Shared services, consolidations tough sells in N.J.

Gov.-elect Christopher J. Christie has offered few details on how he plans to cut taxes and the size of government, saying he doesn't want to make promises he cannot keep.

What he has encouraged, however, is municipal consolidations and shared services.

It's an idea that's been around for decades in New Jersey, now home to 566 towns - more per square mile than any other state - and 616 school districts.

Weighed down by a difficult economy, more municipalities are sharing services or at least exploring the idea. While combining police, trash, or court services may make sense in many situations, experts caution they don't always save much - or any - money.

"It's intuitively appealing that if you take those 566 municipalities and combine them into fewer, it should save you money," said John Fry, a former Merchantville borough administrator who now works as a local government consultant. "I think the intuition is correct in some areas but not in others."

For anyone who believes consolidations are a silver bullet to cut taxes, Fry warned, "There's no way you're going to cut property taxes by 50 percent through shared services. You're looking at small differences."

Full-scale municipal mergers remain elusive, regardless of logical arguments in their favor.

On the same day voters chose Christie over Gov. Corzine, Wantage Township and Sussex Borough in Sussex County became the latest towns to reject a merger.

On paper, the reasons for merging appeared clear-cut. A 10-member commission that spent 16 months studying the idea voted 9-1 in favor of consolidation. The two municipalities already share some recreational facilities and schools. Residents of both towns were expected to save money.

On Election Day, residents of Sussex - which is surrounded by the much larger Wantage - voted for the merger. But Wantage residents voted against by a 3-1 ratio.

Elsewhere, even the idea of sharing services has caused conflict.

The tiny borough of Medford Lakes last month turned down an opportunity to save millions of dollars in the long run by sharing police with Medford Township.

Medford Lakes, a one-square-mile Pinelands community, is surrounded by Medford, which is 40 square miles. Shared services advocates say such "doughnut hole" towns are prime targets for consolidation.

Medford Lakes officials voted to keep their own police department, despite a study showing that borough residents would save an average of $426 a year by dropping it.

The prospect of losing the department led to a public outcry, with many residents fearing they would lose their identity and wouldn't be adequately protected.

At the state League of Municipalities' annual conference in Atlantic City yesterday, the issue of home rule came up during a discussion of legislative leaders.

Sen. Stephen Sweeney (D., Gloucester), who is expected to become the next Senate president, said in a discussion with reporters after the panel that Gloucester County has a countywide emergency medical services system built into its county tax rate but that only 14 of 24 towns participate. The 10 others pay for EMS twice, even though the county's response times are better than the national average, Sweeney said.

"If you have something that's better, and I can prove it's better, and it's more cost-efficient, why would you pay for it twice?" Sweeney asked.

For years, New Jersey's politicians have talked about shared services and consolidations as one of the keys to cutting the cost of government and thereby taxes. Yet only one consolidation has actually occurred in recent memory - when Pahaquarry Township in Warren County, with a population of 6, merged with Hardwick Township in 1997.

The state Department of Community Affairs estimates that towns have put mergers up for votes less than six times in 40 years, department spokeswoman Lisa Ryan said.

Last year, Gov. Corzine threatened to all but eliminate state aid to the state's smallest towns in hopes of pushing them to merge. He was forced to back off after a loud push from mayors and legislators. Christie has said that Corzine's approach was too harsh.

Some argue that to lower property taxes, the emphasis should be on other issues.

Binding arbitration, for example, helps determine salaries for police and firefighters, the largest line item in a municipal budget, said William G. Dressel Jr., executive director of the state League of Municipalities.

"There is a direct relationship between those awards and property taxes," Dressel said.

He also said that because up to 80 percent of most property tax bills go to schools, any successful effort to contain property taxes would have to address school costs.

Marc Holzer, dean of Rutgers University's School of Public Affairs and Administration, said that not all municipal consolidations would save money. Many studies have shown that smaller municipalities can actually be more efficient than larger ones because they rely more heavily on volunteers or because employees take on a broader range of responsibilities than in larger towns, he said.

Another reason consolidations may not produce savings is that municipal employees typically end up being paid at the rate of the better-paying town.

Last year, the Local Unit Alignment Reorganization and Consolidation Commission was charged with looking at ways to cut the number of municipal governments and has been studying 40 small communities in South Jersey to determine which might be candidates for consolidation. But the commission's recommendations would be just that - with the towns having the final say over whether to merge.

Since 2004, the state Department of Community Affairs has awarded about 190 grants totaling more than $11.4 million to municipalities through a program to encourage shared services.

In South Jersey, Gloucester County is undertaking a pilot study to examine tax assessment at the county level.

At the League of Municipalities convention, Assembly Speaker Joseph Roberts Jr. (D., Camden) said home rule would be, without question, the biggest issue over the next decade in New Jersey.

"In the abstract, everyone tells you that they love consolidation and regionalization and shared services, but when it affects their town, it's a different story," Roberts said.