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You realize that it is possible to pay for water infrastructure from taxes, without directly charging for water usage, right? The reason this is a problem (as

You realize that it is possible to pay for water infrastructure from taxes, without directly charging for water usage, right? The reason this is a problem (as stated in the article you linked) is because the federal government has slashed funding, not because the government is bad at setting prices; the only reason to interpret it in that way is if you are looking to privatize the water infrastructure.

ip26 7y ago
That's a rather uncharitable interpretation. Your parent may just feel like people should pay for the water they use, and not for the water they don't. Which only works properly if the pricing is set right. See complaints about how rooftop solar customers don't pay their fair share of fixed grid overhead. Wouldn't be a problem if you billed people an accurately priced fixed charge, plus usage charge.
- ilikehurdles 7y ago
  On that very different topic... Complaints almost exclusively from local privatized electricity monopolies. The US residential solar footprint is a drop in the ocean compared to central European nations (thinking Germany in particular). Public utilities see reduced reliance on their service as a success, while for-profit utilities see it as a threat.
  - colechristensen 7y ago
    The US isn't Germany. Our population density is very much lower so transmission costs per connection are very much higher. I grew up in an area where the length of transmission line per home would easily have been calculated in miles. I currently live in an area where transmission line per home would be measured in feet or maybe inches.
    - hannasanarion 7y ago
      The population density is pretty much the same if you ignore the plains states and other extreme rural areas, who get their water from wells anyway. A city of a million people is a city of a million people, regardless of whether your country contains the Rocky mountains or not.
- JustSomeNobody 7y ago
  What will happen is like what happens in Florida with schools. People retire here from other states then complain/refuse/lobby/vote/etc about taxes going to schools. They say they're retired and they've already paid for schools in their previous state and their kids are grown and they should not have to pay.
- mikepurvis 7y ago
  Pretty sure the issue with utilities is that basically the entire cost is the fixed part. The incremental cost of delivering a few thousand litres of water each day to any one house is effectively zero. Even worse, the fixed cost varies enormously depending on the particulars of any one residence (older infrastructure costs more to maintain, for example). So it's really hard to come up with a truly fair scheme for distributing these costs— pretty much no matter what you do, some households will be subsidizing other households. If not on their water bill, via their income taxes.
  - ip26 7y ago
    You can very reasonably turn e.g. a damn or a water treatment plant into a usage charge. Say you want to pay it off in thirty years. Divide the cost by thirty & project the annual quantity of water it will provide. Set the rate to match. The true(st) fixed costs are things like the last mile to your house, that only you benefit from.
    - smileysteve 7y ago
      If you had done that 30 years ago, you'd likely be a little short though, as consumer demand for water has in many cases shifted to bottle water. Though, i suppose showering habits have changed. Oh, but toilet flush and low flow stuff has happened to everything.
      - crazypyro 7y ago
        https://www.usgs.gov/special-topic/water-science-school/science/trends-water-use-united-states-1950-2015?qt-science_center_objects=0#qt-science_center_objects https://www.usgs.gov/special-topic/water-science-school/scie... Public supply usage hasn't changed meaningfully for a few decades.
        armenarmen 7y ago
        That’s really surprising! Population more than doubled in that timeline and usage went up by way less, and per person water use is even more dramatically down in the past few decades
rayiner 7y ago
The model that has universally been adopted in the US (and in most of the developed world), is based on usage fees. And that requires the government to set prices. (For reasons that have nothing to do with privatization. Almost all water infrastructure in the US is publicly owned and maintained.) And because the government is bad at setting prices, that model has resulted in failure, at least in the US. One can imagine a different model, which does not require the government to set prices. But that doesn’t mean the government isn’t bad at setting prices. And it would be a dramatic and fundamental change to the wide variety of government services based on usage fees. There are also intensely good reasons to have usage fees. Otherwise, you encourage waste and sprawl. Federal funding is a red herring. Water is an archetypal municipal issue, like local roads. The federal government has targeted programs for disadvantaged communities, but in general cities (and certainly states) should be able to handle their own water and sewer systems.
- erikpukinskis 7y ago
  The price doesn’t need to match the cost though. Government can set a price to maximize social benefit, and then cover the difference in cost with taxation.
  - culturestate 7y ago
    This is how it works where I live; after subsidies (which are automatically deducted from the bill) I pay about US$20 per year to the water supplies department.
  - rayiner 7y ago
    That begs the question. The government has no idea what price "maximizes the social benefit." The government is incentivized to set prices artificially low, not to maximize the social benefit accounting for externalities and long-term requirements.[1] For example, the government has a strong incentive to make connection charges artificially low, which lowers the price of new houses. But that also encourages sprawl--making it artificially cheap to expand into new land that isn't already part of the water/sewer grid. [1] You see similar problems in governments determining public pension contributions. That's effectively the government setting a price required to buy into a pension system that guarantees certain benefits. Governments universally set that price too low, resulting in the public pension disaster we have today.
deleted 7y ago
[deleted]

ip26 7y ago

That's a rather uncharitable interpretation. Your parent may just feel like people should pay for the water they use, and not for the water they don't. Which only works properly if the pricing is set right. See complaints about how rooftop solar customers don't pay their fair share of fixed grid overhead. Wouldn't be a problem if you billed people an accurately priced fixed charge, plus usage charge.

ilikehurdles 7y ago
On that very different topic... Complaints almost exclusively from local privatized electricity monopolies. The US residential solar footprint is a drop in the ocean compared to central European nations (thinking Germany in particular). Public utilities see reduced reliance on their service as a success, while for-profit utilities see it as a threat.
- colechristensen 7y ago
  The US isn't Germany. Our population density is very much lower so transmission costs per connection are very much higher. I grew up in an area where the length of transmission line per home would easily have been calculated in miles. I currently live in an area where transmission line per home would be measured in feet or maybe inches.
  - hannasanarion 7y ago
    The population density is pretty much the same if you ignore the plains states and other extreme rural areas, who get their water from wells anyway. A city of a million people is a city of a million people, regardless of whether your country contains the Rocky mountains or not.
JustSomeNobody 7y ago
What will happen is like what happens in Florida with schools. People retire here from other states then complain/refuse/lobby/vote/etc about taxes going to schools. They say they're retired and they've already paid for schools in their previous state and their kids are grown and they should not have to pay.
mikepurvis 7y ago
Pretty sure the issue with utilities is that basically the entire cost is the fixed part. The incremental cost of delivering a few thousand litres of water each day to any one house is effectively zero. Even worse, the fixed cost varies enormously depending on the particulars of any one residence (older infrastructure costs more to maintain, for example). So it's really hard to come up with a truly fair scheme for distributing these costs— pretty much no matter what you do, some households will be subsidizing other households. If not on their water bill, via their income taxes.
- ip26 7y ago
  You can very reasonably turn e.g. a damn or a water treatment plant into a usage charge. Say you want to pay it off in thirty years. Divide the cost by thirty & project the annual quantity of water it will provide. Set the rate to match. The true(st) fixed costs are things like the last mile to your house, that only you benefit from.
  - smileysteve 7y ago
    If you had done that 30 years ago, you'd likely be a little short though, as consumer demand for water has in many cases shifted to bottle water. Though, i suppose showering habits have changed. Oh, but toilet flush and low flow stuff has happened to everything.
    - crazypyro 7y ago
      https://www.usgs.gov/special-topic/water-science-school/science/trends-water-use-united-states-1950-2015?qt-science_center_objects=0#qt-science_center_objects https://www.usgs.gov/special-topic/water-science-school/scie... Public supply usage hasn't changed meaningfully for a few decades.
      - armenarmen 7y ago
        That’s really surprising! Population more than doubled in that timeline and usage went up by way less, and per person water use is even more dramatically down in the past few decades

rayiner 7y ago

The model that has universally been adopted in the US (and in most of the developed world), is based on usage fees. And that requires the government to set prices. (For reasons that have nothing to do with privatization. Almost all water infrastructure in the US is publicly owned and maintained.) And because the government is bad at setting prices, that model has resulted in failure, at least in the US. One can imagine a different model, which does not require the government to set prices. But that doesn’t mean the government isn’t bad at setting prices. And it would be a dramatic and fundamental change to the wide variety of government services based on usage fees. There are also intensely good reasons to have usage fees. Otherwise, you encourage waste and sprawl. Federal funding is a red herring. Water is an archetypal municipal issue, like local roads. The federal government has targeted programs for disadvantaged communities, but in general cities (and certainly states) should be able to handle their own water and sewer systems.

erikpukinskis 7y ago
The price doesn’t need to match the cost though. Government can set a price to maximize social benefit, and then cover the difference in cost with taxation.
- culturestate 7y ago
  This is how it works where I live; after subsidies (which are automatically deducted from the bill) I pay about US$20 per year to the water supplies department.
- rayiner 7y ago
  That begs the question. The government has no idea what price "maximizes the social benefit." The government is incentivized to set prices artificially low, not to maximize the social benefit accounting for externalities and long-term requirements.[1] For example, the government has a strong incentive to make connection charges artificially low, which lowers the price of new houses. But that also encourages sprawl--making it artificially cheap to expand into new land that isn't already part of the water/sewer grid. [1] You see similar problems in governments determining public pension contributions. That's effectively the government setting a price required to buy into a pension system that guarantees certain benefits. Governments universally set that price too low, resulting in the public pension disaster we have today.

deleted 7y ago

[deleted]