Most of the research conducted on government regulation focuses on the federal government. But as a small businessman I know that state and local regulations are the most onerous and generally the most ridiculous. These include complicated labor regulations, difficult and cumbersome licensing requirements, and operational rules that are often contradictory and seem to come out of thin air. For example in New York I basically have to give employees unlimited sick leave, I have to pay a license fee for an air conditioning unit that is not even part of my office, and I can’t legally purchase Twinkies for my staff because they have trans-fat in them.
Just this month, the City of Seattle issued regulations that force their population (both homeowners and businesses) to cling to their food scraps as if they were gold. Why a city would want to force people to indefinitely hold on to putrescible garbage in their homes and businesses seems strange, but hey this is Seattle.
Residents of Seattle Could Face $1.7 Billion in Fines From One Misguided Regulation
Seattle’s City Council passed “feel-good” regulations this month in order to encourage the population to recycle nearly three-quarters of their food wastes. The reason given for this is to reach an arbitrary goal for recycling municipal solid waste in the city. Under the provision – which was passed unanimously by the 9-member City Council – all firms and households would be forced to compost all of their putrescible food wastes or face hefty fines. In addition, all businesses and households are required to recycle all paper. While there are exemptions that can be made by the City’s Director of Public Utilities, in effect every household and business in Seattle is expected to abide by this complicated – and somewhat onerous provision.
If there were a reason behind such an ordinance, charging a homeowner as much as $5,200 a year for throwing out apple cores and scrap lettuce might make sense. For example if Seattle were say like Iceland and built on a rocky island with no place to put waste, or were the Pacific Northwest not filled with peat, soil and other mediums where stuff could grow and there were a need to hold onto every organic compound, then maybe government should encourage the hoarding of putrescible materials. However, Seattle is built on swamp, forest and dirt. There is plenty of space to put solid waste and there is no reason to encourage the composting of soil in one of the most fertile parts of the country.
In reality, Seattle’s City Council unanimously passed this regulation because household recycling has taken on almost magical religious properties among some parts of society, and it seemed like a politically correct thing to do.
If businesses and residents don’t actually want to spend their days hanging around with a bunch of rotting food waste, the City could reap a huge windfall in fines. Assuming that waste is picked up an average of twice a week and both homeowners and businesses are charged $50 each time an apple core is thrown out, the City would fine its residents $1.7 billion a year, or about $2,600 per person.
Even in a place as crunchy as Seattle, residents would likely balk at something like this, so maybe only large businesses would be fined. Even then the costs would be substantial. There are about 12,280 firms in Seattle with 5 employees or more. Fining just these firms would lead to $63.8 million in additional business expenses.
One problem with local ordinances is that decision makers rarely have access to good information about the real costs of the regulations they are proposing. They make decisions based on emotion, panic, or just on what sounds good. In this case, it seems as if Seattle’s City Council did not think through the cost of their proposal, or they figured that they would pass a law and then not enforce it – or selectively enforce it. This is bad policy. There is always a cost to regulation, a cost that is passed on to consumers and homeowners. In this case, the cost could be over a billion dollars. Over regulation is one of the greatest problems facing business in America today, and governments that put feel-good laws on their books are not helping.
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