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Property Taxes, School Funding issues
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3-7-08 Small towns have big problems w Gov's. proposed aid cuts
'... [and] At a hearing before the Assembly Education Committee yesterday, nine [invited] school superintendents said Corzine's extra ... state aid has done little to forestall layoffs, program cuts and school closures. "It just does not do anything to keep pace with increasing costs over which we have no control..."We're gratified for any increase we receive, but our budget will suffer this year..."

THE RECORD, SUNDAY OPINION PAGE Reock: Come together - Should We Merge? Sunday, February 17, 2008BY ERNEST C. REOCK JR. Common wisdom indicates that the many small communities of the state must be inefficient, and that governmental services could be provided at far less cost if they were joined together. But is this true? ONCE AGAIN, the drums are beating for a move to consolidate many of New Jersey's local municipalities into larger governmental units. Earlier this month, Bergen County Executive Dennis McNerney called upon Trenton to offer financial incentives for the merger of towns with fewer than 10,000 residents. McNerney said, "The surest way to significantly lower homeowners' property taxes is to merge small towns and reduce administrative overhead." He suggested a pilot program that would double the homestead rebate and freeze taxes for residents of newly merged towns. Common wisdom indicates that the many small communities of the state must be inefficient, and that governmental services could be provided at far less cost if they were joined together. But is this true? When we rank the state's municipalities by size and examine their budgets, we find that there is little difference in the average budget per capita for large and small communities: Why is this so? What happens to the "efficiencies of scale" that so many people expect to find? Fewer services: The answer appears to be that small municipalities, on average, simply do not provide the services that larger places offer. Local mayors and council members have wide discretion in the governmental activities that they authorize and the level at which they are provided. Police forces may be staffed well or they may be stretched thin; in some cases, they are not provided at all. Garbage may be picked up once, twice or three times a week, or it may be the responsibility of the individual homeowner, who must contract with a private scavenger. Roads may be plowed well or poorly. There may be a rich assortment of recreational and senior citizen activities, or there may be none. Fire protection may be by a full-time municipal department, or it may rely on the services of volunteers. And so on through the whole gamut of public services. As communities grow, there is a tendency to make municipal departments more professional and to add new public services. Administrators of those departments may tend to judge themselves more by what services they offer and how well they provide the services, rather than how successful they are in keeping the tax rate down. Thus, while the consolidation of municipalities may lead to better services -- provided more efficiently -- the added cost may balance out the economies of scale. School districts differ: While these observations apply to municipal governments, they are less applicable to school districts. While municipal officials have considerable discretion in the public activities they undertake and the services they provide, school districts are required to offer a relatively uniform public service throughout the state. True, there are variations among school programs, but they have a much narrower range than the services of municipal government. Thus, there is more likelihood that consolidation of school districts could achieve significant cost savings. But even here the potential for property tax reduction is less than many people anticipate. In a study I conducted in 2002-03, the total statewide savings from cutting the number of school districts roughly in half was estimated at $365 million – a large amount of money in itself, but not much against a statewide school expenditure of more than $14 billion in that year. The fact seems to be that New Jersey residents like their small towns. We probably should recognize the unique geographic situation of the state; that is, its location between two major cities – New York and Philadelphia -- that are situated just outside its borders. Economic advantages Many of the people who now live in New Jersey, or their ancestors, have located to this state because of the economic advantages of being near one of these two big cities. When they came to this part of the world, either from overseas or from other parts of the United States, they had the choice of taking up residence in one of these major urban places or of living outside of them but enjoying the advantages of closeness. Obviously, these New Jersey residents or their ancestors did not choose urban living – they chose small-town living. And this is what they are getting in New Jersey. This is a small-town state by choice, and a large majority of its residents apparently prefers to keep it so. Find this article at: http://www.northjersey.com/opinion/moreviews/15711007.html?c=y&page=2 Ernest C. Reock Jr., who began teaching at Rutgers University in 1950, was director of the Rutgers University Center for Government Services, a unit of the Edward J. Bloustein School of Planning and Public Policy, from 1960 until he retired in 1992. He is currently professor emeritus at the university. February 17, 2008