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Economic effects of Louisville merger remain uncertain 20 years later

A graphic that says "How merger reshaped Louisville" and shows a map of Louisville
Mindy Fulner
Economic development was one of city leaders' main arguments for a merger.

Government and economic leaders cited business-related benefits in their pitch for a Louisville-Jefferson County merger 20 years ago. But those advantages were disputed then, and the results are unclear today.

More than 100,000 vehicles fly down Interstate 264 each day. Like many other roadways, it’s a vein carrying economic blood across Louisville.

The interstate also used to represent a divide between the old city of Louisville and Jefferson County.

Before 2003, most of the city was between the highway and the Ohio River. Two previous attempts to merge the city and county, in 1983 and 1984, both failed.

But by Nov. 2000, another vote was on the table for city and county residents. Four years earlier, a report prepared by economic development consultant M. Ross Boyle for Louisville-area economic leaders offered strategies to promote business growth and compete with other nearby cities like Cincinnati and Kansas City.

One of those recommendations was to merge city and county, which the report also argued would lower government costs.

By the turn of the century, the pro-merger campaign had the support of the city and county governments. It also had the backing of the region’s recently formed chamber of commerce, Greater Louisville Inc.

Daryl Ward Snyder was an economic development director with the chamber at the time of the campaign. He said, back then, outsiders saw Louisville as smaller than it was. Population numbers didn’t include areas beyond the city proper that were still part of the metropolitan statistical area.

“A really good economic development consultant, or professional, or researcher, would look at MSA information anyway,” Snyder said.

But he also argued that not everyone viewed the city through that lens, and a merger was an opportunity to change the narrative. In the 2000 U.S. Census, Louisville was the 65th-largest city in the country. In 2003, the year the merger took place, it leaped to 16th.

Louisville Metro is now the nation’s 27th-largest city, according to a 2022 Census estimate.

Snyder said the merger made it easier to attract companies.

“If a company is trying to make a decision on where to locate, or whether to relocate or expand into, then they need to be able to do that expeditiously,” Snyder said. “And if you have to go to a city and deal with a city and a county government, that's twice the work.”

Pro-merger advocates in 2000 also touted the economic success of merged cities like Indianapolis and Nashville, which had consolidated their governments more than 30 years earlier. They believed Louisville would reap the same rewards, which Snyder said included higher per capita income and better-educated residents.

But not everyone agreed.

Ronald Vogel is a former University of Louisville professor of political science and urban and public affairs. He co-authored a report for then-county commissioner Darryl Owens, who by the time of the merger vote was a staunch critic of the idea.

The report, published in March 1999, looked into the potential effect of a merger. It concluded it wouldn’t be beneficial to Louisville, and in part cited a study that examined other cities’ mergers.

That study reviewed the number of manufacturing, retail and service businesses in consolidated counties.

“We saw no reason in the academic scholarly literature to say this was going to result in any big change,” Vogel said.

Vogel co-authored another paper, published almost a decade after the merger vote, that examined its effect on Louisville. The paper’s authors criticized the move. They also compared certain economic metrics before and after the merger.

The paper looked at the number of employees, number of businesses and annual payroll. It found no significant growth in those areas after the merger.

Vogel said in an email that he still believes the merger did not benefit Louisville.

“It didn’t accomplish what its proponents claimed it would[,] and worse it had harmful impacts on minority representation and influence in policy making [sic] in the city,” Vogel wrote.

While many Louisville leaders who wanted the merger weren’t focused on possible political inequities, some anti-merger activists like Owens were worried about that.

Louisville resident Rob Maggard was in his mid-20s when he knocked on doors to encourage people to vote against merging the city and county, he said.

He was most concerned about the effect of a merged government on Black voting power, but he also thought the merger was more about big business than everyday people. He said he still has those concerns about Louisville.

“I think the goal of economic development sometimes misses,” Maggard said. “The idea that if we just bring in whatever company, and they'll come in and provide jobs that will save the day… I don't think it ever has closed the enormous gap of inequality of income and wealth that we see.”

Maggard isn’t as opposed to the merger as he used to be, however, and said he wants to understand more about how it changed the city before he makes up his mind.

It’s difficult to determine how the merger specifically caused economic changes in Louisville, even if it may have made the city more attractive to outsiders and companies.

Greater Louisville Inc. and Louisville Metro Cabinet of Economic Development spokespeople said neither entity has reports nor studies examining the economic effects of the merger.

Steve Higdon helped lead the 2000 merger campaign as president and CEO of Greater Louisville Inc. He said that criticism of a merger didn’t dissuade him or his allies.

“We heard probably every argument that had ever been made in any merger campaign,” Higdon said. “Our belief was, and mine still is… perception means a lot.”

He also pointed to Yum! Brands’ corporate office in Louisville, just past Interstate 264, the highway that once separated the city and county.

The office is located right on the old border, which Higdon said caused a rift among city and county officials on who should get the tax dollars it generated. Both sides would try offering sweeter tax incentives for businesses to move to their part of the county, he said, at the expense of taxpayers.

“We were looking at it as two different competitive businesses, and the business community said, ‘No business in the world would ever survive doing that. There's no reason a government should do that,’” Higdon said.

The merger did change Louisville. It created a new police department, folded in unincorporated areas, and shifted Black political power in the city.

But the economic wins and losses are still being disputed.

We examined the ways the city-county merger affects Louisvillians’ lives now. Explore more stories from our series, “How merger reshaped Louisville.”

Jacob is LPM's Business and Development Reporter. Email Jacob at jmunoz@lpm.org.

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