The below notes a specific community in Pennsylvania, but it could be anywhere in these United States.
In an era when partisans of both stripes spend the majority of their time tripping over themselves to adhere to the right wing orthodoxy of maximizing consumer choice and tax cuts, it’s worth noting the negative effect both can have on public welfare. Thanks to basic governmental mismanagement and a general disregard of economic knowledge relating to the rather pedestrian issue of trash collection, tax cuts and consumer choice cost the average residential Tredyffrin Township property tax payer more than $15 per month.
First let’s look at the basic economics of the issue. Trash collection, like many community services, is a natural monopoly. It simply is more efficient (read less expensive) to have a single service provider rather than multiple providers handle trash collection. Moreover, there would be less traffic and pollution with a single trash collection company cruising the streets rather than the 4 or more companies doing so now. For the sake of argument, let’s assume a 10% savings per household if one company had the contract for the entire township (although the savings would likely be greater, roughly 33% to 60% less expensive). Since we lose the innate efficiency of a natural monopoly, choice here actually causes higher prices.
Of course, the most laughable aspect of current trash collection policy is the notion of consumer choice. The township notes on their website, Tredyffrin Township offers residents the option to select from a variety of waste haulers that operate in the Township to collect trash and recyclables. If you’re not insulted by this statement, you ought to be. When purchasing a service like trash collection, (as well as electricity) the ability to choose a provider is meaningless; it simply is not a complex consumer purchase fraught with the reasonable consumer concerns of style, durability and operational complexity, among others. Residents care only that the trash is picked up as inexpensively as possible while disposed of in a hygienic manner. Nobody cares who collects their trash, nor is great pleasure derived in making their trash collection choice (shopping for trash collectors is NOT the same as shopping for a new suit of clothes). Is it really necessary to remind consumers that purchasing a trash collection service is not like buying a car, a new suit or wide screen TV? The American public was sold a bill of goods where consumer choice is concerned; assuming the consumption of ANY good or service involves a complex decision process.
The larger part of this ridiculousness is that the collection fee is not part of our property taxes. If it were, the fee would be deductible from our federal taxes (for those of us who itemize, which would be just about anyone with a mortgage). And as with any deduction, the higher your federal tax bracket, the larger your discount.
This cannot be news (or at least it should not be) to township supervisors in any Pennsylvania community. One can only assume the rationale for this policy can be summed up in 2 simple words; political cravenness. The advantage to the current system lies completely with Tredyffrin Township Supervisors who get to say they are keeping your taxes low, even while it costs you money. We simply live in a day where formulating public policy for the sake of private profit (multiple trash companies) overrides public welfare; with politicians too obtuse or cowardly to manage government in a way that benefits the public they purport to serve.