Maine Municipal begs to differ

by Geoff Herman

The newspaper’s editorial of May 31 (“Maine’s towns at crossroads”) began by noting how the just-adopted two-year state budget slashes state financial support for public education and various property tax relief programs. The total cut is an unprecedented $140 million over the two-year cycle.

Without referencing any facts to support the claim, the Kennebec Journal asserts that municipal spending is too high because municipalities continue to “insist on expensive local control.” It concludes that by cutting property tax relief programs and state aid to education, lawmakers “may just have done the one thing that will get Maine’s municipalities in line,” and that our lawmakers should perhaps “pat themselves vigorously on the back” for bringing municipal overspending under control.

It’s an old trial lawyer’s trick. When you can’t show that something is actually true, you just slip the claim into the record in order to substantiate another point, as though “the fact” of municipal extravagance was somehow previously proven. Then you pray that the opposing counsel doesn’t object for “lack of foundation.”

The baseless, anti-municipal editorializing by the newspaper has gotten tiresome. Six months ago, the editorial board took similar shots at local government without referencing a single study, analysis or review of municipal spending. We responded at that time with some real data:

* Research done in 2005 by the Federal Reserve Bank of Boston found that Maine has a very “lean” public sector workforce at the local level compared to national standards.

* Independent background research conducted by a University of Maine professor for the 2006 Brookings Report found that having many municipalities in Maine does not correlate to high local costs and that in many functional areas Maine’s municipalities spend less than our peers.

* A 2008 analysis published by the conservative Maine Heritage Policy Center concluded that local government spending as a percent of income in Maine ranks 41st of all the states in the nation, and that is even when state financial support for K-12 education is identified as “local spending.”

In reference to the editorial’s implicit suggestion that increased consolidation would help “bring the municipalities into line”:

The Atlantic Institute for Market Studies (AIMS) recently published an address given by its president, Brian Lee Crowley (www.AIMS.ca//media/aims/MunicipalGovernment.pdf). The subject of the talk was a review of the “amalgamation” of four municipalities in Nova Scotia. Crowley criticized a common failure to engage in “evidence-based policymaking” and noted that a substantial amount of literature on the subject of local government consolidation leads to three conclusions (directly excerpted).

1. “Local government is not merely a device for supplying municipal services, but also for finding out what services people want and how much they are prepared to pay for them. The smaller the government unit, the better they are at discovering this, because the evidence is very strong that local government is closest to the people.”

2. “The evidence is quite strong that creating single-tier local government monopolies doesn’t reduce costs — it increases them. It levels costs up to the highest common denominator in the pre-existing units, and seems to result in higher trends of cost growth over time. This is especially true where amalgamation has eliminated competition between pre-existing municipalities both in terms of attracting residents and industry and in terms of tax and service levels.”

3. “It is a fairly small part of public services where there are significant “returns to scale” — in other words, where the bigger you are, the cheaper it is to produce a unit of a given service. Researchers seem to broadly agree that roughly 80 percent of municipal services enjoy no economies of scale. The evidence says pretty unambiguously that the lowest observable level of per unit costs for most services are compatible with very small municipal units (on the order of 5,000 to 10,000 residents). Moreover, there are significant dis-economies of scale beyond relatively small population numbers.”

Although the newspaper may have little interest in further exploring the data to which Crowley is referring, those readers who want to engage in “evidence-based policy making,” can find the information at the Web site: www.aims.ca/acedoc.