Earlier this month, Philadelphia’s Mayor Nutter proposed increasing the city’s trash collection fee to $300 to deal with the city’s budget deficit. Instead of finding ways to be more efficient or cutting wasteful spending, the Mayor is increasing the cost of a public service.
Philadelphia charges their residence a fee for waste collection services, but, unlike many other municipalities, the revenue collected goest directly into the general fund, and the city then appropriates money for municipal waste services.
This system provides no financial incentive for the waste service provider to develop cost-cutting improvements because they do not have control over their own finances.
Leonard Gilroy from the Reason Foundation states, “If government is providing this service, it has an obligation to provide it in the most efficient way possible,” something Philadelphia is failing to do. Cities that have privatized trash services saw savings between 20% – 40%. The private sector has financial incentives to control their costs and be more efficient (Gilroy notes how Philadelphia’s trash collection methods are what private vendors moved away from decades ago).
The city’s trash service should be put up for competitive bidding to insure residence are getting the most for their money.