They Didn't Start the Fire, But Should Have Put it Out

Last week, firefighters let a home burn because a resident failed to pay his town services fees. But there's a better way to make residents pay up in the future.

I pity poor Gene Cranick, the rural Tennessean whose house burned down because he failed to pay the $75 fee required to receive firefighting services. I pity the South Fulton town fathers, who came up with one of the most lamebrained revenue enhancement ideas of all time. All so unnecessary. Had more thought gone into the idea, Mr. Cranick’s house could have been saved, as could have South Fulton’s fee-for-essential-service idea.

I’m not completely adverse to disaggregating public services. Sometimes (road fees, for instance) they can serve as useful price signals. But, there are limits. If you disaggregate essential life support services -- EMS, police, fire -- you threaten to destroy the essence of a community and turn citizens into customers. Heck, in a community we are all free-riders at some point; trying to balance every account to the penny bespeaks an unbecoming parsimony. And, denying service to a free-rider affects the community as a whole: How happy do you suppose Mr. Cranick’s fee-paying neighbors are to have a value-destroying, burned-out hulk occupying the lot next door? And while their homes are worth less, their property taxes are going up, because the tax base is no longer supported by the Cranick residence. I’ll bet their fire insurance premiums are going to rise, too. Here’s a good general rule: If giving service to a free-rider will destroy your business model, and denying service will be a PR nightmare, don’t disaggregate the service.

So what’s the solution for those communities dead-set upon disaggregation? A two-tiered fee system. If you sign up in advance, you pay $75 per year. On a per-call basis, the fee is substantially higher -- say, $750 per incident. A familiar concept, instinctively understood and accepted by most everyone. Publicize it widely, and remind non-subscribers of the fee when they call 911 for help. To be fair, accept payment by cash, credit card, check, property lien, even an I.O.U.  And when the firefighters show up, don’t just collect the $750 -- strike while the iron is hot and sign ‘em up for the yearly service. If a municipal body wants the market to solve its financial problems, its administrators have to think like retailers.