As someone who came of age in the 70s, I remember people questioning the “relevance” of conventional education. It was mostly posturing!
Last night at the council meeting, I, the professor, got the perfect setup for tonight’s class. The city is considering how to finance streetlights. Many communities would just absorb the cost of the lights into the general budget. When that happens, there is no connection betwen benefits received and the cost to a citizen. Last night’s council discussion illustrated how River Falls has worked hard to implement a user fee connected to the benefits received principle. There was also discussion of ability to pay, fairness and efficiency. It was a great illustration of an attempt by a small community to wrestle with a classic problem in public finance.
Street lights are a public good – public goods are difficult to price because non-payers can’t be easily excluded and the additional cost to provide the service to one more person is close to zero.
They did not find a perfect solution – how easy can it be to truly measure benefits received and connect it to an individualized fee? But give the RF council credit for not just burying a service cost in some dark corner of the budget. Most communities would do it that way.