Thinking Big Regionally

With or without the Palesky 1 percent property tax cap, Maine communities are going to be scrupulous with their spending, at least while the threat of losing all that tax revenue is likely and possibly longer. Many of them have already established regional ties and cooperated with other communities in the areas of safety and business development. School districts, of course, represent imposed regionalization from an earlier era.

But while all of these efforts are good, they don’t really compare with the kind of broad efficiencies that are possible. For that, it pays to recall a speech in Waterville last spring, by New Zealand Ambassador John Wood.

During the 1980s and ’90s, New Zealand transformed its economy, making it much more market-oriented, and along the way significantly reduced its board-driven governmental divisions. With a population of around 3 million in the 1970s, New Zealand had 991 local authorities, a third of which covered counties, cities and towns and the rest oversaw areas such as electricity, airports and harbors. This, recalled Ambassador Wood, caused “diseconomies of scale,” confusion among officials and a lack of appropriate incentives and accountability.

So, over years and with many debates, they cut. Regional councils dropped from 22 to 12; territorial councils, from 200 to 75; special purpose boards from 400 to seven. At the same time, they expanded public participation through direct elections, public advisory boards, postal voting and increased public meetings. The reform wasn’t perfect, and some economists argue that not all the government and market reforms undertaken by New Zealand worked well or were begun in the proper order. But the government itself saved over what it would have spent by finding opportunities to subcontract services and cooperate regionally. The total number of local government jobs fell only about 10 percent during this period, but they were also given additional responsibilities in environmental oversight and some welfare programs previously done by the central government.

An additional New Zealand reform is called the Fiscal Responsibility Act, which helps enforce budgetary discipline by making governments more fully account for the future implications of their policies. By saving on the costs for services such as roads, water and sewage, says Ambassador Wood, “the reforms enable local governments to play a more activist role in the social and economic development of their communities.”

The savings wouldn’t be as dramatic in Maine because the levels of government aren’t nearly as large, and not all regional reforms create savings; some just create new bureaucracies overseeing weakened services. But thinking big about possibilities of how government could more efficiently serve the public – and where it shouldn’t serve at all – could inspire new interest in reducing the costs of local government, which can only help avoid more harmful impulses found in initiatives such as the tax cap.