Carl Golden / New Jersey may be set to force towns to share services - pressofAtlanticCity.com: Commentary

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Carl Golden / New Jersey may be set to force towns to share services

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Posted: Thursday, November 29, 2012 12:01 am

Carl Golden / New Jersey may be set to force towns to share services

After years of relying on gentle persuasion and half-hearted incentives to convince municipal governments to reduce expenses by joining with neighboring communities to deliver services to their constituents, the Legislature appears poised to order shared service agreements and punish those who refuse to comply by withholding a portion of their state aid allotment.

It's reminiscent of the old story about the farmer whose mule refused to pull the wagon. After cajolery and promises failed, the farmer delivered a thunderous blow between the animal's eyes with a two-by-four.

"Will that make him move?" the farmer was asked.

"No," he replied, "but I've got to get his attention first."

In this case, the attention-getter under legislative consideration involves a loss of state aid for municipalities who, after a study has determined costs can be reduced by sharing services, refuse to accept the agreement.

The aid loss would be equivalent to the amount of money which would be saved by sharing services, forcing the recalcitrant municipality to either cut spending on other programs and services or turn to property taxpayers to ante up more money to cover the loss.

Successive legislatures and administrations have consistently shied away from requiring municipal governments to share services, a testament to the endurance of the tradition of home rule - the principle which holds that local officials are better equipped to determine local needs and how to pay for them without outside interference or direction.

That belief has held firm for years, but steadily rising property taxes and anger over a perceived inability to deal with them have led to questions of whether home rule should stand in the way of saving money.

Shared services compacts have always been entered into voluntarily and have never become widespread. The overwhelming number of the state's 566 municipalities have opted to remain independent of one another while maintaining essentially duplicative administrative and management structures to deliver the same types of services.

The legislation under consideration would create a state panel called the Local Unit Alignment, Reorganization and Consolidation Commission with responsibility for developing and recommending shared services agreements for municipal governments and, in collaboration with the Treasury Department, arriving at an estimated cost savings.

Senate President Steve Sweeney of Gloucester County, the legislation's sponsor, has carved out a reputation as a leader in efforts to control property taxes, throwing the weight of his office fully behind the cap on tax rate increases, changes in the binding arbitration system for public safety personnel, and the requirement that public employees contribute more to their pension plans and health benefits premiums.

Opposition to mandating shared service agreements comes - not surprisingly - from local officials who resent what they see as the state encroaching on their decision-making responsibilities and nibbling away at their autonomy.

Public employee groups fear that shared services will inevitably lead to workforce reductions.

Sweeney appears ready to take on the battle, however. He's conceded that job losses are a distinct possibility but makes the case that shrinking the size and cost of government can no longer be merely campaign rhetoric but must be an attainable goal.

With the average property tax bill in New Jersey just under $8,000 a year - the highest in the nation - it would seem logical to explore all avenues to ease the burden, including requiring local governments to combine or centralize as many of their functions as possible and achieve greater economies.

Should Sweeney's bill win legislative approval (Gov. Chris Christie has already voiced his support for it), it will be a watershed moment in the relationship between state and local governments, a bold pushback against the heretofore inviolate concept of home rule.

However, until state government demonstrates the political will to confront the core issue of the existing tax structure - whether the property tax is the fairest and most efficient method of financing the operations of more than 1,200 public entities - the piecemeal approach as embodied in mandating shared service agreements will continue.

Until state government comes to the realization that continuing the overreliance on property taxes is unsustainable, actions similar to requiring shared services - no matter how sincere and nobly motivated - are little more than stopgaps.

That doesn't mean steps shouldn't be taken, but their long-term impact shouldn't be oversold.

Carl Golden is a senior contributing analyst with the William J. Hughes Center for Public Policy at the Richard Stockton College of New Jersey.

Posted in on Thursday, November 29, 2012 12:01 am.

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