Financial Foundations Framework

Consolidation Doesn't Always Save Money

Artwork from GFR Article

Local governments spent a combined $1.9 trillion in 2017, according to the U.S. Census Bureau. This was more than all 50 states together, when we remove money passed through to local governments. While this might seem surprising, it might be less so when you consider that there are more than 90,000 units of local government in the United States providing services such as education, public safety, public health, utilities, transportation, recreational opportunities, vital record keeping, natural resource conservation, and more. Given the vast sums of money and the number of governments involved, it is reasonable to ask: Is there too much fragmentation— referring to the number of local governments and how power is diffused among them—in local government? Could public funds be better used if there were less fragmentation?