versa. The savings, however, that can be achieved through consolidation are often over-stated, as demonstrated by the November 2014 report issued by the Bloustein Local Government Research Center at Rutgers , “Size May Not Be the Issue.” The results of that study raise serious doubts about the ‘conventional wisdom,’ which is based on the questionable assertion that New Jersey has ‘too many’ local governments, and leaps from that ‘truism’ to the equally arbitrary conclusion that significant savings can always be realized by the consolidation of municipalities.
That’s what comes to mind when reading a bill that now sits on Governor Christie’s desk, S-690. The sponsors claim that the bill is intended to increase flexibility and provide new tools that would be available to municipalities considering consolidation. In its current form, the bill will actually limit local flexibility, increase consolidation costs and, thereby, discourage future consolidations.
The League opposes the bill in its current format and has requested the Governor to either veto or conditionally veto the legislation. The Governor pocket vetoed identical legislation last session.
The League supported a prior version of this initiative (S-2679, First Reprint, dated December 12, 2013), when the Senate sponsor accepted our suggested amendments. Those changes restored the requirement that a voter referendum is required for the approval of a proposed consolidation plan; restored the requirement that a State agency, in making decisions concerning consolidation, must take into account local conditions, the reasonableness of proposed decisions, and the facilitation of the consolidation process; and restored the requirement that the Department of Community Affairs prepare a fiscal study of a consolidation. Those amendments were designed to ensure better informed voter participation in the process. Based on those amendments, we supported the bill.
But subsequent Assembly Floor amendments, adopted June 25, 2015 (see S-316, Third Reprint) actually limit local flexibility, increase consolidation costs and, thereby, discourage future consolidations. Those provisions, which are now found at Sections 3.e., f., and g. of the bill, grant tenure, continued employment and terminal leave rights to select employees of consolidating municipalities.
Based on the inclusion of those cost-drivers in the bill, the League expressed strong opposition to passage of S-690.
Contrary to what certain advocacy organizations claim, the League does not oppose consolidation. Local officials should be provided with any and all tools to enact cost efficiencies, not be burdened with unnecessary costs drivers. That’s one lesson to be learned from the private sector.
Local governments should be enabled to achieve these efficiencies voluntarily and with the full consent and participation of the ’share-holders’, i.e. property taxpayers. Ultimately it’s our taxpayers who need to make the call. To some that’s defending the status quo. To us, it’s common sense.
The Governor has until May 1 to sign, veto or conditional veto the legislation.
Jon Moran, Senior Legislative Analyst, email@example.com , 609-695-3481 x121.
Michael Cerra, Assistant Executive Director, firstname.lastname@example.org , 609-695-3481 x120.