In the decades of debate over the most effective way to curb and hopefully reverse the inexorable rise in local property taxes, governors and legislatures have stepped gingerly around the issue of forced municipal consolidation or mandatory shared services.
Ever wary of brushing against the third rail of home rule and local control, state government has always settled for supporting and encouraging shared services along with the promise of modest financial aid to carry out feasibility studies.
Senate President Steve Sweeney has proposed legislation to create a bureaucratic tongue twisting Local Unit Alignment, Reorganization and Consolidation Commission, to determine which municipal services now provided separately by the state’s 566 local governments can be shared and what level of savings would result.
Municipal governments would be required to adopt the recommendations or seek voter approval via referendum. A failure to do so would result in the municipality losing state aid in an amount equivalent to the projected shared services savings.
Sweeney’s legislation has what all prior attempts did not. A mandate. And, financial punishment for ignoring the mandate.
Such force would have been unthinkable in the past, but Sweeney’s willingness to confront the issue now is indicative of the depth of discontent over rising property taxes and what is perceived to be the failure of state government to deal effectively with it.
It appears critical mass has been reached and, while the state’s imposition of limits on property tax rate increases along with reform of contract arbitration and the public pension and health benefits program have been helpful, the belief is they have not gone far enough toward providing meaningful relief.
When, for example, Gov. Chris Christie announced his proposal for a 10 per cent cut in the state’s income tax rates, polls showed that while any tax reduction was welcome, nearly 75 per cent said property taxes were far more burdensome and should be addressed first.
The Governor has expressed his support for shared services, but it’s unclear whether he agrees with Sweeney that mandating it and penalizing non-compliance is an idea whose time has come.
Home rule --- the principle that local officials are better equipped to address local problems than a remote state government --- is a tradition so entrenched that it has perpetuated a system in which some 1,200 governing entities rely on property tax revenue to fund their operations.
It is difficult to argue with Sweeney’s assertion that “We collect more than enough money to run government in the state, probably too much. But we have too much government.”
Not surprisingly, the State League of Municipalities is opposed to Sweeney’s legislation because it said it could result in a loss of state aid to some communities.
That, of course, is precisely the point --- denying assistance to those municipalities which refuse to adopt money saving measures through shared services arrangements. It reinforces also the League’s long held view that controlling property taxes can be accomplished through increased state aid even though history is not on the League’s side in this debate.
To the League’s credit, it welcomed many elements of the Governor’s agenda to provide local governments with the wherewithal to deal with rising costs, but in this case it seems the organization is locked into the view that sharing services should be voluntary and property taxpayers should not suffer if their governing body chooses to remain apart.
Others have argued that shared services is merely the foot in the door, that forced consolidation will inevitably follow.
Sweeney has drawn criticism also from public employee unions because the legislation provides for removing Civil Service status from employees whose job status might be affected by a shared service agreement.
There are certain to be workforce reductions if a shared service plan is implemented and Sweeney --- who has already endured heavy union criticism for his support of the health and pension benefits reform package --- will be a target of union wrath yet again.
By limiting the legislation’s reach to municipal governments, the proposal affects what is generally the smallest portion of a property tax bill. School districts consume by far the largest share --- estimated at upwards of 60 per cent --- while counties take the second largest portion.
It is again indicative of the feeling, though, that property taxes have grown so wildly out of control that addressing even a fraction of the overall cost is worthwhile doing.
Sweeney seems convinced that significant savings can be achieved through shared services, even though it is much too early in the process to arrive at a credible estimate.
He should be commended for taking on a task which has always carried considerable political risk. But, with the average property tax bill at nearly $8,000 --- the highest in the nation --- the time may have arrived when failing to act is a greater risk.
Carl Golden is a senior contributing analyst with the William J. Hughes Center for Public Policy at Richard Stockton College.