EDISON – Reports from Ball State University in Indiana for the New Jersey Association of Realtors found that combining local police and fire departments, school districts, even entire municipalities will save taxpayers money.
How much money taxpayers could save would depend on which method local officials decide to implement.
The study also supported the 2 percent annual property tax levy cap that was passed last year, saying it will save property taxpayers money in the long run.
The reports were released Monday by the New Jersey Association of Realtors, which commissioned the study.
“Determining ways to control the property tax burden isn’t just a means of helping more people achieve homeownership, it’s also a common sense approach to keep families in New Jersey and in their homes,” NJAR CEO Jarred Grasso said in a statement.
While savings on providing existing government services can also be found by having more people pay for them, a method known as economies of scale, they are minimal compared to merging towns and schools districts, which experts call the efficiency model.
Consolidating even one school district, they said, could save the state between $7 million and $10 million, according to Michael Hicks, director of the Center for Business and Economic Research at Ball State University.
“The two reports on consolidation concluded that, while the potential for lower property taxes is high by reducing the number of governmental units in a county, that cost savings for taxpayers would be subject to other fiscal decisions made by local governments facilitating the consolidation. These include contract decisions for employees in the jurisdictions where the consolidation occurs,” Grasso added.
Support for tax cap
The 2 percent annual property tax levy cap also received support by the Ball State professors.
Dagney Faulk, a research director at the university’s Center for Business and Economic Research, said the tax levy caps could save households more than $1,100 each. He also predicted the state’s economy would grow 1.5 percent and create some 78,500 jobs.
Grasso said the cap study “clearly shows that New Jersey is positioning itself to be an incredible relocation option for families and businesses.
“It also indicates that we are making strides in our efforts to create more affordable conditions for our current residents.”
Gov. Chris Christie supports consolidations, and last month proposed legislation that would help towns such as the two Princetons deal with the costs of possible consolidation.
The study said that while consolidating governmental units leads to substantial savings, “this does not mean that specific governmental activities and especially small districts cannot be consolidated to reduce costs.
The study said that the high number of local governments are the result of inefficiencies and they have “unclear and duplicate responsibilities.”
Among the study’s findings are:
*The costs small-town residents pay for local government costs “are higher than in medium-sized and larger governments.” These services include office staff, finance, fire servies, recreation, and police, among others.
*Consolidating two city police departments could save taxpayers between $964,000 and $4.5 million, depending on the municipalities’ size.
*Consolidating two fire departments could yield savings from $98,000 to $365,000.
*Local government consolidation could lead to between $11.5 million and $45 million in savings.
*Merging two school districts could lead to savings between $10.5 million and $39 million.
Previous coverage:
Christie backs Princeton consolidation effort
