In 1938, some of Louisville's bourbon distillers decided they didn't want their South End neighborhood to be annexed by the city, because that would force them to pay higher taxes. They persuaded the Kentucky legislature to allow small cities veto power over annexation and then quickly created a new jurisdiction called Shively, as a kind of tax shelter. The idea soon spread and before long every subdivision in Jefferson County that wanted lower taxes or its own one-man police force chose to incorporate. By the 1970s, the county had more than 80 municipalities. Their proliferation was a source of frustration for everyone, from engineers laying down sewer lines to developers trying to figure out which building codes applied where.

Worse still, the region had a mayor running Louisville and a judge- executive in charge of Jefferson County, more often than not with wildly different agendas. Business leaders complained that trying to get the two levels of government to agree on anything made them feel like children trying to wheedle a joint decision out of parents who refuse to talk to one another. "When you think about trying to make deals with companies," says Bill Summers, a former Louisville deputy mayor now with the local economic development agency, "you often spent more time negotiating with the two governments, trying to get them to agree on what we wanted to offer, and who was going to take credit and how they were going to take it, than actually negotiating with companies to get them here."

Next month, however, the days of duplication and rivalry will end. As a result of a ballot initiative passed two years ago, Louisville and Jefferson County will be combined into one metropolitan government, implementing a merger of a size that no city in America has pulled off since Indianapolis did it in 1970. Already, scout ants from Memphis, Milwaukee, Rochester, Buffalo, Cedar Rapids and Fresno have come sniffing around, hunting for strategies they can use in their own nascent moves toward merger. "The model of what Louisville is doing would be ideal for us," says Fresno councilman Brian Calhoun.

Despite all the interest and attention, the architects of Louisville- Jefferson Metro Government, as the new entity will be officially known, are trying to avoid promising too much. They are not claiming that the merger will be an economic development panacea, that Louisville will become America's new hot city, a Seattle or Austin that spawns trendy industries, or an engine of growth along the lines of Atlanta.

People in Louisville tend to regard their city realistically, as a comfortable, solid, unspectacular place. Louisville and Jefferson County still contain two-thirds of the people and 80 percent of the jobs in the seven-county metropolitan area--job suburbanization has taken place largely within the Jefferson County lines--but the trend is that both jobs and people are moving farther out. If the merger can help Louisville maintain a decent mix of jobs and industries, while preserving the importance of the merged city in the larger area, that will be triumph enough.

THE BORN CLOSER

One of the important aspects of the Louisville merger that may not be easily duplicated elsewhere involves a cult of personality. Jerry Abramson, who served as mayor of the "old" Louisville for a dozen years before he was term-limited out in 1999, won the newly created office of metro mayor last month with 74 percent of the vote against three opponents. Abramson is the closest thing Louisville has to a resident rock star. Steve Higdon, president of Greater Louisville Inc., the local chamber and economic development agency, says "there's not one better person on the planet" to lead the area politically. That kind of hyperbole isn't uncommon. "I would not underestimate the urge to throne him again," says Mike Herrald, regional president of PNC Bank. "People had the belief, rightly or wrongly, that if only he were in charge of the whole thing it would be better."

The 56-year-old Abramson is a legendary salesman, a "born closer," in the words of one associate, who can drive around his city and point with pride to all the successful projects built during his previous tenure: the minor league baseball field; the riverfront reclaimed and revitalized east of downtown; and the 1,400-unit public housing disaster that was remade into a New Urbanist mixed-income neighborhood. Abramson is also is a true policy wonk who likes to hold Clintonesque bull sessions with his staff and can discuss drainage problems in the far corners of the city without notes.

Abramson is taking an almost Mussolini-like approach to the details of the merger, devoting himself to making sure that all of the managerial trains run on time. Ask him what he plans to do once he takes office, and rather than revealing any grand blueprint, he talks about changing the radio systems of the city police and county sheriff's departments so that officers in the combined jurisdiction can actually talk to one another. He'll go on at length in public forums about the $400,000 software package he wants to buy for county human resources personnel so they can team up easily with their city counterparts.

Abramson understands that the merger will not be a hit with the public unless the trash is carted away on the usual day and citizens can connect with the right person when they call to get a stray dog picked up. But simply providing the accustomed level of services without a tax increase will be a challenge in itself: As a result of city and county tax code differences, the new Louisville government faces an immediate shortfall of at least $44 million. "There's a good reason why people aren't lined up to be the first mayor of the new city," Abramson says. "There'll be a cavalry charge to be the second."

A TOUGH SELL

Discussions of regional governance generally take two forms nowadays. In areas that have experienced rapid growth, such as Denver and California's Silicon Valley, political leaders--generally prompted by local business interests--are recognizing that issues such as transportation and the environment don't honor political boundaries. This leads to a kind of ad hoc approach in which regional solutions are discussed for individual problems--water management, for example-- but the idea of actually merging governments is barely a blip.

Serious merger discussions usually happen in less vibrant areas, where metropolitan government is viewed as a way of shaking things up and cutting down on costs. If matters are difficult, the urge toward a grand solution is stronger. But merging governments is always a tough sell. While regionalism is often portrayed as the cure to a lot of urban ills, from traffic congestion to wasteful duplication of resources, few localities are eager to sacrifice their autonomy merely in the hope that it might lead to a more efficient combined water district. Municipalities, even small and inefficient ones, like to be able to provide their own services without having to be dependent on someone else.

Merger is an especially tough sell in declining areas where fights over diminishing resources have, perversely, made cooperation more difficult. In Milwaukee County, for example, where consolidation is being pushed by a local economic development agency, there is great distrust between the city of Milwaukee and the suburbs, growing out of a decade-long fight over who would pay for court-ordered city sewer improvements. The city won that fight, but may have lost the war when it comes to looking for further help from its neighbors.

Suburbanites want to maintain their friendly local police and fire departments, and don't want their tax dollars sent to prop up ailing downtowns. Cities might cry that the suburbs should help finance the urban amenities that their residents enjoy, but suburbs like to complain that cities talk to them only when they need money. When Fresno's Brian Calhoun put a resolution before the city council calling for a commission to study merger ideas, it passed unanimously, only to be shelved by the county board of supervisors. "The pressure was coming from all these smaller communities that somehow thought big bad Fresno would step on their turf," Calhoun says. Memphis Mayor Willie Herenton has been pushing for a referendum on merger, but polling indicates the idea has a long way to go before residents of surrounding Shelby County will embrace it. "Does the phrase 'D.O.A.' mean anything?" asks John Ryder, Republican National Committeeman from Shelby County.

In Erie County, New York, County Executive Joel Giambra has backed away from his earlier calls to fold the city of Buffalo into the county, which has about 60 separate governments. "There are not many people in the suburbs who have much confidence in the city government," Giambra admits. Having no hope of a full-scale merger, Giambra has been taking an "inch by inch" approach, setting up agreements for the county to share purchasing, assessing and water management with some of the municipalities, and facilitating shared services, such as law enforcement, between neighboring towns and villages. With several of Erie's smaller governments having raised tax rates by double-digit percentages in recent weeks, Giambra hopes his call for abolishing duplication will take on greater urgency. Even in Milwaukee County, savings from merged fire districts in smaller North Shore communities have kept hope of merger alive.

FALLING BEHIND

As dramatic as Louisville's move may seem, the truth is that consolidation has been happening on a piecemeal basis between the city and Jefferson County for years. The water and sewer authority has answered to both jurisdictions since shortly after World War II, and the school systems merged in 1975. In the early 1980s, Abramson negotiated a deal with the county that combined administration of the park, zoo and library systems, and put an end to annexation wars by establishing a permanent proportional split of occupational tax revenues. This year, Jefferson County will write a check to Louisville for $11 million to keep the county at its codified 58 percent of the occupational tax take.

Even so, proposals to merge Louisville and Jefferson County failed three times, in 1956, 1982 and 1983, before finally winning approval in 2000. This was in large part because they spelled out too much of the detail in advance. Plans to abolish local fire districts, for example, drew plenty of fire themselves. This time, merger proponents were careful to give voters few specifics to worry about. The ballot measure simply provided that the city and county would become a single unit, with a metro mayor taking over the responsibilities of the previous city mayor and county executive, and one metro council replacing the board of aldermen and the county's fiscal court. Beyond changing the nature of these elected offices, nothing was settled as to whether agencies or even administrative functions of the city and county would be consolidated. All those 80-odd municipalities within the county and the 21 fire districts outside the city of Louisville could remain intact (although a dozen or so of the smaller cities have chosen to merge with each other in recent months to have more of a voice in metropolitan affairs).

For most proponents, the reason to merge this time was more economic than political. Louisville has a relatively stable employment base, headed by manufacturing companies (among them Ford and General Electric) which still account for about 20 percent of the jobs. The city and county are home to a growing health services sector. The airport is the overnight hub for United Parcel Service, Kentucky's largest private employer, which recently completed a billion-dollar expansion of its facilities. And Louisville has long been a fast-food paradise, spawning Kentucky Fried Chicken, Papa John's pizza, Rally's, Chi Chi's, Long John Silver and several other chains. The mix of junk food, tobacco and bourbon leads locals to joke that they don't engage in healthy living but "happy living."

Still, the national economic boom of the 1990s largely passed Louisville by. Young people have been leaving steadily for the past 30 years--a net loss of 35,000 people in the current 25- to 34-year-old age group since 1970. Elderly residents comprise 14 percent of Louisville's population, among the highest proportions of seniors in the country. Academic studies place the region at the bottom of the list of technology-friendly metropolitan areas. "Ultimately," says Steve Higdon, the president of Greater Louisville Inc., "what is at stake for any community is whether you can attract and retain the brightest people. And we have not done well at that at all for decades."

Louisville boosters never tire of trumpeting the fact that merger will vault their city from the 64th largest in the country to the 16th largest, the highest ranking it has held in more than a century. Greater Louisville Inc. recently launched a quarter-million-dollar public relations campaign to get that word out nationally. "From an economic development standpoint," says Higdon, "perception is reality. Period."

When companies look for a "Top 20" city, or one that's home to more than 500,000 people--which many of them do--Louisville will now make the cut. Higdon and other business leaders believe that the city- county merger will end 40 stagnant years by creating the sense that the city finally has regained some ambition. If Louisville can change the entire government structure for 700,000 people, this line of thinking goes, it can shake off its historic complacency and insularity. "We are now looked at as a community that's ready to embrace change," says Rebecca Jackson, Jefferson County's outgoing judge-executive.

READY FOR CHANGE

During nearly a decade as county clerk, Jackson watched as a succession of mayors and county judge-executives pursued conflicting agendas and maneuvered for power. She herself voted against merger in the 1980s but ran for judge-executive in 1998, she says now, in order to make merger happen. She was a major public face of the 2000 campaign, posing for pictures with Louisville Mayor Dave Armstrong, who had hoped to run for the new metro mayor job himself. (He eventually bowed out in favor of Abramson.)

Organizers of the "unity" campaign, as the merger supporters called themselves, also managed to shepherd every living person who had held the mayor or county judge-executive position onto a single stage for a news conference announcing their unanimous support. All this symbolism and political theater were important, because the earlier merger attempts were widely perceived to have foundered in part because they were driven strictly by the business establishment.

Even with so many stars in alignment for merger, however, the key factor was Abramson. Polling--done by consultants hired from both major parties--showed that Abramson's regular public appearances and starring role in television ads made the difference. The new city has a strong-mayor structure, and voters seemed reassured by the near- certainty that Abramson would be the mayor, lending his experience and political skill to the newly elected 26-member metro council, which will be made up overwhelmingly of political novices.

Because his election was a foregone conclusion, Abramson has been planning the transition for months, meeting with citizens in each of the 26 new council districts and strategizing with key decision-makers such as Greater Louisville Inc. and the Louisville Courier-Journal editorial board. Weeks before the November election, outgoing Jefferson County Commissioner Dolores Delehanty said, "People are now talking about 'WWJD'--What would Jerry do? People immediately think, how is this going to fly with Jerry?"

But what does Abramson actually want to do with his home city, now that it has nearly tripled in size and abolished some of its longstanding habits of institutionalized parochialism? Abramson says that the merged city-county governments of the 1960s and '70s-- Nashville, Indianapolis, Charlotte, Jacksonville and nearby Lexington, Kentucky--offer little guidance in putting together Greater Louisville. Those mergers took place before the modern era of information technology and under different public employee union contracts. Suburban growth wasn't as advanced as it is now, meaning issues of drainage, sewer lines and permits are quite different.

A more useful and up-to-date model, Abramson says, comes from corporate mergers. He jokes about meeting with an alphabet soup of CEOs, CFOs and COOs who talked with him about their mergers, how they had done months of preparation and due diligence and when they switched on the lights the first day, it was all a big mess anyway. But their failures were mostly private affairs. Abramson knows he'll make plenty of mistakes, and he knows that each will be treated as breaking news.

TRUCKS AND SQUAD CARS

Still, the city and county seem far closer to being ready for this merger than even supporters of the idea dared hope two years ago. Only a few technical issues, regarding such matters as Social Security and bank forms, actually have to be taken care of the first day, January 6, but city and county departments have proven surprisingly cooperative in planning for the new world they're about to enter, and the public works, information technology, human resources and finance departments are preparing to consolidate as of day one.

Final decisions about the shape and scope of larger government changes will have to wait for the mayor and council to be sworn in, but the outlines of many of those are clear as well. There had been a lot of debate in Louisville whether to follow the Indianapolis model, under which the city and county public safety agencies remain separate, three decades after consolidation, but a police-sheriff merger in Louisville/Jefferson County appears all but inevitable. The current arguments focus on what color the squad cars should be.

But Abramson and the council will have plenty of difficult questions to cope with, such as balancing city-run versus county-privatized emergency medical services, reconciling different pay scales for everyone from custodians and secretaries on up, and negotiating with the different unions that represent public works employees. Abramson always got a laugh during the campaign by comparing the different ways the city and county classify trucks. The city, he says, has 12 separate truck classifications, while the county has only two--big and little. "I like two," he says.

In the beginning, city, suburbs and unincorporated areas will receive essentially the same services they are receiving now. The old city will retain its boundaries as an "urban service district," with higher taxes and more services. Whether people outside the former city limits will come to expect more services, and will be willing to pay more in taxes for them, remains to be seen.

Kentucky's legislature has given the new government five years to work out differences between pre-existing city and county statutes. After that, laws that haven't been reconciled will simply expire. In the meantime, the rules are that if both the county and the old city have a law addressing a given topic, the county law prevails. Where the city has a law and the county doesn't, such as a curfew ordinance, the city law takes effect throughout the county.

In some cases, the differences aren't worth much bother. In September, a Louisville alderman dropped his plan to ban roosters from the city when he realized a county ordinance would soon make his bill redundant. But other differences will matter a great deal, from inconsistencies in tax rates to the fact that the much weaker county housing code, meant for a rural area, will suddenly apply in the city. "The first year is going to be fair chaos," says Mike Herrald, the bank executive, "but the person who goes to the zoo, the person who goes to the library, the person who calls the police with a fender bender, they aren't going to notice the change and, God knows, that's the object."

Even while trying to make good on Herrald's premise, though, and preventing any disruption in core functions, Abramson wants ultimately to bring about real restructuring. When he built the downtown baseball park, during one of his earlier terms as mayor, he visited parks in five other cities and stole the best design elements from each of them. He hopes to do the same thing with ideas for delivering services, combining and experimenting wherever it makes sense to try something new. Abramson told one audience recently that, if the city has 20 garbage trucks and the county has 20 garbage trucks, "and we merge them and have 40 garbage trucks and call it consolidation, we will have missed that opportunity to remake local government."

Driving past the ballpark, Abramson still sounds a little bitter about the trouble he had raising money to build it. He raised millions from private sources, but it took him forever to score the last $3 million he needed because county officials wanted no part of the deal- -even though their constituents would take advantage of the new park, just as they were prime users of a $4 million swimming complex and other facilities that the city of Louisville had built. "I could have built that park a year and a half earlier," the mayor recalls, if it had not been for the jurisdictional rivalry.

After January 6, Abramson will no longer have to wait to get the county to sign off on his favored projects. "We'll have a single public-sector agenda," he says. "We should be able to make economic development decisions faster. That's the hope, anyway."