Search

Saturday, December 15th, 2007

An Examination of City-County Consolidation

H. V. Savitch and Ronald K. Vogel of the University of Louisville wrote an article called “Suburbs Without a City“, analyzing the merger of Louisville and Jefferson County, and in the process making many good observations about or relevant to other consolidated cities like Indianapolis and Nashville.

Savitch and Vogel make the argument that the primary goal and pratical effect of merger was to re-align power relationships to put the levers of power in the hands of the business, political, and media elite. Among the changes leading to this were:

  • A strong mayor, weak council system.
  • Dissolution of the city of Louisville while retaining smaller suburb cities
  • Dilution of the voting power of minorities
  • A transfer of the locus of political power from the old central city to suburban Jefferson County

In their words, “Reformers frequently support consolidation because they assume rather than make an effort to prove its benefit…changes in local governance are often about power not bureaucratic efficiency or effectiveness. More often than not, power shapes the reception of ideas and determines who has voice in community debates. Bringing this to public attention is difficult, and elites often respond with hostility to attempts to distinguish between power and better government.” Rather than a Ruskian city without suburbs, they believe Lousville has become suburbs without a city.

They also make the argument that merger has not and will not improve efficiency or result in cost or tax savings. It is also explicitly non-redistributionist in that wealthier areas are firewalled off from having to support the less well off areas, and in fact if anything the reverse is true.

All of these features are, in so many words, said to have been imported from Indianapolis’ Unigov. I believe there is some degree of parallel between these mergers, so the experience of Indianapolis under merger is something that bears examining. You can view the structure of the Louisville Metro government online.

In 1969 a unique political alignment put Indianapolis and Indiana under the unified control of Republicans. The Mayor Richard Lugar was able to push through a legislative city-county consolidation called Unigov. Key features of Unigov:

  • A county-wide mayor, with a combined 29 member city-county council
  • Administration, planning and zoning, parks, and infrastructure development were consolidated
  • School districts, police departments, and fire departments were not consolidated. Subsequently, police departments were merged.
  • Cities and large towns (four total) were excluded from merger, but still allowed to vote for mayor. Smaller towns were semi-included in merger, but remained legal entities and retained some powers.
  • Townships were unaffected, as were all special purpose districts.

As you can see, this was in a sense a merger in name only. Many of the most important government services were not merged.

Louisville’s merger followed a similar script, with some updating.

  • A county-wide mayor with 26 council members
  • Administration, planning and zoning, parks, and infrastructure merged
  • Police and fire departments of city and county merged
  • All other incorporated municipalities excluded, including 83 incorporated towns and 19 suburban fire departments.
  • Schools were previously consolidated in the 1970′s and so were unaffected
  • Special districts unaffected
  • An “urban service district” established to provide for higher taxes in the old city limits to pay for services only delivered there.

As you can see, this is broadly similar, with a lower degree of consolidation of municipalities, but a higher degree of departmental consolidation.

As in Indianapolis, the population of the outlying county had grown to be larger than that of the old city. Thus, merger transferred the balance of political power from the “city” to the “suburbs”. In Indianapolis, this led to nearly three decades of Republican dominance, and the political marginalization of minorities. The old city of Indianapolis effectively ceased to exist as a political force, outside of downtown interests. The authors suggest a similar fate awaits Louisville, saying “the city’s autonomy, its power, and its unique qualities have been homogenized into a larger entity.”

In the case of Lousville, there was a strong desire to consolidate power into a strong-mayor. Jerry Abramson went to work for a law firm after leaving office the first go-round. It was his law firm that was the primary backer of merger. A partner in this firm actually drafted the enabling legislation. In a sense, he wrote his own job description for his comeback. This reinforces elite control over the government because of the large amounts of money needed to effectively campaign for office in the consolidated city.

Also, a large city government is so complex and difficult to manage that even an outsider would be dependent on the entrenched power structures to do anything, and so would end up co-opted. We see this happening right before our eyes in Indianapolis. Outsider Greg Ballard was elected mayor in a stunning upset. Now we hear the shrieks of outrage as he turns to establishment Republicans on his transition team. But fundamentally, he has no other option. There are literally hundreds of appointments that the mayor has to make, and as a lone outsider without a posse to bring along with him that has the experience necessary to do the jobs, he has to turn to establishment players. The large size of the city council also makes it difficult for individual reformers to make a difference. This sort of thing is exactly why no one has ever reformed Washington and no one ever will.

I won’t go into the details of the case for saying merger was to entrench the power of the elites. Read the article for yourself. While they don’t actually say so, it is clear that authors do not much care for merger and especially this aspect of it. Indeed, the term “elites” itself is pejorative and indicates their point of view. They dismiss merger as not the driver of above trend growth in Indianapolis and Nashville, and also suggest that the City-County Compact could have served indefinitely in place of merger.

I agree that merger in both Indy and Louisville was primarily designed to rewrite the power map. I tend to agree that merger in both Indy and Louisville had a tendency to reinforce the power of the elites. But that is a sort of secondary impact. Rather, I believe the most important thing merger did in both places was to make sure that all the elites were together in the same boat. This aligns their personal interests and makes it much less likely that there would be infighting in the upper classes. It is this lack of infighting itself as much as anything that leads to the dramatic increase in the elite’s power.

What is the practical effect of this? Is it good or bad? As with anything, there are pluses and minuses. On the positive front, it has really enabled the leadership of Indianapolis to rally around key decisions and ambitions. This cannot be underestimated as a source of strength in that community. When dreams of downtown retail appeared dead, and several blocks just empty holes in the ground, Indy was able to rally behind completion of the Circle Centre Mall. Look at the comparative ease with which Indianapolis built first Conseco Fieldhouse and next Lucas Oil Stadium. You can pretty much bet that any major civic project in Indy is going to get done, and at a minimum will not be torpedoed squabbles amongst civic leaders.

The downside is just the flip side. There is little serious scrutiny of any proposal as once a decision is made, community leaders close ranks behind it. The result has been a generally lower quality of project than in places with a more robust tradition of civic debate.

The contrast with Louisville could not be more telling. Louisville has long been a city characterized by high levels of mistrust and bickering. In many ways, they were the gang that couldn’t shoot straight. I have always said that in Indianapolis nothing gets criticized by the establishment, no matter how bad it is, whereas in Louisville everything is subject to intense bickering, no matter how good.

The situation there now seems to have reversed itself and is more closely following the Indianapolis model. After seemingly decades of debate over building a new downtown basketball arena, one is finally breaking ground. There has been a veritable flurry of new downtown development, much of it by the connected and receiving huge amount of tax subsidies. I don’t think it is any accident that the use of TIF districts skyrocketed after merger. This has really jump started downtown development. I do not believe most of these projects would have happened without merger.

Thus far, quality has only suffered at the margins. The arena has a poor design and an inflated price tag, for example. But projects like Museum Plaza [now apparently dead] are first class. When elites dominate a political structure, as with an aristocracy, the focus of civic virtue is on the character of the rulers. In that regard, Jerry Abramson is more in tune with quality of development than Bart Peterson, to whom doing the deal seems his passion. When Abramson finally moves on, we’ll see what happens in Louisville.

On the matter of governmental efficiency, I have long been a skeptic that consolidation brings the cost savings touted by proponents. If that were the case, federal government services would be a paragon of efficiency. The larger the bureaucracy, the less efficient it usually is in my experience. This is true not only from a cost perspective, but a speed one. How often do we observe in a corporation or other entity that good decision making is very difficult, and that even good, motivated people are ineffective at making things happen. Smaller, more entrepreneurial companies are famously more nimble and responsive.

This is something that should be kept in mind as Indiana looks to reorganize local government in an attempt to rein in property taxes. While I am a big supporter of abolishing townships, I don’t believe that this will, by itself, result in material cost savings to the taxpayer.

The last point, regarding the anti-redistributionist nature of merger, is one worth noting. While political power is redistributed away from central city residents, especially minorities, in a merger, redistribution of resources from well-off suburban areas to less well-off inner city areas is not done. In fact, there are explicit steps generally taken to make sure this doesn’t happen, and if anything the flow goes the other direction.

Unigov retained the township structure where services such as poor relief that benefit largely inner city residents are not contributed to by suburbanites. Similarly, the inner city school district was left intact. People inside the pre-Unigov city limits paid for the Indianapolis Police Department, but people outside did not. However, everyone in the city paid for the Sheriff’s Department, which only patrolled suburban areas. The consolidated services are those like infrastructure, where the balance of spending will be to the suburbanized areas. If anything, Unigov forced poorer, inner city residents to subsidize the suburbanites in the outlying townships.

Nashville included a similar two-tier structure with an “urban service district” paid for only by central city residents. And Louisville has taken a page from the same playbook. The old city of Louisville is to be designated an urban service district where only taxes raised from that district will provide certain city services. Well-off suburban enclaves such as Prospect were excluded from merger, and can vote to provide premium services for themselves without regard as to equity elsewhere in the county.

To me the most interesting case is downtown development. Major civic attractions such as sports teams, etc. that benefit the entire county or region are located there. Yet much of the freight for paying for these community wide assets falls on the residents of the old inner city only. How is that?

One of the main vehicles for doing this is through Tax Increment Financing or TIF. Those who read my blog know I am generally skeptical of TIF’s, though think they can be useful in certain circumstances. When a certain area is declared a TIF, the current tax revenue is frozen for a long time, often 20+ years. All new taxes from new development in the district goes into special TIF fund. The money in this TIF fund is spent for the benefit of the district. Usually it is pledged for debt repayment on bonds that are issued up front to subsidize a big project in the TIF.

TIF’s hurt the central city because they take valueable property off the general tax rolls there. Let’s take a hypothetical example. An urban service district provides garbage collection paid for solely by central city taxpayers, funded by property taxes. TIF’s freeze the level of taxes collected in part of that taxing district for years and years. This means residents outside the TIF’s have to pay more to cover increased costs of services over time. TIF proponents argue that no development would have occured without the TIF bond, and while that might be true in certain blighted areas, it most certainly is not true in major downtowns.

Indianapolis is a heavy user of TIF’s downtown. Louisville had typically avoided them, and TIF laws are stricter in Kentucky than in Indiana. But since merger, Louisville has gone on a TIF orgy. It has TIF’d much if not most of downtown to support the arena, the Haymarket District, the City Center project, and Museum Plaza. I don’t think it is any accident that Louisville’s appetite for downtown TIF’s has only manifested recently in the wake of merger.

There is one aspect of Louisville’s merger that is very different from Indianapolis and very troubling to boot. Not only did every municipality other than Louisville remain intact during the merger, after a 12 year moratorium, they will be free to annex. Conceivably they could even annex territory inside the old city of Louisville itself. As the authors note, “In theory and in practice, small cities can annex parts of the former city of Lousiville. This raises some disturbing questions. First, if the former city of Louisville is supposedly protected by ‘local consolidated government’, how can parts of it be annexed? Second, what is to prevent smaller municipalities from combining with more affluent neighborhoods of the city and cutting it up? Last, would not annexation result in cherry picking parts of the city and shedding its least desirable neighborhoods to a much larger and impersonal megastructure?”

In effect, merger in Louisville meant the dissolution of the city of Louisville combined with a reoganization of county government. This is in marked contrast to Indianapolis, where most small cities were, for practical purposes, subsumed into the new consolidated city, and where all future annexations in Marion County are forbidden because the entire county outside of the excluded cities is considered part of the incorporated city of Indianapolis.

I don’t agree with everything the authors write. Nevertheless, this is a great paper with a lot of points to ponder and I would consider it required reading for anyone interested in the rationale for and consequences of merger.

6 Comments
Topics: Public Policy, Regionalism
Cities: Indianapolis, Louisville, Nashville

6 Responses to “An Examination of City-County Consolidation”

  1. NDG says:

    An excellent article Urban. I am curious as to how much of a population loss the cities of Louisville and Nashville have experienced in their respective “old city limts”. It appears that in nearly evry single case of city-county consolidation government that the “old city” population shrinks enormously prior to and following consolidation. For lack of a better word, it’s called White Flight.
    The “old city limits” of Indianapolis are today defined by the current boundary of the Indianapolis School District. Since just prior to and following their Unigov, Indianapolis has lost a total of over 160,000 residents who fled the “old city limits” of Indianapolis to the suburbs.
    Did Nashville and Louisville experience this same massive population from their “old city limits” as well? My feeling is that they did. Those people in our 9 donuts counties surrounding Marion County had to come from some place.
    The one thing that was missing from your article was how the issue of race affected each of these cities but it’s not hard to read between the lines. Race has and still remains a huge issue in Marion County. Minorities and the poor are often the ones that remain in those inner ring suburbs where blight and crime is so bad. Downtown redevelopment generally has very little if any impact on the most destitute areas that developers don’t feel are worth the time, effort amd money to revive. However, even blighted neighborhood areas that are attractive to developers eventually cause the poor in those areas to locate to an even poorer blighted area of the city.
    Are the cities of Louisville and Nashville experiencing the exploding population and development in their border counties like Indianapolis?
    Thank you for the great articleand your analysis.
    NDG

  2. The Urbanophile says:

    ndg, I believe Louisville lost about 40% of its population from its peak pre-merger.

    Nashville definitely has a collar county boom somewhat analogous to Indianapolis. The hot office address is the Cool Springs/Franklin area which is in Williamson County I believe.

    Louisville does not have this problem – yet. It has been slower growing and is, IMO about 10-15 years away from similar problems. Once Jefferson County is full, and upscale commercial development follows residential into Oldham and Shelby Counties, you are going to start seeing the same things as Indianapolis.

    Louisville is very fortunate that Kentucky does not have the terrible township system that Indiana does.

    Race is obviously a factor in all of these debates. Class is a big deal in Louisville too. There is a vast divide between the blue collar South End and white collar East End. It is worth noting that there has long been just one major countywide schools system in Louisville. So there isn’t an equivalent of IPS everyone wants to get out of.

    Thanks for the comments and kind words.

  3. Anonymous says:

    I found this paragraph of particular interest…

    “Unigov retained the township structure where services such as poor relief that benefit largely inner city residents are not contributed to by suburbanites. Similarly, the inner city school district was left intact. People inside the pre-Unigov city limits paid for the Indianapolis Police Department, but people outside did not. However, everyone in the city paid for the Sheriff’s Department, which only patrolled suburban areas. The consolidated services are those like infrastructure, where the balance of spending will be to the suburbanized areas. If anything, Unigov forced poorer, inner city residents to subsidize the suburbanites in the outlying townships.”

    Does the recent consolidation of IPD and the Sheriff’s Dept. correct this inequity?

  4. The Urbanophile says:

    With regards to the police department, I believe the answer is yes. However, with byzantine structure of Unigov, it is difficult to tell for sure.

    All of the other structures besides police are still intact.

  5. Jeffrey says:

    As a clarification, a few services had been consolidated pre-merger

    Planning and zoning was under a city-county planning board

    Parks and recreation was under MetroParks.

    Water was under the Louisville Water Company.

    Sanitary sewers was under the Metro Sewer District (MSD).

    Some of these were created quite early in the postwar era, thus there was an experience with countywide services prior to merger.

  6. s_allen says:

    In the ranking showing Louisville as a top 20 city, is the entire county population counted as being part of the city. That does not seem write if all the suburban cities retain their independence.

The Urban State of Mind: Meditations on the City is the first Urbanophile e-book, featuring provocative essays on the key issues facing our cities, including innovation, talent attraction and brain drain, global soft power, sustainability, economic development, and localism. Included are 28 carefully curated essays out of nearly 1,200 posts in the first seven years of the Urbanophile, plus 9 original pieces. It's great for anyone who cares about our cities.

Telestrian Data Terminal

about

A production of the Urbanophile, Telestrian is the fastest, easiest, and best way to access public data about cities and regions, with totally unique features like the ability to create thematic maps with no technical knowledge and easy to use place to place migration data. It's a great way to support the Urbanophile, but more importantly it can save you tons of time and deliver huge value and capabilities to you and your organization.

Try It For 30 Days Free!

About the Urbanophile

about

Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker, and writer on a mission to help America’s cities thrive and find sustainable success in the 21st century.

Full Bio

Contact

Please email before connecting with me on LinkedIn if we don't already know each other.

 

Copyright © 2006-2014 Urbanophile, LLC, All Rights Reserved - Copyright Information