The Quest for Cost-Efficient Local Government in New England: What Role for Regional Consolidation?

New England Public Policy Center Research Report No. 13-1

44 Pages Posted: 12 Dec 2013

See all articles by Yolanda K. Kodrzycki

Yolanda K. Kodrzycki

Federal Reserve Bank of Boston - Research Department

Date Written: February 14, 2013

Abstract

In the aftermath of the Great Recession, many local governments have experienced significant financial strain. Local governments’ financial challenges are likely to continue in the foreseeable future, as federal deficit-reducing measures trigger cuts in state and local aid and as all levels of government struggle to fund their medical and retirement obligations. In an effort to maintain service provision without significant tax increases, many cities and towns will be forced to consider a variety of cost-cutting measures, including joint service provision with other localities. This research examines the potential long term savings that could be realized through greater regional consolidation of select local government services, specifically emergency call handling and dispatch, public health, and high-level government administrative services. It focuses especially on the expected long term savings in the New England states, with specific estimates for Massachusetts and Connecticut. The report finds that regional service-sharing can be an effective means to achieve savings, particularly for services that rely on high levels of technology, capital, or specialized expertise. The author recommends that the state consider playing a stronger role in encouraging local regionalization through measures such as instituting quality standards and using funding to promote and facilitate consolidation.

JEL Classification: H11, H70, H80

Suggested Citation

Kodrzycki, Yolanda K., The Quest for Cost-Efficient Local Government in New England: What Role for Regional Consolidation? (February 14, 2013). New England Public Policy Center Research Report No. 13-1, Available at SSRN: https://ssrn.com/abstract=2366556 or http://dx.doi.org/10.2139/ssrn.2366556

Yolanda K. Kodrzycki (Contact Author)

Federal Reserve Bank of Boston - Research Department ( email )

600 Atlantic Avenue
Boston, MA 02210
United States
617-973-3809 (Phone)

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