Towns and cities in the US are using a novel way of cutting costs as tax revenues shrink: out-source administrative functions to neighboring towns or to local counties. Here is an excerpt from an article by Joel Millman in the Wall Street Journal:
Molalla, 30 miles south of Portland, is part of a trend spreading across Oregon among towns and cities facing fiscal crises and seeking to cut spending. The towns of Lowell and Westfir, populations 1,045 and 300, say they outsourced their traffic patrols and criminal complaints to nearby Oak Ridge, population 3,200.
Oak Ridge, in turn, closed its 911 dispatch service—which had been costing nearly $400,000 a year—by paying the Lane County Sheriff’s Department $93,000 to take its calls. Earlier this year, the city of Eugene contracted with Lane County to take over some legal work.
…Oregon’s public sector is catching up to a trend that has already taken off in some other states as cities and towns consolidate operations. Often called “service contracting,” or “service sharing,” this type of outsourcing lets cities keep the work local and maintain a connection with voters, instead of privatizing operations to a commercial venture that might be located far away.
If this idea catches on it could lead to widespread savings at town, city, county and even state level as neighbors reduce costs by sharing duplicated functions.
In Australia, Campbell Newman and Barry O’Farrell could try this to reduce the costs of state level bureaucracy.