Does Wisconsin Have Too Many Local Governments?

Wisconsin ranks 3^rd in state/local taxes as a percentage of personal income and eleventh in the total number of local governments (3,059). This has led many to assume that the two rankings are linked and that one way to improve our tax ranking is by reducing the number of local governments. But is there really a statistically valid correlation between these two rankings? One way to find out is by looking at tax rankings in Wisconsin and the ten other states with more local governments than Wisconsin:

• If having a relatively large number of local governments is a root cause of Wisconsin’s high tax ranking, how can it be that Illinois, with more than twice as many governments, ranks 34^th in state/local taxes? Or that Indiana, with roughly the same number of local governments as Wisconsin, ranks 37^th?
• In fact, nine of ten states with more local governments than Wisconsin actually have lower tax rankings – in most cases much lower.
• Some may argue that the real problem isn’t the total number of local governments in Wisconsin per se, but the large number of towns. It’s true that Wisconsin has 1,265 towns, but five other states have more towns than Wisconsin (Illinois, Kansas, North Dakota, Ohio and Pennsylvania) and all of them have lower tax rankings than Wisconsin.
• This means that if our goal is to reduce Wisconsin’s state/local tax burden, reducing the number of governments is not a realistic way to get there.