I can speak directly to that. Rhinebeck, NY, the place where I live, has both a village and town government.
The village has about 3,000 people and the town has about 8,000.
Imagine a tiny place with two highway crews and other duplicate town services.
Thankfully we have a merged school district.
People here have said for years that the two “municipalities” should be merged. (Actually the people saying this are those who have moved here within the last 10-15 years. Those who have lived here for generations think every thing works fine as it is.)