Cities

This Ohio Town Dissolved Itself Over a 1 Percent Tax Increase

And it's not alone.

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When the Ohio village known as Amelia voted to dissolve its government last year, The New York Times seemed bewildered and a little alarmed. The paper acknowledged that it isn't exactly unprecedented for a municipal regime to shut its doors: Since 2012, it noted, "at least 12 in Ohio alone" have "dissolved or are in the process of doing so." But it added that these fights usually happen "for financial reasons, often because shrinking populations or reduced state funding make paying for basic services unsustainable." Amelia was growing, and it wasn't in particularly dire financial straits. The battle there erupted over what the Times called "a new local tax of just 1 percent."

That sort of conflict is not especially unusual. In a 2012 paper for The Yale Law Journal, Michelle Wilde Anderson—the same expert who told the Times that cities usually dissolve because of financial problems—lists tax revolts as another recurring reason towns think about disbanding. (Granted, most of the tax-oriented dissolution campaigns that she discusses failed.) And as the Times eventually mentions, the flashpoint in Amelia wasn't simply a new local income tax; it was the fact that the tax was imposed without public input, along with some plausible complaints that the town was wasting too much of the money it already had. The vote to shutter the government wasn't close: 68 percent backed the idea.

Anderson's paper points out that more cities considered dissolving in the first decade of this century than did in the final three decades of the 1900s. Nonetheless, she notes, the press frequently greets a dissolution campaign "as if it were the first in a generation or more, despite the fact that many such changes were being considered across the country at the same time." Even when the spotlight shines on one of these rebellions, the larger phenomenon somehow seems invisible.

Is that phenomenon something to be happy about? Are we better off with more municipal governments or with fewer?

It depends. Eliminating a government means scraping away a layer of taxes, bureaucracy, and sometimes corruption. But it also means replacing a regime that's close to home with one that's more distant and often less accountable. If that just means the county takes over plowing the snow and collecting the trash, it may be a net gain. If it means a new consolidated metropolitan government that's quick to raise taxes and slow to deliver services, it's not. There is a long history of top-down efforts to clear away small jurisdictions in favor of allegedly more efficient centralized systems, and even nominally grassroots efforts sometimes get a helping hand from on high. The State of New York, for example, has a Local Government Citizens Reorganization Empowerment Grant Program that encourages and helps fund the process.

In this case, the former Amelians will now be divided between two townships—not exactly a terrible fate. Things look different in villages that lost local control because of encroachment from without rather than a revolt from within. The American landscape is littered with the corpses of towns conquered by larger neighbors. Many of those formerly independent places persist as distinct neighborhoods: Bushwick was a self-governing township before it was absorbed by Brooklyn, which in turn was later swallowed by the City of New York.

Indeed, some communities have incorporated for basically the sole purpose of fending off annexation. While state laws vary, it is generally easier for a city to extend its boundaries into unincorporated land than to absorb an officially recognized town. (The rules for dissolution vary too: States have disparate approaches when it comes to whether a county can veto the process, say, or what happens to a dead city's debts.)

As far as local services and amenities go, different people have different preferences; the more fluid the system, the easier it is to satisfy that diversity of wants. Ideally, municipalities would function less like mini-states and more like voluntary associations, which constantly split, merge, and dissolve.

In the 1960s and '70s, the political scientists Elinor and Vincent Ostrom investigated the trend toward consolidating small jurisdictions into centralized regional governments. They concluded that the push was misguided. Local governance, they reported, is better when carried out by "polycentric" systems, in which political units of varying size can cooperate but act independently—operating under a shared set of rules but without a clear hierarchy.

That describes the status quo in much of the country: a patchwork pattern of not just villages and townships and counties but school districts, fire districts, water districts, and other local authorities whose territories do not always match the municipal boundaries, each with a mix of services it provides in-house, services it contracts out to commercial enterprises, services it contracts out to nonprofits, and services it contracts out to other governments. But there are more radical visions of polycentricity as well, with the furthest-reaching resembling the Russian anarchist Peter Kropotkin's vision of a world where social harmony emerges not from submission to a central authority but "by free agreements concluded between the various groups, territorial and professional, freely constituted for the sake of production and consumption."

Somewhere between Kropotkin and the status quo, the Swiss economists Bruno Frey and Reiner Eichenberger have called for a meshwork of "functional overlapping competing jurisdictions." The late Robert Nelson, writing in Reason in 2006, built on their idea to propose a "postmodern political order" in which "the size and functions of local government would be determined by a trial-and-error process of competition. Different institutional forms would contend with one another." Local governments would come to resemble residents' associations more than public bureaucracies; municipal bodies would see "a routine flow of mergers, breakups, divestitures, and other organizational rearrangements."

Put differently: If a neglected neighborhood in Cincinnati wants to become an independent urban village, it should be able to do so as easily as the people of Amelia dissolved their town 20 miles away. And why not? The right of exit is one of the most potent checks on power, and Americans should have more ways to exercise it than just by voting with their feet.

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  1. Now if we could just stop DeWine from shutting down the whole damn state.

  2. “A 1% tax increase” is how they sold the sales tax increase here. It was 2%, now it’s 3%. The people who tried to – correctly – point out that that’s a 50% tax increase and what the fucking fuck are they planning on doing with that much new money when they can’t even properly budget the huge gobs of money they’re getting now lost the battle for public math education. Hey, it’s only a penny! What’s the big deal?

    1. That’s how it starts, once in place the government greed for money constantly expands.

    2. The real victims here are the coffee shop proprietors and employees.

      That one percent tax increase was just one cup of coffee every week for each citizen. Now that they’re shuttering the town government, each citizen will no longer be buying dozens of cups of coffee each week. Well… I think, that’s how taxes were explained to me anyway.

      Maybe the county government can step in with coffee shop subsidies.

      1. Fewer cups of coffee purchased at the donut shop. Cops hardest hit.

    3. It’s not the amount of the theft, it’s the denial of the right to your property. Once you concede a right, any right, all rights are at risk. Rights start from the right to life and logically follow as liberty, property, happiness. We, as sentients, are born with inalienable (unwaiverable, SCOTUS notwithstanding) rights.
      This fact makes voting to forfeit your sovereignty and everyone’s else’s a denial of rights, which is irrational and destructive.

  3. Not seeing a problem here.

    No one ever said the democratic process is clean – and actually just the opposite – democracy is by design messy.

    Decisions were made, some people disagreed, people civilly resolved the issue; now move on to the next thing.

    1. Local government is often the worst government. People don’t think about it, but it’s their neighbors with their pet peaves who are the worst tyrants. They get into office with the promise to stop yapping dogs from yapping, get their ordinance through, then have four more years in their term with nothing to do but meddle.

      In my home town, they decided to revamp the city charter. Thankfully we got to vote on it. Unthankfully, no one read it. It was ten pages, the first nine and a half were decent. Then on the bottom of the last page was the statement that all enumerated restrictions could be ignored and all unenumerated powers were reserved by the city. Meaning the charter gave then total and complete carte blanche.

      1. How do you reconcile places like Max Nebraska, a town with no government, one in which people look after each other? Whereas local government can have the worst government, I suspect it can also have the best ‘government.’

        https://youtu.be/7-v1Ta_il94

        And, to push this idea a bit sideways, what if the country was composed of 3,140 states, instead of only fifty? In our normal lives, we live under local government, county government, state government, and federal government. Would the US suffer under the same centralized crime and corruption if every county (all 3,140) was made into a state? And, what if local laws superseded state and federal laws? Would Americans have a better choice of places to live? Would life be less government-centric? Would people be happier?

  4. A local income tax? Holy moly.

  5. It’s reassuring to know that the idea of dissolving government is not completely alien to the citizenry anymore. If only we could apply such fervor at the state and federal level too.

    1. Mock California all you want, but be managed to get propositions passed that limit the raising of taxes without a supermajority, and restricts the raising of property taxes more than a tiny few percentage points, regardless of property revaluations.

      A major victory, Prop 13 sparked a nationwide tax revolt. Proggies and public sector unions have been trying to get rid of it for forty years now. They’re still trying. So far they haven’t.

      Yes, we still get tax increases all the time. But every one needs to go through the process. We’re a hell of a lot better off than if we had no restraints on local and state government.

      Red State voters think they can keep their taxes low by trusting in Red State politicians, but the last laugh will be on them when budget crunch comes.

  6. This incorporated city outlived its usefulness.

    Big whoop. How could have not been in a unreason Roundup?

    I know unreason staff sucks lately and all but this SARS-COVID19 hysteria is a rare event in US history. This is one of the first stories published on the first Monday where some schools are closed for a month “so kids dont spread this virus”.

  7. Democracy works, I guess?

  8. > The New York Times seemed bewildered and a little alarmed.

    Of course they’re alarmed! There are people out there who do not worship government! Moreover, they dissolved their government because they didn’t want more of the sacred taxes! What’s next? Cutting back on regulations? No police checking for speech violations? Volunteer crossing guards? Dogs and cats not coercing each other?

  9. 1% tax works out to $1million per person.

    /Brian Williams

  10. Honest inquiry.

    Can the town council or citizens/voters of a town vote with effect to secede from a county and become part of an adjoining/another county?

    1. Probably depends on the state.

  11. THAT’S how you dissolve a government?

    /Cancels order for 100,000 gallons of hydrochloric acid.

  12. Better dead than red? Reminds me of Antelope, OR vs the Rajneeshees. Learning about that whole saga could give one some valuable lessons about local government control.

  13. Interesting article. There are areas like Max Nebraska which have never had a local government, and they seem to like it that way. People look after each other, and they don’t count on government to bail them out when things get bad.

    In my own observation and opinion, it appears that everything big is bad, and that includes big government, big business, big banks, big media, etc. Small is wonderful, and so, in general, I support local governments over county, state, and federal governments. But the laws are upside down – local laws should have precedence and authority over county, state, and federal laws. Somehow, because we are now a country of practicing communists, I suspect that will never happen. I hope I’m wrong in that suspicion.

    1. There are lots of big “cities” that have no town/city government.

      A few of the biggest cities in Washington was simply unincorporated county areas until the 90s, and only become cities to stop being annexed by Seattle and Spokane. These were places with nearly 100,000 people in them, and no city government. They worked fine.

  14. ….. “The right of exit is one of the most potent checks on power”…

    Just remember, they may not like you leaving and decide to go to war to convince you to come back.

  15. The neighborhood I live in in Seattle was its own city back in the day… I bet it would be 100x better managed if it still was, since the next city north of Seattle city limits has better schools, lower taxes, less crime, better roads, and is superior in every possible way.

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