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New Jersey governor wants 'czar' to encourage towns to share services

Gov. Murphy said he will appoint a "shared services czar" to lead New Jersey's effort to encourage municipalities to collaborate. He says it's a way to lower the state's high property tax rates, but state and local officials agree shared services are no magic bullet.

New Jersey Gov. Phil Murphy in a January 2018 photo prior to signing his first executive order.
New Jersey Gov. Phil Murphy in a January 2018 photo prior to signing his first executive order.Read moreJULIO CORTEZ

Among Gov. Murphy's calls for tax increases and more spending for schools, transportation and pensions in his first budget address, he invoked a concept aimed at making local governments more efficient in a state with the nation's highest property tax rate: sharing services.

With towns across the country squeezing dollars, more officials have pushed the idea, but Murphy's proposal had a novel element: He said he would appoint a shared-services "czar" to oversee New Jersey's effort to encourage its 565 municipalities to collaborate.

Typically, the impetus for sharing — for example, police, equipment and personnel — comes from the towns themselves, said Brooks Rainwater, an official with the National League of Cities. He said he is unaware of a governor appointing one person at the state level to lead such efforts.

Murphy has not yet announced whom he will appoint, or when.

For more than a decade, state and local officials have debated the merits of shared services, along with consolidation. But sharing is not a cost-cutting silver bullet for local governments, said legislators and municipal officials.

"It's certainly worth exploring and doing," said Paul Medany, mayor of Deptford, who organizes annual shared services meetings. "It's certainly not the godsend to the property tax problem in the state of New Jersey."

Neighboring New York, whose residents also are burdened with high property taxes, last year started requiring county officials to convene "shared services panels" with municipal leaders to develop plans with new ways of saving tax dollars. The plans must include estimated property tax savings, and towns could be eligible for a onetime state match of their savings.

Pennsylvania, which has 2,560 municipalities, offers grants to help local governments that want to collaborate. State officials say encouraging the practice is a priority.

Sharing is hardly a new concept in the Garden State: Local governments have been working together, whether through hundreds of formal or "neighborly" agreements. "People just assume that because there are so many municipalities in New Jersey, it's just obvious that they should be sharing services," said Michael Darcy, executive director of the New Jersey State League of Municipalities. "They're doing that already, so it can't be that one solution."

The governor called shared services an example of "doing things smarter and more efficiently" in his budget address on March 13. The state's Department of Community Affairs currently fields requests from municipalities wanting guidance to collaborate with their neighbors in areas such as code enforcement, bulk purchasing, information technology, public safety, and public works. The department said the shared-services czar will aim to make those collaborations easier.

This month in Deptford, Medany met with council members, school district officials and the Board of Fire Commissioners to discuss ideas. Township and fire officials learned that the school district pays less for a costly, ubiquitous item: paper.

The officials agreed to explore using the school district's vendor.

The township also has been replacing aging decorative and chain-link fences and has agreed to put up a fence, under the township's contract, for a school that borders the municipal building. The township's Municipal Utilities Authority rents out a $350,000 truck to smaller neighbors that can't afford it, Medany said.

"They're not tens of thousands worth of savings, but they add up," he said.

Senate President Stephen Sweeney (D., Gloucester) calls himself a "big believer" in shared services, which, in certain circumstances, can offer residents better services for less cost, he said. He said he supports the governor's call for a new position to lead the effort, as long as that person has enough power to push municipalities to get on board.

For eight years, Sweeney has introduced legislation aimed at expanding shared services. The current bill includes penalties for local governments that refuse to consider collaboration. The state would withhold aid.

"I know how this works," Sweeney said. "Without pushing it, [municipalities] don't do it. And that's a fact."

The National League of Cities and local officials across New Jersey oppose mandates from the state, saying local governments have a better understanding of what their communities need.

"I get all that, but we can't afford the government we have anymore," Sweeney said.

Rainwater, who is director of the league of cities' Center for City Solutions, said sharing doesn't always work.

He said that, sometimes, such agreements can save money. "Other times, frankly, you end up dissipating resources that would otherwise need to be utilized in a community," Rainwater said.

In New York, the County-Wide Shared Services Initiative law enacted in 2017 was years in the making, and has yielded benefits, according to the Rockefeller Institute of Government, a public policy think tank. It found that the initiative "has yielded taxpayer savings, efficiencies, and better coordination among local governments across the state. More important, the state law created an infrastructure for better coordination and cooperation among local governments."

But not everyone is on board.

"Some [counties] appreciated the state forcing this discussion," said Mark LaVigne, deputy director of the New York State Association of Counties, "and others were saying, 'We already work with our municipalities, so we don't need the state to tell us what to do.' "