May 18 (Bloomberg) -- Combining the two New Jersey communities that share the Princeton name is testing Governor Chris Christie’s effort to get the state’s patchwork of 566 cities and towns to merge governments.
Voters in 1.9-square-mile Princeton Borough, which includes the downtown shopping area, and the surrounding 16.6-square-mile Princeton Township approved consolidation in November, after at least three earlier referendums failed. Elected officials have been meeting at least once a week as they face a Jan. 1 deadline to decide on everything from how many people to fire to which municipal buildings to spare.
Christie, 49, a first-term Republican, is pushing consolidation after cutting municipal aid in 2010 and capping annual increases in local taxes at 2 percent. Princeton, home of the Ivy League university, agreed to merge after the governor endorsed the plan and offered to pay 20 percent of the $1.7 million cost of combining. He has promised to do the same for those who follow Princeton’s lead.
“This is a test case for the principles he’s basing the economic future of the state on,” said Brigid Harrison, a professor of law and politics at Montclair State University. “If it fails, it’s going to be held up by the home-rule folks as proof of why it doesn’t work.”
Governors in Ohio, Michigan and New Jersey say their states have too many layers of government and that unwinding them would save money without harming services. Christie, during a May 16 town-hall meeting in East Hanover, said consolidation has been a slow process and “it’s not like ripping the Band-Aid off.”
“What I’m trying to do is get towns to decide how much they love home rule and how much they’re willing to pay for it,” Christie said. “Taxpayers have had enough and they want government to start solving these problems.’
New Jersey residents paid an average $7,759 in property taxes in 2011, the highest burden in the nation. The state has more than 1,000 local-government units, including towns, school districts and counties that rely on the levy for revenue.
Princeton, located halfway between New York City and Philadelphia, has been two towns since 1894, when its center seceded amid a school-funding dispute. There are about 30,000 residents in the combined community.
Until last year, many borough residents had resisted a merger, saying the needs of those who live near the pedestrian downtown areas would be outweighed by voices in the larger, more rural township. In November, the measure passed by 61 percent in the borough and 85 percent in the township.
‘‘I’m still pretty new here, but there has got to be a more efficient way to run things,” borough resident Pam Hughes, 70, a retired music teacher who moved from Colorado two years ago to be closer to her family, said in an interview.
A long-standing belief that decisions affecting towns should be made locally has kept communities from taking the steps to merge, said Harrison of Montclair State. The costs of running government have gotten so oppressive that some communities are beginning to rethink past objections, she said.
“The political culture of this state is vested in home rule and in some ways that’s irrational,” she said in a telephone interview. “Those home-rule principles tend to run deep in the veins of New Jersey’s voters and they tend to be very protectionist about their local governments.”
The Center for Governmental Research, a Rochester, New York-based nonprofit organization that advised the Princetons on consolidating, estimated the combination will save as much as $3.1 million a year, largely from uniting the police departments, which each have about 30 officers.
The towns already share one school district and more than a dozen services, including animal control and fire. Police is the largest cost for both, $3.5 million in the borough and $3.8 million in the township, according to the center. Their 2010 budgets combined totaled $65.1 million.
The center recommended that the towns reduce the number of police officers to 51 from 60 within three years, and fire another three employees. A reorganization plan proposed May 16 doesn’t call for eliminating police. It suggests shedding 15 redundant positions, including administrators, chief financial officers, clerks, code officials and backhoe drivers.
Severance pay and unused sick and vacation payouts may result in a one-time cost of as much as $527,000, according to the task force recommending merger decisions. Attrition will save money in future years, said Scott Sillars, vice president of the group, which includes citizens and elected officials.
“There will be some savings -- there’s just no way there won’t be,” said Sillars, 57.
The new town council will decide which employees in duplicate jobs will be kept. Nine candidates are running in a June Democratic primary for six seats on the united governing body. Two Democrats are running for mayor.
One person out of a job after Jan. 1 is Township Mayor Chad Goerner, a Democrat who championed the merger and isn’t running for re-election. Goerner, 36, is also an institutional consultant and vice president at UBS AG.
Princeton’s Democratic primary often serves as the de facto election in two communities where voters backed Democrat Jon Corzine over Christie in 2009 and President Barack Obama in 2008. Merger decisions have been slowed by tension between candidates in the borough and the township, Goerner said. The process will move quickly after the primary, he said.
The two municipalities have about $107 million of debt that will be combined. Standard & Poor’s rates the borough AA+, the second-highest grade, and the township its top AAA.
The task force on May 16 also recommended not offering police retirement incentives, and seeking bids for dispatch services. It suggested moving police and court operations to the township’s municipal buildings. All of their suggestions need approval from the borough and township councils.
“We’re going to get there -- it’s just going to take some time,” said Barbara Trelstad, borough council president. “I think we’ve got to.”
The Center for Governmental Research estimated tax savings of $201 for the average borough property and $240 in the township. The average property-tax bill in 2010 was $15,255 in the borough and $16,212 in the township, with about 20 percent going to the municipality, according to data from the New Jersey Division of Local Government Services.
Christie enacted a 2 percent cap on property taxes that took effect at the beginning of 2011. The limit will force some municipalities to merge or share more services, Christie said in East Hanover. He said he expects to propose legislation by the end of June that would strip some state aid from towns that don’t share services if they can do so with a neighbor.
Loch Arbour and Allenhurst, communities along the Jersey Shore that combined have fewer than 800 residents, are considering consolidation, while Scotch Plains and Fanwood in Union County are seeking state approval to create a merger study commission funded in part by grants, said Gina Genovese, executive director of Courage to Connect, a nonprofit group that promotes municipal consolidation.
Cherry Hill and Merchantville in Camden County are also examining a merger, Genovese said in a telephone interview. A Princeton success will rouse more towns to act, she said.
“It’s important that they go first because when you lay a trail, it becomes easier for others to follow,” said Genovese, a former mayor of Long Hill Township in Morris County. “They’ve broken the logjam. If they can reduce property taxes in New Jersey, that’s a model we need to replicate.”
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