Localism (Part 3)

Localism (Part 3)

TitleA 10-Year Perspective of the Merger of Louisville and Jefferson County, Kentucky
AuthorJeff Wachter (Abell Foundation)

Has nation’s most recent major city-county merger, by Louisville & Jefferson County Kentucky into Louisville Metro government, met expectations?

Merger model:
  • Voters approved merger (54%-46%) in 2002 which took effect on January 1, 2003
  • City & county governments merged into single government (Metro Louisville) headed by mayor & 26-member Metro Council
  • City designated as Urban Services District (USD) with higher property taxes for higher services (e.g., fire protection, sanitation, recycling, street lighting & cleaning)
  • Fire services excluded, but City & County police units merged into Metro Police
Pre-merger initiatives:
  • Per 1975 court-order, City & County schools merged into single County School District
  • While prior city-county consolidation referenda failed in 1956, 1982 & 1983, several functional mergers (e.g., planning, zoning, parks, recreation, library & purchasing)
  • In 1985, leaders negotiated City/County Compact which created 1.25% occupational tax-sharing formula & Greater Louisville Economic Development Partnership & imposed moratorium on incorporation of new cities & annexation of unincorporated areas
  • In 1998, City & County renewed City/County Compact for 10 more years, but neither city-county tensions nor city-county merger support abated

In 1997, city & county leaders merged Greater Louisville Economic Development Partnership & Louisville Area Chamber of Commerce into Greater Louisville Inc. (GLI), area’s first full-service, regional economic development organization (EDO)

Pre-merger profile:
  • Louisville’s population steadily declined from 1960 to 2000, falling to US’ 65th largest city & Kentucky’s 2nd largest city
  • Jefferson County included 93 cities, including Louisville, each with own government
  • City run by mayor & aldermen represented 21,000 people each, while county run by elected judge-executive & 3-member Fiscal Court representing 230,000-person districts
  • Area’s manufacturing base declined & economic transformation, which began during 1990s, slowed by ineffectiveness of multiple competing EDOs
  • Louisville was 259th safest among cities with at least 75,000 residents
  • City suffered from steadily declining tax base
  • City-County government experienced steadily increasing combined workforce & costs

Growing City-County racial divide as city’s African-American population nearly doubled from 18% in 1960 to 33% in 2000

Post-Merger Profile:
  • Population grew nearly 7% during 2000s (not solely due to merger) & City emerged as US’s 18th largest city & state’s largest city
  • Louisville Metro, due to merger & some municipal consolidations, has 83 cities, some of which use Louisville Metro for certain services (i.e., usually ex-county services)
  • Council members represent 25,000-30,000 residents for county & USD, improving overall representation, but diffusing clout of individual representatives
  • Louisville Metro more effective at setting coherent agenda, tackling big issues & launching major projects, especially for region
  • While area’s economic transformation not solely attributable to merger, unified EDO & progressive reputation made Metro Louisville more competitive (e.g., more effective business relocation & expansion efforts & increased employment)
  • Louisville became 6th safest city with at least 500,000 people & rose from 259th to 157th safest among cities with at least 75,000 residents
  • Louisville Metro operates Louisville Fire & Rescue for USD & area still served by 20 independent fire departments, but Merger 2.0 Task Force recommended merging suburban fire departments into Louisville Metro to improve fire protection & save money
  • Streamlining government has enabled Metro Louisville to deliver comparable services with fewer employees, no tax increases (property tax rates for former city & county residents have declined) & only minor fee increases (e.g., booking fees for arrestees)
  • Combined police staffing levels remained unchanged, but post-merger police funding increased at similar pre-merger rates (4-8% per year)

6 of 26 council districts (23%) represented by African-Americans & while this has diluted influence within USD, it has extended influence into county

Approval factors:
  • Prior merger of school systems removed potential stumbling block
  • Strong local pro-merger leadership (e.g., Democratic Mayor & Republican County Judge-Executive, Senator McConnell & every county judge-executive & city mayor since 1980)
  • Strong local media support (Courier-Journal, LEO magazine, Louisville Magazine, The Voice Tribune & Louisville Defender)
  • Created African-American majority districts to address local NAACP concerns
  • Excluded fire protection services from merger due to firefighter union objections

State legislature passed enabling legislation lifting ban on city-county merger referenda & allowing one-time-only referendum for county voters

Other cities:
  • Of 105 city-county consolidation referenda held in US from 1902 to 2010, only 27 (about 25%) approved by voters; most efforts end without vote (e.g., Pittsburgh & St. Louis)
  • Most recent major US city-county mergers occurred in Indianapolis, Jacksonville, Louisville, Miami & Nashville (some mergers have included suburban cities)
  • Recent smaller city-county mergers included Athens GA, Augusta GA, Kansas City KS, Lexington KY,) include Lexington, Kentucky
  • Some consolidated upon creation or early in history (e.g., Anchorage, Denver, Honolulu, New Orleans, Philadelphia, San Francisco & Washington, DC)
  • While post-merger studies have been limited, major regions with city-county mergers (e.g., Indianapolis, Jacksonville & Nashville) have experienced overall net benefits (e.g., reputation, economic growth, streamlined government & stable taxes)

Post-merger issues may include tax distribution, service refinements (e.g., policy & fire), USD boundaries & political representation (especially for minorities)

Our Take:

Restructuring local government is daunting. Winning voter approval is a formidable hurdle, often pitting supporters against odd coalitions (e.g., rural whites & urban African-Americans). Implementing structural changes also poses serious challenges. Still, if we want local governments to do more (often with less), we must be willing to challenge the status quo & replace calcified structures & processes with modern models & systems.

Merging local governments (e.g., counties, cities & special districts) & realigning their operations with today’s challenges will not be easy. But, those regions with the vision & boldness to be innovative will likely become more competitive, not just among their more recalcitrant peers, but in the global marketplace as well. More effective, efficient & accountable local governments will win the future. They will make better use of scarce resources & enable their leaders to speak with one voice & tackle the regional challenges that too often vex our current jumble of balkanized, overlapping & bickering fiefdoms.