A Longitudinal Analysis of the Effects of Service Consolidation on Local Government Expenditures

Abstract

In the current era of fiscal retrenchment local governments are seeking means to provide core services at lower costs. One approach getting increased attention is service consolidation. One of the challenges for policy makers considering alternative service delivery options such as consolidation is the limited number of empirical investigations of the costs and benefits associated with such a difficult endeavor. This study focuses on the identified local governments in Wisconsin that consolidated a service between 1987 and 2009. I found that for communities that consolidated services, overall expenditures increased in some circumstances and expenditure reductions were only associated with one service: capacity management. When I examined protective services, we found limited evidence to suggest that spending increased in those communities following the consolidation.