Combining local units of government may save tax money but doesn't necessarily improve economic development, a new Ball State study shows.
"People argue that city-county government consolidation is likely to have a positive effect on economic development because less bureaucracy and more efficient government," said Dagney Faulk of the Center for Business and Economic Research.
The center released a report Monday showing that local government consolidation has no effect on private employment or the number of business establishments.
Faulk and Eric Schansberg, an economics professor at Indiana University Southeast, studied three examples of government mergers, all occurring in the mid-90s: Augusta-Richmond County in Georgia, Kansas City-Wyandotte in Kansas, and Lafayette City-Lafayette Parish in Louisiana.
The Kansas and Georgia mergers did not result in increased business development. In Louisiana, Lafayette Parish gained new businesses and service employment, but not enough to argue for government mergers, according to the researchers.
Indianapolis and surrounding Marion County combined operations in the early 1970s. Many people have argued for more local government consolidation across the state, saying tax money could be saved by eliminating duplicated services.
Across the country, 38 communities have combined operations to save money, including nine city-county governments since 1990.
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