State Senate President Stephen Sweeney is on the warpath again to force towns to share-services or even better, have towns consolidate through merger. Since 2012, Sweeney has attempted to pass a bill which would, among other things, empower the state to withhold aid to towns that do not jump on the shared-services bandwagon. Sweeney and others are under the impression that less municipalities will lead to more efficient governance. The problem for proponents of this theory is that the facts do not support it.
In the wake of growing cries from Senator Sweeney and other merger advocates, two respected Rutgers professors decided to research the topic to see if there was evidence proving that making two or more small towns into one big town would actually save any money. Crunching data from the NJ State Division of Local Government Services and the Census Bureau they concluded that it costs, on average, about the same per capita to run any municipality in New Jersey, regardless of size.
Marc Pfeiffer, Assistant Director of the Bloustein Local Government Research Center says the idea that New Jersey has too many municipalities is a “folk hypothesis.” While he acknowledges that consolidation works occasionally, he says it isn’t always the answer. “Arbitrary notions of that hypothesis that just consolidating is going to be cheaper may sound good on the surface, and for example, yes, you don’t need two police chiefs,” said Pfeiffer. “But now with a larger department you made need a chief and a deputy chief. And you may need another captain.” (Newsworks; April 2014)
We decided to crunch some numbers ourselves to see if the same held true for schools districts. Using figures for the 2012-13 school year as reported by the NJ State Department of Education, we found some very interesting statistics. In the report, school districts are broken down into groups by the number of grades and the total number of students. For accuracy, we only correlated data from districts covering K-12. We then determined the average cost per student and the average percentage of their school budgets that are supported by state aid as opposed to local taxes. Then we through Riverdale in for comparison. Here’s what we found…
Much to Senator Sweeney’s chagrin, these figures show that larger school districts, on average, require more state aid to make ends meet than smaller ones. The truth is really common sense. The only way to reduce costs for our police department and our schools is through prudent contract negotiation, cooperation and innovation. Anything else and we will be compromising our safety through reduced police coverage or sacrificing our children’s education through larger class sizes and reduced curriculum.
As you are probably aware, over the past several years, there has been a big push in Riverdale to outsource basic services that are usually managed by a town’s administration. Water and Sewer Billing, Tax Assessment, Tax Collection, and Building Services have all been outsourced through “shared-services” or “inter-local” agreements with nearby towns. Just a few years ago, Mayor Budesheim proposed merging our Police Department with Butler’s and, of course, there are the perennial rumblings of merging our school system with Pompton Lakes.
In business, when a smaller company starts turning over parts of their operations to a larger one in an effort to save money, such as manufacturing or distribution, the outcome over time is almost always the same, the larger company takes over the smaller one. This is the outcome that Sweeney is hoping for by encouraging towns to start “sharing services”. There is an alternative and it’s called getting your house in order. The meager savings we achieved in the short term through outsourcing, could have been achieved through automation and reorganization. It may have taken a little longer but the savings would be perpetual and without sacrifice.
Take it from someone who spent the last 25 years in corporate management, no matter what politicians like Sweeney say, you cannot run your operations more efficiently if you do not run your operations.