Where I live, an Australian bank owns the city water system, a stockowner electric company has the power franchise, Cablevision has the cable franchise -- and a lot of money that could profitably be recycled locally gets sent out of town. (We do still own the sanitary sewer system.)
There was a time when these franchises were given to local entities, or held by the community. Then we permitted them to be privatized, and revenue that was once recycled locally now leaves. (Google "The City for the People" for more about this. It showed, among other things, that residents of cities where the utilities were publicly owned paid less for their utilities and workers in those utilities were better paid.)
The short article quoted below makes an interesting point. I'll preface it by quoting California Georgist Harry Pollard, who says that it would be better to collect land rent and throw it into the sea than not to collect it at all. This shows why. It comes from Tax Facts, 1926:
LAND SPECULATOR'S PARADISE
Arthur Brisbane has discovered that Ponca City, Oklahoma, a town of 15,000 population, is free from taxes. Through ownership of the power, light and water departments the city derives sufficient revenue to dispense with all taxes.
But is that an unmixed blessing? Police and fire protection, schools, etc., are so desirable that people will move to places where they may be had. Since no one can enjoy these government services without occupying land, the people will bid against each other till they force the price up to a point where it equals the value of the service. If the people know they will not have to pay taxes they can and will pay that much more for the land.
What a bonanza for the land speculator! He can add to his price what buyers save in taxes.
Economic rent, or land value, attaches to land whether or not the land is taxed. The amount of this land value depends upon the number and kind of people in the community, and must be paid in any event. Should the government take sufficient taxes out of this land value to pay expenses, two results will follow:
- The user of land will pay more than he would if the owner kept it all, as in Ponca City.
- The taking of this tax from the land owner will add to the cost of holding the land idle, and since it falls on all valuable idle land, it will make speculators more willing to make terms with land users.
When the city must pay a stockholder utility for the lights on the streets, who benefits? The taxpayers spend more than they would otherwise need to, and instead of getting electricity at the lowest price, pay a price that benefits the shareholders, few of whom live locally -- and if you've read the "stock ownership" pages linked at left, you know how concentrated stock ownership is, based on the Federal Reserve Board's Survey of Consumer Finances data. (A fine example of trickle-up economics.)
Local communities which own their own utilities would be more likely to care about using clean energy. They'd be creating secure local jobs, and good management would benefit the local community. Accountability.
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