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A study recently completed for the Ohio Association of Townships refutes the notion that a consolidation of local governments into a single, larger entity creates efficiencies.

The report, written by Wendell Cox, of, Demographia, a St. Louis urban policy firm , concluded that, in nearly every population category, townships have expenditures significantly less than municipal governments on a per capita basis. He also states that on the same basis township residents are taxed less and that townships have lower long-term debt than municipal governments of a similar size.

As an example, townships with a population of 25,000 to 49,999, have expenditures on a per capita basis which are 55 percent lower than municipalities, the report states.

Heidi Fought, executive director of the township association, said the report has been sent to members of the state legislature and will be used as a resource whenever the idea of consolidation or annexation is brought up.

Ms. Fought said one of the reasons for financial caution in townships is the different methods of funding the two types of governments.
“Incorporated cities and villages get the bulk of their income from individual and corporate income taxes. For the most part, she continued, townships have to ask voters to continue or increase real estate tax levies for specific purposes.

“If people don’t think they’re getting good service from the fire department they may not continue a levy. They sure won’t increase it,” she said.

In his report, Mr. Cox noted that when governments combine, the consolidated workforce tends to be paid at whichever group had the higher pay scale. Services also rise to the higher level between the two formerly separate agencies.

He also noted that because the voter base of the new jurisdiction has been increased, voter influence, “is diluted in larger jurisdictions.” Because of that, he wrote, special interests can gain greater influence in favoring more spending.

His report also noted that township residents are taxed at a lower rate than residents in municipalities of a similar size.

Again, in the population range of 25,000 to 49,999, township median taxation per capita is 46 percent lower than in municipalities.

Likewise, long-term debt for townships in that population group is 68 percent less than in municipalities in the same category.

Mr.  Cox wrote that “townships spend, tax, and borrow at less than one-half the rate of similar sized municipalities.

This is a powerful indication that the notion to abolish townships or force their consolidation with other governments would lead to materially higher spending, taxation and debt.”

 

Written by:  Mike Jones, Public Information Officer

Published Date:  May 21, 2020

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