TRASH BAD GARBAGE LEVIES
August 17, 2005
Recently, the City of Kingston in Ontario, Canada voted to "equalize" fees for garbage collection, but according to the city, "equalize" means charging for garbage collection based in part on the assessed value of one's house, says Filip Palda (Fraser Institute).
Kingston aldermen presented their tax hike as an exercise in balanced redistribution, but neglected to explain how this would change the City's revenues. This manipulation of garbage levies is an example of how politicians twist the good idea of paying to use city services, says Palda:
- With the garbage levy, Kingston has a two-part pricing system for collection -- citizens pay both a per-bag fee and the fixed levy, which is supposed to cover the fixed costs of the system.
- This system is economically sound as long as the parts are set in proportion to the fixed and variable costs of providing the service, says Palda.
- However, the garbage levy goes into general revenues and may exceed what the city spends on garbage collection.
To discourage garbage generation, the city council will have to increase per-bag fees and lower fixed costs, says Palda.
Source: Filip Palda, "Trashing Bad Garbage Levies," Fraser Forum, June 2005.
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