Does size really matter?

Apparently size matters where the Governor’s concerned. He’s proposed reducing aid to local towns less than 10,000 residents and slashing it completely for communities smaller than 5,000.

As reported in the Philadelphia Inquirer this week: ”The governor says that governments for small municipalities are among the root causes of New Jersey's property taxes, which are the highest in the nation. He has suggested that some towns merge.”

But here’s where a bit more analysis or fact checking would go a long way toward helping readers better understand the budget debate…the kind recently offered by The Record’s James Ahearn’s in his column: “Real help from Trenton, not talk”.

Consider these facts easily found with a few clicks of the mouse from a recent 2005 Local Public Finance Database prepared by the Bloustein School of Planning and Public Policy at Rutgers:

  • The average municipal expenditures per capita were $1,151 statewide.
  • Of the 323 communities with populations under 10,000, 60 % had municipal per capita budgets below the state average.
  • For the 243 larger towns and cities, 66% similarly had municipal per capita budgets below the state average.
  • The state’s ten lowest ranked municipal spenders per capita were all communities with less than 10,000 residents – in fact, spending in these towns averaged two-thirds lower than the state average.
  • The state’s ten highest ranked municipal spenders per capita all had populations greater than 10,000 residents, including Trenton, Newark, Camden and Atlantic City. On average, the top ten ranked 113% higher than the state average.

So where are the inefficiencies in smaller governments? Does size really matter?