What is considered a “public good?”

The “Great Recession” has forced many governments to take a look at the services they provide and determine whether or not they should continue providing those services. Many times, these discussions are centered on what are truly public goods and thus a necessary component of government operations. I think I greatly underestimated this discussion until I heard about a story out of Tennessee which sparked a national debate.
An Obion County resident had decided to forgo paying for the annual $75 fire service fee – insurance, so to speak. You see, Obion County does not provide fire services to its rural residents (outside the city limits); local municipality South Fulton provides fire protection via fee for service to rural Obion residents. This is done as opposed to a tax levy whereby all residents of Obion would receive fire services. Well, one family recently learned the consequences of not paying that fee.
On September 29th, a fire started at Lance Cranik’s house. Once detected, he quickly called 911 and was told that fire crews would respond shortly. Ten minutes later Lance found out that the fire department would not be responding because the family had not paid their fee. The fire department did show up but only to ensure that nearby houses (where their owners had paid their fee) did not succumb to the Cranik fire. The Cranik’s offered to pay the fee on the spot but were rejected and thus, lost nearly everything, including family pets. The irony of the situation was that this was not the first time the Craniks forgot to pay their fee and were victims of fire. A few years back a chimney fire threatened a son’s home. The fire department responded anyways and the family paid up the next morning.
The situation has sparked a national debate on whether or not the fire department (or at the very least – the responding firemen) did the right thing. Unfortunately, it is not a black and white issue. I wonder what would have happened if the firemen decided to respond despite the order not to and a fireman was injured? Isn’t it likely that the workman’s comp claim would be denied? Others challenge that it is like car insurance – since when does Allstate allow individuals to buy insurance after an accident?
This debate has been raging in Obion for the last 20 years. County Commissioners voted on 10/18 to hold a referendum in February 2012 to determine whether or not this service should remain as a fee or to implement a fire tax. At a basic level, this is a discussion of public goods. “Public good” was first coined by Paul Samuelson in 1954 as “…[goods] which all enjoy in common in the sense that each individual’s consumption of such a good leads to no subtractions from any other individual’s consumption of that good…” (Wikipedia, Public Good). Simply put, a public good is a good that is non-rivalrous and non-excludable. Is it possible for a fire to be excludable? In rural areas where there is a distance between properties it is possible.
With the budget constraints that many jurisdictions are facing, excluding services such as fire protection, are certainly decisions that many are contemplating. There is a fine line here – who’s responsibility is it?

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One response to “What is considered a “public good?”

  1. PhillyInCA

    This reminds me of Augustus, before he became named as such. If a fire would start within the city of Rome he would bring his servants and tell the owner that he would put out the fire, if the owner would sell the property at a greatly reduced price. By doing this over and over, and for other reasons, he became the wealthiest land owner in Rome.
    Two things strike me, first is that someone checked the billing status before the firemen arrived at the house. I begin to wonder how the system works, who verifies the accuracy of the list? Second, is the city truly saving money? The firemen had to stay on the scene, to supposedly watch the protected houses. What if the houses on two sides catch fire. Do the firemen prioritize by who paid first? I agree with worker’s compensation issue, but couldn’t the county bill the homeowner after the fire was put out? Perhaps even make some sort of deal where prepayment of $75 yearly or $550 for each call.
    As a homeowner, the last thing I want is to sit and watch my neighbors house burn down and wonder if mine is next.

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