This Washington Post story has New Jersey governor John Corzine threatening small NJ towns with loss of state funds if they do not amalgamate. This type of municipal amalgamation in search of, presumably, economies in the provision of government services, was quite common in Ontario as well.
I always wondered if there was actually any solid evidence on the size of such economies. Technological economies have to be weighed, of course, against the salutary benefits of jurisditional competition for businesses and residents. The only evidence I am aware of is Caroline Hoxby's paper that uses school district size as a proxy for competition among school districts and finds that cities with many small districts have higher average test scores than cities with one or a few large school districts.
There is also the secondary question of why it makes sense to run tax dollars for local services through the state government. I can see having the state hand out, say, sales tax revenues but I do not see the value of having discretionary state handouts as New Jersey apparently does.
Hat tip: yahoo!
Who was my favorite student this term?
7 years ago
