Smaller municipalities not costlier than larger ones, study says

Proponents of municipal consolidation in New Jersey have long argued that fusing small towns together will save taxpayers money, but a study from Rutgers University finds large or small, the cost per capita is the same.

The report is titled "Size May Not Be the Issue: An Analysis of the Cost of Local Government and Municipal Size in New Jersey." It is co-authored by Raphael Caprio, director of the Bloustein Local Government Research Center at the Edward J. Bloustein School of Planning and Public Policy at Rutgers.

"When we extrapolate out resort communities and look at the 500 remaining communities in the state, there is just not a significant difference in the cost per capita between large communities and small ones," Caprio said.

The authors calculated the average cost for municipalities to be between $1,092 and $1,342 per capita, municipalities with populations between 6,000 and 8,000 tending to have the lowest per capita costs.

Caprio said there were few, if any, patterns or correlations to be found among the results.

"You've got rich communities that have a high per capita and you have poor communities that have a high per capita," he said.

The study goes against one of the strongest arguments given by supporters of consolidation: that it will help reduce property taxes.

"The assumption and assertion that by consolidating, you are going to solve the property tax problem, is completely erroneous," Caprio said.

While the merger of Princeton Borough and Princeton Township is often cited as an example of a successful municipal consolidation, Caprio said it's an outlier.

"Their mayor is quoted as saying their municipal rate went down about two cents after consolidation, essentially a 1 percent decrease," Caprio said. "The consolidated municipality did save some money, but at the end of the day, because municipal rates are only a small portion of the total tax bill, the after-consolidation taxes actually went up $4 million because of the impact of the county and school taxes."

Caprio contends consolidation is a good option for communities who feel they would benefit from more municipal efficiency, but it's not a financial cure-all.

"You can achieve modest savings by consolidation, but it is in no way a solution to the property tax issue, and it only works in rare instances," he said.