Budget Cuts Spark Montclair's Urge to Merge

On Tuesday evening, the Town Council kicks off yet another discussion of the budget crisis as it tries one more time to find ways to preserve quality in services while coping with serious cuts in state aid.

One idea that was bandied about at the last council meeting and will likely be bandied about next week, too, is the idea of shared services. Gov. Chris Christie has warned more than once in recent weeks that a constitutional amendment capping property tax increases at 2.5 percent could spark a series of mergers that would decrease the number of local governments. Currently, New Jersey is home to 566 towns and 588 school districts, a high number for such a physically small state.

Even Mayor Jerry Fried has emphasized that the scarcity of state funding calls for a new way of thinking. He said that a team of staff and council members is meeting regularly with other towns, as well as with Essex County officials, to discuss how to consolidate services. "Most of the work is convincing other towns that it's in their best interest to do so," he said.

But do shared services really work to bring down taxpayer costs?

"Shared services is one of the hottest things out there right now," said John Fry, a former municipal administrator and director of the Shared Services Institute at Rutgers University.

A few years ago, almost no one would talk openly of sharing police departments. Now, he said, many towns do. "Shared services has happened a lot more because of all the budget crises and it's going to happen more in the future," Fry said. "The centralization of services is also something you are seeing already and that you're going to be seeing a lot more of."

For example, Gloucester County is implementing a countywide Tax Assessors office that would eliminate the need for individual towns to do their own revaluations and, ultimately, create an assessment system through which every town would be at 100 percent of true assessed value 100 percent of the time. Proponents argue that the program will save county taxpayers an estimated $1.5 million annually. Meanwhile, some in Morris and Somerset counties, too, are looking at centralizing not only tax assessment but also law enforcement.

In Montclair, shared services is not a novel concept either. Already, in 1990, Montclair laid the groundwork for what is today a nearly $1 million agreement to provide fire protection for Glen Ridge as part of a plan to trim expenses. For its part, Glen Ridge has entered into more than a dozen inter-local contracts, making it a trailblazer in the shared-services arena.

However, in the face of state aid cuts, the towns could decide to jointly operate even more services. The idea of sharing police has been considered. Some town officials argue that libraries, too, could be shared. But challenges are abundant. Police unions are loath to give up any of their influence. Many residents, too, don't like even the appearance of ceding control in key areas such as security to another entity.

"It would really make sense to merge some municipalities, but that will probably never happen. The best alternative is shared services," said Councilor Nick Lewis. "One variant of that is where a larger town such as Montclair agrees to provide a service to a smaller town like Glen Ridge for a fee.

"The smaller community is unable to provide the service efficiently. The problem is that communities do not like to give up their 'sovereignty' by allowing a neighboring town to provide police or other services ... and forget about the schools," he said. " It is not a question of finance or what is a logical solution. It is an emotional and political issue."

At the same time, at least some experts argue that sharing services is not likely to do a lot of good for Montclair or anyone else.

Gina Genovese, the former mayor of Long Hill and now the executive director of Courage to Connect NJ, an organization designed to find ways to cut property taxes, said that New Jersey towns have been sharing services for 20 years.

However, she warned, it's not the solution to reducing property taxes.

"In order to do that, five to 10 towns have to come together under one administrative structure," she said. "Two towns are just not enough because there's not enough economies of scale."

Genovese warned that if Montclair and Glen Ridge merged more services, "there will always be one town that is stronger … one town that is the winner and one that is the loser. If you have five or more towns then things tend to be more equal."

Even so, when the New Jersey State League of Municipalities recently asked New Jersey towns what they were doing to cut costs, the most popular solution was by far "shared services." Indeed, towns seem to be sharing whatever they can, everything from municipal courts and animal control to emergency dispatch services and information technology.

Fry said that if towns can't raise property taxes, they'll have little choice but to merge services. The governor is urging the Legislature to place a constitutional amendment on the fall ballot that would limit property tax increases to 2.5 percent a year. The current limit of 4 percent is statutory but not constitutional.

For example, Woolwich Township has entered into a shared services agreement with the Borough of Swedesboro through which Woolwich provides police services for both towns. Woolwich Administrator Jane DiBella said the merger has saved money and been beneficial to both municipalities, which also share fire services, parks and recreation, and code enforcement services.

But at least some towns are moving cautiously. In May, Boonton Township decided against merging police forces with Mountain Lakes, worried that hidden costs such as excessive overtime might result.

Ironically, Fry pointed out, towns may be stymied in their efforts in the future by the very same governor who has encouraged more consolidation. Indeed, the governor's austerity budget took away the funding and financial incentives the state previously had given to towns studying and seeking shared-services agreements.