The impact of shared service mandates should not be oversold | Commentary | -- Your State. Your News.

Jun 02nd
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The impact of shared service mandates should not be oversold

goldencarl032610_optBY CARL GOLDEN

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 is contained in legislation approved this week 25-9 by the State Senate to deny state aid to 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.

While that belief has held firm over many years, the steadily rising property tax burden and anger over a perceived inability to deal effectively with it has led to serious questioning about whether the rigidity of home rule should continue to stand in the way of saving taxpayer dollars.

Shared services compacts have always been entered into voluntarily and have never become widespread. The overwhelming number of the state’s 565 municipalities have opted to remain independent of one another while maintaining essentially duplicative administrative and management structures to deliver the same types of services.

Nativist sentiment and fears that local control and decision making will be lost if some government functions are shared have always been sufficiently strong to overcome the desire to operate more economically.

The legislation authorizes the state Local Unit Alignment, Reorganization and Consolidation Commission to move ahead with developing and recommending shared services agreements for municipal governments and, in collaboration with the Treasury Department, arrive 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 requiring public employees to 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 and a loss of civil service and job security protections.

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 the Assembly approve Sweeney’s bill (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 over reliance on property taxes is unsustainable, actions similar to requiring shared services -- no matter how sincere and nobly motivated -- are little more than stop gaps.

It doesn’t mean steps shouldn’t be taken, but that 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.


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