Abigail Brown, Amanda Bruce, Noah Callahan, Jessika Sherman, and Ian Vlahović
This research practicum examines the relationship between municipal size, cost, and shared services. New Jersey faces a problem surrounding high property tax rates and the assumption that consolidating municipalities and sharing services between municipalities will render overall cost savings, therefore creating an opportunity to lower property tax rates. A 2014 study conducted by Raphael Caprio, PhD., and Marc Pfeiffer, MPA, examined the relationship between municipal size and cost and concluded that there is no significant link between the size of the municipality and the cost of the government. This implies that there is no significant benefit to municipalities sharing services or consolidating.
This report first examines the scholarly literature discussing municipal size as it relates to cost, and existing studies relating to our research questions. The research team replicated portions of Caprio and Pfeiffer’s study to both verify their findings and determine what, if anything, has changed in the decade since. This required an analysis of the relationship between municipal size and cost using 2021 municipal data collected from state databases and individual municipal budgets. A similar methodology was used to examine the selected variables and determine if there are any significant differences over time, particularly between resort and non-resort municipalities. Subsequent sections of this report explore the case for sharing services.