A generation ago, the state of Indiana undertook a comprehensive analysis of local government structures through the Kernan-Shepard initiative, convened by then-Governor Mitch Daniels. This effort, led by a distinguished group of Indiana leaders, aimed to modernize local governance through consolidation. While fiscally motivated and well-intentioned, the initiative faltered due to misalignment with local autonomy and political self-interest — critical considerations in any governance reform. The initiative addressed financial concerns during the property tax crisis impacting the state 15-20 years ago, but overlooked operational and administrative dimensions, a gap that continues to challenge local governance today.
Prior to Kernan-Shepard, Indianapolis and Marion County implemented Unigov under Mayor Richard Lugar in the late 1960s, consolidating city and county services to create a more efficient administrative structure. Though not a full consolidation, Unigov improved regional planning and economic development while preserving local identity. This foundational work should be revisited and expanded to meet the expectations of 21st-century taxpayers. A modern analysis should encompass key governance domains including:
- Administration and governance
- Public safety, fire, and emergency response
- Health and human services
- Public education
- Infrastructure, public works, and sanitation
- Land use, development, and design
- Parks, cultural, and arts services
- Judicial functions
Many states face similar challenges, operating under local government structures designed in an era when travel was limited to a day’s ride by horse. In today’s technologically advanced society, including the rise of artificial intelligence, it is imperative to rethink and reformulate governmental service delivery. Infrastructure needs are vast, and taxpayer dollars must be maximized through cooperation and strategic investment. Federal funding, once a reliable source, is increasingly uncertain — making proactive reform essential.
Key questions must be asked:- Is the current structure suited to today’s needs?
- Does the structure leverage technological advancements to deliver services and infrastructure efficiently?
- Are regional governments better suited than local ones for certain functions?
Voluntary Consolidation as a Pathway to Modern Governance
States should consider enabling voluntary consolidation pathways that empower local governments to modernize their operations while preserving autonomy. This approach recognizes the diversity of local needs and political landscapes, offering flexibility rather than imposing uniform mandates. State legislatures generally taketh and giveth. The uniform mandates are unwise, but mandates with respect to optionality are not.
When local governments opt in to consolidation, they should be granted statutory authority to access enhanced tools for:- Economic development, including regional tax incentives, infrastructure investment funds, and business attraction programs.
- Workforce training through coordinated regional partnerships with educational institutions and employers.
- Education, by aligning school district planning with broader regional development goals.
- Infrastructure delivery by enabling bundled capital projects, shared maintenance programs, and regional planning authorities.
This model fosters a future-ready governance framework — one that is agile, scalable, and capable of leveraging public-private partnerships (P3s) and federal funding more effectively.
Strategic Enablers for Consolidation Success
To support this evolution, policymakers should implement a suite of enabling mechanisms that reduce friction and incentivize innovation.
Pilot Programs. Launch targeted pilot initiatives to test regional consolidation models in diverse geographic and demographic contexts. These pilots should be rigorously evaluated for service outcomes, cost savings, and citizen satisfaction, creating a data-driven foundation for broader adoption.
Flexible Funding Mechanisms. Provide access to grants, matching funds, and performance-based subsidies for consolidated entities. Funding should be tied to measurable outcomes such as infrastructure efficiency, economic growth, and service quality improvements.
Streamlined Regulatory Framework. Modernize statutory and administrative codes to remove barriers to intergovernmental cooperation. This includes harmonizing permitting processes, procurement rules, and reporting requirements across jurisdictions.
Technical Assistance and Capacity Building. Offer centralized support for strategic planning, data analytics, and operational design. This could include shared service design templates, regional infrastructure standards, and access to legal and financial advisory services.
Incentive Structures. Design incentive programs that reward collaboration and measurable improvements. For example, allow consolidated regions to levy shared infrastructure fees or access pooled revenue streams for capital investment.
Resource Sharing Platforms. Create digital platforms and governance networks that facilitate intergovernmental collaboration. These platforms should support joint project management, data sharing, and benchmarking across regions.
Customized Economic Development Tools. Tailor economic development incentives to the unique assets of each region — whether natural, industrial, or cultural. These tools should be aligned with a statewide strategic vision and coordinated through regional councils or authorities.
Benefits of Governance Reform
Consolidated and cooperative governance structures are better positioned to attract high-quality private partners. Larger-scale projects offer:- Predictability in planning and permitting.
- Efficiency in procurement and delivery.
- Scale that justifies investment and innovation.
Fragmented local structures, by contrast, often result in duplicated services, inconsistent regulations, and diluted negotiating power — hindering infrastructure delivery and economic competitiveness.
By embracing voluntary consolidation and equipping local governments with the tools to succeed, states can catalyze a new era of regional governance — one that is responsive to modern challenges and capable of delivering transformative outcomes. Governance reform must be transparent, citizen-focused, and grounded in choice. Equipping local governments with the tools and flexibility to evolve fosters a responsive, efficient, and future-ready public sector. Private partners, particularly in infrastructure and P3s, seek predictability, scale, and efficiency. Consolidated governments can bundle projects, reduce transaction costs, and present a cohesive vision — making them more attractive to investors and developers.
Outdated local government structures hinder infrastructure delivery through:- Duplication of services and administrative overhead.
- Conflicting regulations and jurisdictional disputes.
- Limited capacity for strategic planning and project management.
- Fragmented funding sources and competition for grants.
To address these issues, local governments should be authorized to work cooperatively across regions to maximize taxpayer value. For example, envision a metropolitan statistical area with surrounding counties. Rather than operating under a 19th-century model, a regional infrastructure authority could consolidate roads and bridges, pool budgets, and enhance purchasing and negotiation power with the private sector.
This approach goes beyond city-county consolidation. It requires a comprehensive analysis of service delivery and infrastructure investment to improve outcomes. A first step should be to survey and identify successful practices. Pragmatism must prevail over pride — governments should adopt proven ideas.
International examples offer valuable insights:- Toronto centralized government services for unified delivery.
- Conflicting regulations and jurisdictional disputes.
- London created a regional authority overseeing 32 boroughs, including policing and economic development.
- Conflicting regulations and jurisdictional disputes.
- Auckland, New Zealand, unified seven councils to streamline transportation, water, and planning.
- Conflicting regulations and jurisdictional disputes.
- Denmark consolidated nearly 300 municipalities into fewer than 100, improving service delivery and reducing costs.
- Conflicting regulations and jurisdictional disputes.
These examples demonstrate that consolidation works best when paired with autonomy and capacity-building.
Government consolidation is not a panacea, but it is a powerful tool for modernizing public administration, improving service delivery, and attracting private investment. It requires political courage and a willingness to prioritize the greater good over individual roles. Leaders must embrace this concept, and taxpayers should hold them accountable.
By learning from successful models and embracing flexibility, Indiana can build a governance structure that reflects today’s realities and prepares for tomorrow’s challenges. Larger-scale, cooperative projects enabled by consolidation can transform regions, while outdated structures must be reformed to ensure efficient infrastructure delivery. The time for thoughtful, strategic reform is now. Let us challenge convention and create a governmental framework that meets the needs of today — and those of the future.