Supreme Court Ruling Threatens Privatization

Several weeks ago the U.S. Supreme Court ruled that local governments can compel private waste haulers to use municipal owned facilities. In the case of United Haulers Association v. Oneida-Herkimer Solid Waste Management Authority (05-1345), the justices voted 6-3 to uphold so-called “flow control” laws or ordinances that municipalities have used to assure a steady waste and revenue stream into publicly financed waste facilities. The ruling partially overturns an earlier finding in Carbone reached back in 1994. There, the Court ruled that trash was subject to the Commerce Clause of the Constitution and therefore protected. The ruling in Oneida skirts this because the facility in question is publically owned. Given this, its likely to encourage other municipalities to introduce flow control — indeed, its already happening. Not only will prices get jacked up (absent competition, local governments can raise rates significantly — in the case the local fee was three times the out of state charge, and more than $20/ton more than the weighted average of facilities within a 100 miles) but incentives for private investment/operation of landfills will be threatened. Do you recall the “garbage crisis” of the 1980’s, when the forlorn garbage barge, full of New York city’s trash, cruised up and down the East Coast looking for somewhere to dump its load. While it littered the headlines a decade ago, you hardly hear about it anymore. In fact, the “crisis” of insufficient landfills went away, almost unnoticed, and the nation now has more landfill space than ever before. Thanks to a government program? Nope. It was privatization that made a difference — largely spurred by the USSC rulling against flow control in Carbone.

Geoffrey Segal is the director of privatization and government reform at Reason Foundation, a nonprofit think tank advancing free minds and free markets. He is also editor of Reason's Privatization Watch.

Segal recently served as an advisor to Florida Gov. Jeb Bush's Center for Efficient Government. In addition, his counsel has recently been sought out by Gov. Mark Sanford and Indiana Gov. Mitch Daniels, where he is working with the Government Efficiency and Financial Planning group inside the Office of Management and Budget. Segal is also an advisor to the Cost Cutting Caucus in the Virginia House of Delegates.

Segal is a highly skilled policy analyst with a strong, diversified background in policy research and project analysis focusing on public-private partnerships, competition, government efficiency, government spending and waste, transparency, accountability, and government performance.

Segal has worked closely with legislators in California, New York, Florida, Indiana, Virginia, Pennsylvania, Georgia, Illinois, Oregon, Kentucky, Ohio, Washington D.C., Colorado, Minnesota, Maryland, Maine, North and South Carolina, Hawaii, Arizona, and Texas in efforts to reduce government spending, improve government performance, and enhance accountability in government programs.

Segal has testified to the United States Senate and numerous state legislatures and agencies. He has written dozens of articles for leading publications including Investor's Business Daily, Atlanta Journal-Constitution, Indianapolis Star, Orange County Register, Los Angeles Daily News, and New York Sun. Segal is also a contributing editor to Budget & Tax News. A frequent guest on television and radio, he has appeared on Fox News Channel's "Your World with Neil Cavuto" as well as CNBC's "Closing Bell w/Maria Bartiromo" and "Power Lunch."

Segal earned a B.A. in Political Science at Arizona State University and a Master of Public Policy from Pepperdine University.