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City-County Consolidation in St. Louis: an Analysis

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City-County Consolidation in St. Louis: an Analysis Missouri Policy Journal | Number 8 (Spring/Summer 2019) | 35 City-County Consolidation in St. Louis: An Analysis United States over the past fifty years. These consol- Joshua Hall, PhD idation attempts, and the findings of the scholars that West Virginia University have studied them, can give policymakers some in- Josh Matti, PhD Candidate sight into opportunities for improvement in regional governance and potential pitfalls to avoid. As authors West Virginia University of two recent papers on city-county consolidation, we employ our understanding of the literature, combined 1. Introduction with our own original research, to provide citizens and policymakers of St. Louis County with insights The county of St. Louis is one of the most politically and lessons from the academic literature on city- fragmented in the United States. According to Better county consolidation. Together,1 a group in favor of municipal reform in St. Louis County, the county contains ninety municipal We proceed as follows. We begin by summarizing the governments, fifty-seven police departments, eighty- theoretical arguments in favor of consolidation in one municipal courts, and forty-three fire districts. Section 2, followed by the theoretical arguments This political fragmentation has been argued to lead against consolidation in Section 3. Where possible we to a number of problems, including wasteful compe- try to link discussion from the academic literature to tition among local governments, inefficient duplica- arguments made regarding the situation in St. Louis. tion of services, an inability to coordinate efforts Section 4 discusses the empirical literature on city- geared towards regional growth, and a disparity in county consolidation. In Section 5 we provide five services across the county. Many of these complaints lessons for citizens and policymakers in St. Louis regarding the consequences of political fragmentation drawn from our reading of the relevant research. Sec- in St. Louis County are not unique to Missouri, and tion 6 provides some closing comments. the problems of excessive political fragmentation 2. Theoretical Arguments have been discussed in the academic literature for in Favor of Consolidation nearly a hundred years.2 The United States traditionally has had a fragmented In this paper, we aim to bring a discussion of the system of government. Currently, there are nearly scholarly literature to the debate surrounding local 90,000 separate governmental units in the United governance in St. Louis County. In particular, we fo- States.4 With one federal government and fifty state cus our attention on city-county consolidation. We do governments, the fragmentation of governments oc- so for two reasons. First, much of the discussion of curs at the local level. Local political units are divided reform in St. Louis has focused on city-county con- into counties, municipalities, townships, school dis- solidation.3 Second, city-county consolidation has tricts, and other special districts that serve a specific been a major push in many metropolitan areas of the Joshua Hall is a Professor of Economics, Department of Eco- 2 Chester C. Maxey, “The Political Integration of Metropolitan nomics, at West Virginia University. Communities,” National Municipal Review 11, no. 8 (1922): Josh Matti is a PhD Candidate in Economics at West Virginia 229-254. University. He is an Assistant Professor of Economics at Geor- 3 Shayndi Raice, “Campaign Asks if St. Louis Area Really gia Gwinnett College. Needs 91 Local Governments,” Wall Street Journal, November Funding for this study was made possible by the Hammond In- 2, 2017. stitute’s Center for Economics and the Environment, Linden- 4 US Census Bureau, Census of Governments (Washington, wood University. DC: Government Printing Office, 2012); I. Vojnovic, “The 1 Better Together, “The Will To Change,” accessed July 2, Transitional Impacts of Municipal Consolidations,” Journal of 2018, http://www.bettertogetherstl.com/studies/will-to-change. Urban Affairs 22, no. 4 (2000): 385-417. 36 | Missouri Policy Journal | Number 8 (Spring/Summer 2019) function, such as police districts. Over the last hun- Another theoretical reason for economies of scale dred years, there has been an increasing push to con- with larger governments comes from spreading the solidate local governments. Policymakers and local fixed costs of government programs across more peo- activists have steadily reduced the fragmentation of ple.6 Services such as power and public transportation local government through consolidation efforts. Con- are capital intensive and require a large initial invest- current with the real-world changes in local govern- ment. But once built the marginal cost of adding an ment, a body of scholarship in support of consolida- additional user is low. Thus, in smaller governments tion has emerged. Although studied by scholars each citizen will bear a higher fraction of the large across different decades and in different local con- fixed costs of capital intensive services. Their tax bill texts, their arguments in favor of consolidation tend will be higher to cover the cost, or the capital inten- to fall into four categories: efficiency, equity, spillo- sive service will simply not be provided. In a larger vers, and development. This section explores each of government, however, the high fixed costs of capital these four theoretical arguments in favor of consoli- intensive services can be spread across a larger num- dation and draws connections between the theory and ber of people. Thus, each citizen’s tax bill is lower. the specific context of St. Louis. A third way large governments achieve economies of 2.1 Efficiency scale is through removing administrative duplica- tion.7 For example, two small municipalities likely Scholars in favor of consolidation contend that simple have the same administrative structure and types of systems of government are more efficient. A frag- administrative employees: Each municipality is likely mented system of government with overlapping juris- to have its own public works department, zoning dictions is not a simple system. It is complex, and its commission, courts system, etc. Such duplication can complexity can lead to inefficiency. In terms of gov- be wasteful. Rather than duplicated administrative ernment, inefficiency leads to higher costs and poor structures and employees, a consolidated government service provision. Scholars in favor of consolidation can cut operating costs through a single administra- identify several ways in which larger governments tive system with a streamlined number of employees. operate more efficiently. The second efficiency argument for consolidation re- First, larger government can achieve economies of lated to economies of scale is economies of scope. scale. Just as a larger factory can lead to lower aver- Economies of scale are achieved through lower aver- age costs in the private sector, a larger government age costs when providing a larger quantity of a single can theoretically lower average costs of producing service. Economies of scope come from the cost of goods and services in the public sector. With econo- providing a diversified set of services within a single mies of scale, larger governments can provide ser- government being less than the cost of several spe- vices at a lower per unit cost. A related, but different cialized governments providing the same services.8 mechanism can occur through bulk purchasing. A For example, rather than separate dispatch centers for larger organization can reduce costs because of police and fire departments, a unified dispatch center 5 greater purchasing power. The principle is simple: for police and fire departments would be more effi- Sam’s Club is cheaper than Walmart. Just as buying cient. in bulk saves money for households, buying in bulk can lead to lower costs for governments, the savings The third efficiency argument for consolidation of which can be passed along to taxpayers. comes from a careful study of what the nature of frag- mented government in the United States is like. Of the approximately 90,000 governments in the United 5 George A. Boyne, “Local Government Structure and Perfor- 7 Robert F Adams, “On the Variation in the Consumption of mance: Lessons from America?” Public Administration 70, no. Public Services,” Review of Economics and Statistics 47, no. 4 3 (1992): 333-357. (1965): 400-405. 6 Elinor Ostrom, “Metropolitan Reform: Propositions Derived 8 Shawna Grosskopf and Suthathip Yaisawarng, “Economies of from Two Traditions,” Social Science Quarterly 53, no. 3 Scope in the Provision of Local Public Services,” National Tax (1972): 474-493. Journal 43, no. 1 (1990): 61-74. Missouri Policy Journal | Number 8 (Spring/Summer 2019) | 37 States, over half are school districts or other types of from a plethora of special districts, however. Con- special districts.9 Special districts are designed to sider the case of citizens living in an area where the achieve efficiency through their focus on providing a public utility company is inefficient. Moving because single service, such as fire, police, public utilities, and of one poorly provided service is unlikely, especially housing authorities. Although special districts could if other special districts, such as a school district, po- be efficient, special districts can be controlled by spe- lice department, and fire department, operate effi- cial interest groups. With a focus on a single issue, ciently. With less of a threat of moving, special dis- special districts tend to be less politically visible, al- tricts face less competition, and the lack of competi- lowing groups with a vested interest in a specific issue tion can erode efficiency. to exert greater influence.10 For example, teachers are more than twice as likely to vote in school district Efficiency arguments for consolidation have been elections as other registered voters.11 Special interest prominent among scholars over the last hundred influence erodes efficiency as policy is shaped to suit years. Efficiency also has been part of the debate over special interest rather than the more general public in- St. Louis city-county consolidation.
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