No significant tax savings in consolidation

David Blair, Princeton
In your issue of April 3, you report on Gov. Corzine’s enthusiasm for municipal consolidation, which is seconded by several past and present officials of the borough and township. The state’s enthusiasm for consolidation is understandable, in part because it gives the appearance of sound tax policy where in fact none exists. A year or so ago the legislature labored mightily to address the issue of state tax reform and, recognizing that tax reform is the third rail of New Jersey politics, they punted. If anyone is to blame for that it is the voters. Tax saving through consolidation was then touted as cover for the total lack of progress.
   As regards Princeton Township, simple arithmetic argues that consolidation cannot have a significant impact on the overall tax rate. In round numbers, the municipal budget accounts for about 24.2 percent of the tax rate with the county accounting for 25.9 percent and the regional school district for 47.6 percent. Even if consolidation resulted in savings on the municipal rate — a doubtful proposition since the Consolidation Commission study of 1996 found any possible savings, however uncertain, to be at the level of “decimal dust” — the impact on the total tax rate would be quite small. The budget of the big expense, the schools, is uncontrollable despite the charade of an annual vote on it that attracts less than 10 percent of the eligible voters.
   While many may favor consolidation, a tax savings is not a reason to do so. The reasons given by municipal officials past and present in your report may be convincing to some; to me they represent a recitation of conventional wisdom, not a compelling case for consolidation.
David W. Blair
Princeton