The Real Story Behind City/County Consolidation

Posted: November 4, 2011 in Consolidation
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The idea for the City of Amsterdam to merge with other localities to provide police and fire protection, maintenance and other services has been increasingly talked about in the local media, blogsphere and among local politicians this election season. The further goal of completely disbanding the city to be part of a wider, single government encompassing all of Fulton and Montgomery County, is also one that is increasingly being alluded to.

The promise of consolidation seems attractive – more efficient services with lower cost which means lower taxes. What concerns me greatly, however, is the shocking lack of any specific evidence as to whether consolidation will actually achieve this or not. The biggest cheerleader of consolidation, the Amsterdam Recorder, under the direction of publisher Kevin McClary, has put out editorial after editorial supporting the idea with little more than anecdotes and vague generalizations. The conversation on the subject is startlingly lacking in supporting details, which should raise a red flag for all of us.

Looking for some objective analysis on the concept of city/county consolidation led me to discover a fascinating paper written by by H.V. Savitch and Ronald K. Vogel from the University of  Louisville about the 2003 consolidation of the city of Louisville and Jefferson County, Kentucky. This paper is challenging to read, however I would urge anyone seriously concerned about the issue to take the time to look at it. The study describes and analyzes the events and circumstances that led to the merger and takes a critical look at the results. I found a remarkable similarity between the story of this merger and what is currently happening in our area.  The following summarizes the main points of the paper.

Louisville suffered from problems similar to ours
According to the study, the idea to merge the city of Louisville and Jefferson County originated from the same problems that many cities (including Amsterdam,NY) face: declining industrial base, stagnant population growth, increasing poverty and competition between the city and other localities for tax revenues. The first attempt at merging came in 1982 and was narrowly voted down in a public referendum, only to be revived again in the 1990’s.

The consolidation push was spearheaded by big businesses and the local media

“Business elites and the newspaper continued to focus on government organization as a major impediment to Louisville’s future health…A substantial network of organizations and local personalities took up the issue. The local chamber of commerce…took the lead working with business leaders and donors. These included the city’s largest corporations…”

Costs saving studies were completed, showed no benefit, but the results were ignored
In order to answer calls for substantiation, consolidation proponents asked local accounting firms to conduct an analysis.

“The firms produced a six-page financial analysis that covered eight functions representing just 38% of the city-county budgets…Excluded from the analysis were nine other services like police and fire. The analysis found no cost savings; nor could it identify any substantial duplication of services. The most the analysis could say about this limited number of functions was that ‘no major additional costs or cost savings’ could be found by merging…The firms admitted that is was ‘impossible to accurately predict where these benefits might arise’. Searching for a ray of light, the firms speculated that a merged government would somehow find benefits.

Studies of previous city/county mergers showed increase in costs and taxes, but were also ignored

“One study by Edwin Benton and Darwin Gamble (1984) compared merged Jacksonville with unmerged Tampa [Florida]. The authors state ‘These findings demonstrate that city/county consolidation has produced no measurable impact on taxing and spending policies of the consolidated government…In fact, both taxes and expenditures increase as a result of consolidation’.

Similar results are cited from a study of consolidation in the Miami, FL area.

Studies showed that economic development was not related to government reorganization

“Jared Carr and Richard Feiock (1999) find no relationship between economic development and consolidated governments. Their controlled study of 18 consolidated city-counties examined “annual growth in manufacturing, retail, and service establishments” before and after consolidation. These researches found that economic growth was a function of broader economic trends and not government reorganization…. John Blair and Zhongcai Zhang (1994) take a different tack demonstrating that local economic development depends on state prosperity. For them, states rather than metropolitan regions constitute the critical variable” 

The local paper played an important part in the push for the consolidation

“…the city’s newspaper…the Courier-Journal, was central to merger’s success…As the area’s only at-large newspaper, it is the sole source of information on local affairs. The Courier stands as a megaphone for Louisville, and it not only conveys the news but also construes and shapes it. The Courier spared no effort in promoting merger. It’s editorials writers personally attacked anyone who opposed merger, accusing officeholders of being ‘fear mongers’ who engaged in ‘obstruction’…Editorials sometimes devoted whole columns to individual opponents, accusing them of …selfishly defending the ‘status quo’.”

The city never got its own vote
The consolidation plan was fast-tracked through the Kentucky state legislature early in the year and defined only one referendum, to be voted on by the entire region being considered for consolidation. In other words, the citizens of the city of Louisville did not get to determine for themselves whether they wanted to consolidate or not, rather it was decided by the entire region as a whole.  The referendum passed later in the year and took effect in 2003. This merger was actually the first successful merger between a major city and a county in 30 years.

The end result of the merger was more power in fewer hands
The merger between Jefferson County and the city of Louisville created a single government that commanded a budget and workforce that was many times larger than what had existed before. The paper concludes:

“The irony of this realignment is that it has diluted the city’s core constituency and weakened it’s ability to defend itself…Consolidation was used to lodge a great deal of power in a “strong mayor”, making it more difficult for poorly  financed candidates to run for that office.

After examining new political institutions and the local newspaper’s interaction with the merger campaign, we find that consolidation is better explained by a logic of opportunity – one that emphasizes political advantage, individual fortunes, and pressure politics rather than policy considerations. The major consequence of city-county consolidation in Louisville is likely to be a more internally cohesive regime, coupled to weakened city neighborhoods that are less able to influence the development agenda and more rather than less urban sprawl.”

 So what does this mean for Amsterdam?

Let me be clear, I’m not saying we can look at the consolidation in Louisville as an exact parallel to our own situation.  I don’t want to dismiss the concept of consolidation based solely on what happened in other regions. Missing from this paper is a followup analysis on the actual effects of the merger on tax levies (however I believe the citations of studies on other previous mergers are telling.)   I think there are enough striking similarities here that should motivate all of us to take a closer look at the process going forward. Here’s what I think we should look for:

  • We should take a closer look at which politicians, organizations or corporations are leading the charge for consolidation, what the connections are between them and what they have to gain.
  • We should take a closer look at Recorder publisher Kevin McClary (who is a board member of the Montgomery County Chamber of Commerce) and his relationships to the larger corporations in the area
  • We should expect the Recorder to continue it’s increasingly bold stance on city-county consolidation, continuing to provide only ideological and anecdotal arguments rather than hard evidence of real cost savings for tax payers. Look for continued patronizing characterization of opponents of consolidation as “fearful”.
  • We should take into account the pro-consolidation bias in the Recorder’s endorsements for the upcoming election
  • We should demand that legitimate studies be done before any consolidation plans are put up for a vote. We should reject any plan that cannot be shown to have significant cost savings.  Pay close attention to the results of the upcoming study on consolidating highway services to be conducted by the Montgomery County Business Development Center 
  • Watch for a fast-tracked, under-the-radar initiative to get a referendum on consolidation approved by the state legislature. Much of the ideology for consolidation comes from NY Governor Andrew Cuomo and there appears to be widespread, bi-partisan support among state legislators for the concept.

 Thoughts, impressions, arguments and refutations are welcome in the comments section!

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Comments
  1. […] Tim Becker on his ParsNova blog posts a smart, critical and hardly asked set of questions on the con… mantra– namely, where’s the business case that consolidating locally makes sense (hint: there is none) and the impolite question of does the city stand to gain from consolidation? […]

  2. snafu says:

    Maybe the recorder could lead the way and merge with the leader hereld…then we can see first hand how well it would work.

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