Tuesday, May 10, 2011

Remarks at Warren County Shared Services Seminar

Thank you Freeholder Sarnoski, for having me here in Warren County on this the most important day of the year for New Jersey tax payers.  Today is Tax Freedom Day the day where all of us in New Jersey stop working for the government and start working for ourselves. As Ronald Reagan used to say, a taxpayer is someone who works for the government but doesn’t have to take the civil service exam.
Most of us are familiar with the parable of the boiled frog the notion that a frog when thrown into a boiling pot of water will leap out to safety but if placed in a warm pot and slowly brought to a boil, will allow itself to be cooked. This is very analogous to how we deliver, and more importantly pay for local government services in New Jersey.  Certainly, no one 10 years ago would wake up one morning and find themselves paying what we now pay for schools, municipal and county services and not demand an immediate fix.  Yet, slowly but surely, like a pot boiling, property taxes in Hunterdon has risen 64% from an average of $4,930 in 2000 to $8,091 in 2010 (APP).
There are 5 drivers of property taxes in our state:
·        Reliance on property taxes as the main tax to fund local government instead of sales or income taxes Regressive tax
·        Volume of school districts and municipalities and the duplication of functions
·        Sprawl
·        The Supreme Court of the State of New Jersey
·        Legacy costs
Most of these problems are out of our hands and many of these would yield very large savings, but that does not free us as elected officials in local government from doing our part.  
The solutions at the disposal of local officials consist of four (4) areas shared services, regionalization, reallocation from municipalities to the county, and consolidation. Shared services was invented in 2005 by Governor Jon Corzine when he cut aid to municipalities with less than 10,000 and less than 5,000 people disproportionately to larger towns.  Not really, of course shared services were around for many, many years.  It worked because it didn’t involve the state or frankly politicians in general.  One DPW manager would ask his neighboring DPW manager if he could borrow a cherry picker or track hoe.  Towns shared with each other because that is what neighbors do. Governor Corzine formalized the effort in 2005 with Share Grants to facilitate and encourage more of this.  It led to more contracts or shared service agreements and in many ways shifted the onus of property tax reform, at least politicially, from the state to towns and schools.
Regionalization is multiple towns or school consolidating areas of services into a single entity or authority.  Shared or joints courts and regional high schools being the most common of these.  It brings the advantages of greater economies of scale while preserving local control or “home rule.”  
Reallocation is the moving of a local government function from municipalities to the county.  We have seen this done with county wide dispatch.  In Somerset County, they are working on a police study for county wide police that will save 15% if fully enacted.  In Gloucester County, they are doing county wide tax assessment saving more than 50%.  I have studied both of these and can answer any questions you may have on these efforts.
The most extreme is consolidation.  We hosted a seminar last month on municipal consolidation in Hunterdon and half a dozen Mayors’ and local official were openly talking about doing the studies that is the first step to consolidating towns.
What we are doing in Hunterdon is taking these issues head on.  We have created a small Shared Services working group that has as its mission:
Is to facilitate local officials, municipal, school and county, in Hunterdon in a thorough exploration of all opportunities for sharing, regionalizing, reassignment or consolidating of governmental functions to ensure that essential services are provided to the public in the most efficient and effective manor and at the lowest cost to the taxpayer. We recognize the following two undisputed challenges must be addressed:
·        New Jersey has the highest property taxes in the nation.
·        The 2% Property Tax Cap
As elected County, Municipal and School officials, it is our obligation to fully explore all options to meet these significant challenges. In these difficult financial times, this must be our top priority. To support this, the Shared Services Working Group is committed to assisting elected officials and the public by: Gathering all the data about municipal operations and spending along with related information to support innovation and collaboration on the mission. Sharing this information in a public forum via a website and through seminars to focus attention on the challenges; surface potential solutions; recognize past and current actions that demonstrate innovation and commitment to the mission. Initiating and supporting action to make steady progress toward the mission.
We have held three seminars on shared services.  The first was fire, police and EMS.  We have seen action on sharing police and movement toward regional police forces.  The northern EMT squads have made an effort to organize in a regional group for many of their activities.  Several fire companies have changed their daytime response protocols following our meeting.
We brought all of the schools together and several school boards to talk about what they are doing to share superintendants three of our schools who all go to the same regional school district told of their effort to create a K-12 district.  I am sorry to report that beyond those schools that spoke that evening none have made any movement toward more sharing or regionalization. But I am proud to report that a question to consolidate 3 schools into one K-12 Passed in all 3 towns even while the regional high school overall budget failed.
The only progress from our last seminar on municipal consolidation is that the conversation regarding consolidation changed from never to we need to give this serious consideration.  I am trying to get as many local officials as I can to jointly agree to at least study this.  
One tool we created to study the issue of local government spending is the Hunterdon Municipal Database. (Show and explain the database)
When I talk to people about saving money in local government I often get the same story.  From firefighters and EMT's, I get were volunteers, public works, that’s where the money is.  DPW guys tell me they are cheap, look at Police, Police will say the money is in the schools, look at your tax bill, Boards of Education members tell me, it’s not our fault, it’s the state and Abbot funding.  Folks in state government tell me were better off than the federal government and on and on.  I contend that each of us must do our part in our own sphere to improve the lives of our residents.
Change is constant and inevitable.  What works today will more than likely not work tomorrow.  Don’t mistake this as a call to change our principles.  It is about applying core principles to today’s conditions.  Do we want to be the ones who drive change or the ones who are taken along for the ride?  We need to adopt our thinking to address the current dynamics and with new thinking comes renewed action.  
Change is painful, but I argue that failing to change is far more painful. Will you look back 10 years from now and wish you had made changes, or will you look back and be thankful for having made the painful choices that in the long run were better for your communities.  If you could go back ten years, what would you have done differently so you would be in a different place today?
The offices of Freeholders and Mayors, Council and Committeepersons lack the prominence to bend history itself, but each of us can work together and change a small portion of events, and in the total of all those acts you can write the history you’re County and your generation. 

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