May 6 (Bloomberg) -- In Kansas, income taxes drop, general-obligation debt doesn’t exist and government workers haven’t had a raise since 2009. Lawmakers approved a $129 million increase in school spending last month only after the state supreme court made them.
One thing is exempt from the drive to cut in this Great Plains state of frugality: more than 3,800 local government units, many in counties that have been losing population for decades. As Republican Governor Sam Brownback has made Kansas a Tea Party-inspired laboratory of small government, the zeal to shrink disappears at the county courthouse door.
U.S. residents demand the familiar in everything from police and fire service to Friday night football, creating redundant jobs and leading to higher taxes. Even as states seek to shrink the size of government, the number of municipal taxing bodies grows. The U.S. Census Bureau counted 90,056 local governments in 2012, up from 81,870 in 1982.
“They know Bob that’s the county commissioner or is on the school district,” Brownback, 57, who’s running for re-election this year, said in an interview in his Topeka capitol office. “They don’t know President Obama, and they don’t really trust anything that comes from that far away.”
“If you go to consolidate units of government, you just get everybody’s back up.”
Across America, the elimination of any local body is rare. Evanston Township, bordering Chicago, died May 1, several weeks after voters decided to dissolve it. It was the first such move in the state since 1932. In New Jersey, voters in 1.9-square-mile Princeton Borough and surrounding 16.6-square-mile Princeton Township approved consolidation in November. That came after at least three referendums failed.
Democratic-leaning Illinois leads the nation in sheer numbers of taxing bodies, with about 7,000 in a state of 12.9 million. Yet Republican-leaning North Dakota, South Dakota, Nebraska, Wyoming and Kansas compose the top five when measured by units per resident, according to the Census Bureau.
In Kansas, the clash between small-government rhetoric and burgeoning-government reality is an “irreconcilable contradiction,” said Michael O’Neal, president of the Kansas Chamber, the leading business advocate in the state of 2.9 million. As Kansas reduces the tax burden -- income-tax revenue declined 20 percent in the fourth quarter of 2013 over the same period the year before -- maintaining the local government structure will be less defensible, he said.
Under Brownback, Kansas has cut income taxes twice since 2012. The push has reduced revenue, contributing to an April 30 downgrade from Moody’s Investors Service, dropping its issuer rating one level to Aa2, the third-highest.
“The phasing-in of increasing income tax cuts, along with rising pension costs, will continue to exert pressure on the budget,” Moody’s said in its analysis.
Kansas has 105 counties, 78 of which lost population in the 2010 census. It boasts 1,300 townships, 1,500 special-purpose districts and more than 900 municipalities. Local-government employment has jumped 63 percent since 1980 to 182,000. That compares with 47 percent growth nationwide.
“Ronald Reagan used to say we need to run government more like a business,” said Chris Steineger, a Republican former state senator. “Instead, we’re being protectionist. It’s a bit of a contradiction for the Republican Party.”
Steineger in 2009 proposed a bill to reduce counties to 13. It died in committee. O’Neal, a former Republican House speaker who served in the legislature for 28 years, proposed consolidating local law enforcement and cutting school-district administrators.
“All hell broke loose,” O’Neal said. The measures failed.
Steineger’s plan would have saved as much as $1.5 billion annually, said Art Hall, executive director of the Center for Applied Economics at the University of Kansas in Lawrence.
“Kansans love local control,” said Dave Trabert, executive director of the Kansas Policy Institute, a nonprofit research group that advocates a free-market approach to governing. “They just want somebody else to pay the bills.”
Local government in Kansas, much of it created in the agrarian 19th century, thrives in an expanse that largely lacks people. Some counties have lost as many as two in five residents since 1980.
The situation is embodied in the gently rolling terrain of Jewell County, along the Nebraska border. This is home to 3,000 people, 450 fewer than a decade ago. The population is disproportionately elderly -- 27 percent are 65 or older. Scatter everyone evenly among the fields of wheat, milo, hay and cattle, and there would be three residents for every square mile (2.6 square kilometers).
Yet the overlays of government have changed little since towns such as Mankato and Burr Oak fielded marching bands a century ago, when the county population topped 18,000. Twenty-five townships remain, each 36 square miles. There are seven municipalities, eight fire departments or districts, 11 cemetery districts, a library district and one school district of 295 students. Eighty-three taxes are levied in Jewell County, according to the Kansas Department of Revenue.
An argument could be made for limited consolidation, said County Clerk Carla Waugh, who works in the stately 78-year-old courthouse on Mankato’s main street. The county already shares an appraiser and asphalt services with neighboring jurisdictions. Still, she said, people want to be assured they won’t lose control.
Jewell County’s population loss reflects broader changes in rural America. The number of farms in the state plummeted from 135,000 in 1950 to 65,500 in 2011, according to the U.S. Agriculture Department. As farms have gotten larger, mechanization means they need fewer hands. That’s elevated the prominence and importance of government jobs.
“That’s the main industry in our area, those are our employers -- hospitals, schools, county government and people who work for the town,” said Janelle Greene, curator of the Jewell County Historical Museum. “I don’t think people ever talk about what would happen if it all went away.”
They did in wind-swept Greeley County, 250 miles away along the Colorado border. It’s state’s least populous, with 1,300 people and was named for New York journalist and presidential candidate Horace Greeley, who in the 19th century urged “Go West, young man.” The county has two towns -- one named Horace, the other Tribune, for Greeley’s newspaper.
In 2004, residents started to talk about melding county and town governments.
“We shifted the focus from consolidation to unification,” said Christy Hopkins, the county’s community development director. “It is mostly semantic. Consolidation triggers in my mind a sense of loss.”
Many residents remained concerned that unification would hurt the “people you see on the street every day,” said Mike Thon, a county supervisor. “You sit behind them at church.”
After three years of discussion, voters in 2007 merged Tribune’s government into Greeley County’s.
There was one condition: No one would lose his job.
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