Citiwire.net

For Release Sunday, February 21, 2010
© 2010 Washington Post Writers Group

WASHINGTON — The tea party crowd has it dead wrong. We don’t need smaller government, we need smarter government that can look ahead, saving us crises and billions of dollars in the process.

A prime example: this winter’s record-breaking snow storms that left the Nation’s Capital region, due to insufficient snow-clearing equipment, immobilized days on end, at humongous cost to citizens, governments and private businesses.

Appalled at the inefficiency, Washington Post business columnist Steven Pearlstein came up with an intriguing idea: Why not require everyone in the D.C.-Maryland-Virginia metro region to sign up for “snow insurance”?

Sure, it would cost something. Homeowners might have to pay $25 a year, businesses an average of $2,500. With the cash, local governments would guarantee no disruption of work or school after snowfall up to one foot, perhaps 36 hours maximum for a bigger storm.

Even if monster storms hit just every few years, the math works. The recent storm surge cost the federal government at least $400 million–$100 million a day–in lost productivity. Private businesses and jobs were hit hard–the overall loss to the region was likely close to $5 billion.

Yet with a “snow insurance”-funded extra $75 million a year, deployed to finance added manpower and technologically advanced snow removal equipment, the blow would have been dramatically less. Businesses would have stayed running, schools open. Government would have saved dramatically. Hourly workers would have been spared the bitter reversal of losing pay when they couldn’t reach work.

But just push snow insurance seriously, Pearlstein noted, and Republicans would castigate it as “the biggest tax increase in history.”

Yet the fact is–snow removal’s just one of thousands of potential smart, money-saving government moves. Environmental markets specialist Albert Appleton produced a slew of think-smartly-ahead ideas for thinking ahead at a recent New York conference on sustainable city finance, cosponsored by the Urban Age Institute and New York Academy of Sciences.

As New York’s environmental protection commissioner in the early ’90s, Appleton recalled, there was real danger that agricultural runoff in the Catskill Mountains would imperil the city’s legendarily clear waters, supplied from Catskill reservoirs.

There was an obvious “high tech” solution: build enormous water filtration plants. But they would have cost about $6 billion, triggering rocketing water and sewage rates for New York taxpayers. So Appleton chose another strategy–to make the Catskill farmers stewards of the watershed. Predictably, the upstate farmers bristled at the big city’s suggestions to limit pathogen and nutrient runoff from their operations. City demands would destroy their way of life, they claimed. So the solution: the city agreed to address the farmers’ concerns and paid for cleanup and safeguarding measures also designed to economically strengthen Catskill farming.

Not only has the Catskill environment improved, says Appleton, but “we have protected the champagne of drinking water for the future.”

And after that incident, he adds, whenever he saw audiences’ “eyes glaze over” when he made a pitch for environmental protections, “all I had to say (was) it’s like the watershed program–it’s cost-saving pollution prevention.”

Now, he insists, it’s time to scratch the 20th century one-issue-at-a-time, regulatory approach to environmental concerns. And to fix perverse incentives. A utility’s emissions, for example, easily cause asthma and other illnesses. But what’s the benefit to the company’s bottom line if it installs superior scrubbers or substitutes cleaner fuels?

Alternatively, Appleton proposes government should design market rewards for pollution-reducing measures–switching increasingly to “green” power and energy conservation. The goal should be an overall cleaner environment, through multiple steps, by diverse players, across entire watersheds.

Government spending choices need careful scrutiny, too he suggests: “Green energy is supported today mostly by subsidies. But that’s economically inefficient when we also continue to subsidize coal, oil and natural gas.” Costs for wind, solar and the like are now “within striking range” of fossil-based fuels, he adds. He sees fair economics as the route to greener power.

Plus, Appleton stresses, taxes should reflect true costs. To replace property taxes now facing widespread public revolt, he’d institute a “land services use tax” –the actual proportionate costs the public has to pay to support a piece of property, from roads to water lines to sewers to lighting to police protection. Compact, in-town and physically closeby developments would be the economic winners–not scattered home and office sites which actually cost far more to reach and service.

(A parallel innovation–the Henry George-era idea of putting local property taxes on the value of land, not buildings–has been tried sporadically over the years, with positive results in such cities as Pittsburgh. Proponents say its an incentive to clean up abandoned, vacant or rundown properties, benefiting cities, stimulating economic development in the process. The Lincoln Institute of Land Policy recently published a report detailing experiences of nations and cities that have tried the land value tax.)

So what does a “snow tax” have to do with funding for water supplies, pollution prevention, green energy and a fairer way to impose land-based taxes? Each of the steps could lead to higher productivity, a better environment, smarter and more nimble cities and regions, and ultimately more, not less, disposable cash for citizens.

Of course some experiments might founder. The political hurdles are huge. But aren’t we smart enough to at least try?

For reprints of Neal Peirce’s column, please contact Washington Post Permissions, c/o PARS International Corp., WPPermissions@parsintl.com, fax 212-221-9195. For newspaper syndication sales, Washington Post Writers Group, 202-334-5375, wpwgsales@washpost.com.