Disincorporation an Option for Struggling Cities
A story out of California discusses how municipal disincorporation is being considered by California cities under financial duress. Thankfully, Missouri is generally in much better fiscal shape than California or our neighbor to the east, but disincorporation is still a rarely considered option for small Missouri towns. There are a number of small towns in St. Louis County that contract for the county to perform many town services. The cities tax the residents, and use those revenues to pay the county to provide specific services. That is certainly more efficient than every small city providing every service themselves, but the kicker is that the county would provide these services to town residents anyway, out of their general county taxes, if the town didn’t exist as a political jurisdiction in the first place. In many instances, tiny cities exist only as middle-men for many public services, which the residents would receive from the county anyway if the town didn’t exist as an intermediary — and they’d have lower tax bills.
You may be asking, “Wouldn’t the county have to increase taxes to fund services to more people if the city disincorpoarated?” In many Missouri counties, the answer is “maybe.” But in St. Louis County, it is “no.” This is because of the county’s sales tax pool. If smaller cities disincorporated, the sales tax money that previously went to the cities would be redivided. The county’s share is based on its unincorporated population, which would rise if cities disincorporated, so the county would get more money from existing tax payments, and probably not have to raise other taxes.
I don’t want any state or county laws changed in a way that would mandate disincorporation. I just want the residents of smaller towns in Missouri, and especially in St. Louis County, to know that it is an option worth considering as cities face budget difficulties.
I’m definitely no fan of how fragmented government in the county is, but I’ll play devil’s advocate just because it isn’t so simple as you say. I doubt that few, if any, municipalities contract with the county for everything. A good example is Bella Villa, which is completely surrounded by unincorporated county and contracts for many things but keeps its own police department which provides traffic ticket revenue that is just gravy on top of the normal revenue. If they contracted with the county for police service, those 600 or so residents wouldn’t get nearly so large a share of that revenue.
Also, the biggest argument in favor or many local governments is that residents can pick and choose the best mix of services and tax rates that suits them. Contracting with the county isn’t an all-or-nothing proposition – and municipalities can set their own tax rates. So a suburb full of recyclers living in fortified castles could set a low tax rate and choose a minimum level of county services a la carte, selecting maybe just road maintenance and fire protection while foregoing trash pickup and police protection. So if the county is a wholesaler of services, the middlemen analogy is a pretty good one. And let’s not forget that there are some pretty awful unincorporated parts of the county. Affton and Spanish Lake are nice, but you also have Lemay and Castle Point. Part of the reason these areas get so bad is that residents are so far from their government.
All that being said, 91 municipalities is ridiculously inefficient for all of the reasons everyone already knows and more. But rather than consolidating responsibilities under the county, we should have fewer, larger municipal governments that can efficiently provide a range of tax/service mix choices to area residents. They should also be small enough and have a government structure that allows citizens some level of access so that you don’t get the disconnect that leads to a Castle Point.
Comment by Rob — September 3, 2010 @ 10:18 a.m.
As for the traffic tickets, the county police don’t use traffic enforcement as a revenue enhancer, so the amount of ticket revenue would decline substantially if some of these small cities disincorporated. I always thought that was one of the reasons Rock Hill never considered disincorporating – they made so much off of traffic tickets. The ending of traffic enforcement for revenue purposes would be a wonderful thing – that money would go to far more productive uses than municipal rackets.
Comment by David Stokes — September 3, 2010 @ 2:28 p.m.
You’re right, maybe I was a bit unclear but that is exactly what I meant. I’m not saying they’re a good thing, I was just saying that there are (perverse) incentives for a municipality who contracts with the county for most services to preserve that arrangement. It might even be to the benefit of residents of that municipality (even if it is to the detriment of drivers passing through), but most likely it is to the benefit of the local bureaucracies.
Even if more sales tax revenue became available for unincorporated county residents through dissolution, with the current political structure who is going to make sure it is spent evenly and appropriately? Unless all municipalities were dissolved and there was a radical reorganization of county government that involved local representation, residents would benefit much more from the responsiveness that would come with somewhat larger and more efficient combined municipalities. Easy access to public officials is a key part of why small suburban municipalities can be beneficial.
Comment by Rob — September 3, 2010 @ 2:54 p.m.