More shrinking cities: Desperate towns move to ‘disincorporate’

In Flint, Mich., and some other troubled communities fighting against an onslaught of abandoned and vacant properties, the latest survival tactic is to “shrink” the city. As The Washington Independent noted recently, the shrinking cities movement involves cutting off desolate areas from city services, urging anyone who still lives there to leave, and letting the land return to its natural state. Shrinking a city is definitely a sign of desperation — but it’s also a savvy move, a way to survive in tough times by taking control of new development and scarce resources.

As The Wall Street Journal reports today, other towns also in financial peril are considering another approach — “disincorporation.” It means dissolving a town — literally. That could allow residents to avoid paying local taxes, escape the costs of local services and pensions, and get other services more cheaply by sharing the costs with the surrounding county.

Disincorporations are rare, usually resulting from population declines that leave too few residents to support the government. The most recent in California occurred in 1972, when stalled growth and political instability led Cabazon to dissolve itself, according to the California Association of Local Agency Formation Commissions. In Washington state, the last one occurred in 1965, when Elberton gave up its autonomy after 70 years, according to the nonprofit Municipal Research and Services Center in Seattle.

Today, some small municipalities are exploring the step to escape some financial burdens that have been exacerbated by the recession.

Several small towns in Washington state, Colorado, and California are considering disincorporation seriously, but it’s not clear whether they’ll have the legal authority to go through with it. Disincorporation wasn’t intended to be used by towns to escape financial burdens, according to The Journal. And besides, many counties and surrounding towns aren’t in much better financial shape, and are likely be reluctant to take on more costs.

Dissolving a town also means giving up a local government, with its ability to raise money through bond issues or taxes, and its control over development and zoning issues. The Journal described the move as a “once unthinkable” option for most communities. But as the shrinking cities movement and disincorporation attempts tell you, nothing’s off the table during a financial crisis.