Buying our local water system will bring economic benefit to the city of Claremont, if we apply the thinking of USC law professor Edward D. Klein-bard in his new book, "We Are BetterThan This: How Government Should Spend Our Money".
In last Sunday’s Los Angeles Times, a financial article by Michael Hiltzik explains the idea that increased government spending is always progressive, benefiting middle- and lower-income people more than the wealthy. These workers also spend their money mostly near home, building a more robust middle class and improving the productivity of the economy. Their spending reverberates throughout the local economy, benefiting us all. Mr. Hiltzik says this viewpoint is both moral and farsighted. He quotes Mr. Kleinbard: “Because our national fiscal debate focuses on taxation rather than spending, we’re debating the wrong question. We ask how much pain we want to inflict on ourselves, and the answer is always ‘not very much.' The question should be what useful things can we do together by way of investment and insurance to enhance outlives—and how much of that can we afford?” His answer is that we can afford much more than we spend today. That’s because the return on government outlay is excellent, yet almost always ignored when the dollars and cents of fiscal policy are under discussion.
Now, apply this idea to Claremont’s purchase of the water company. We spend more than $8 million in rate payments to Golden State, over and above what we would spend if we paid rates similar to our neighboring cities. Golden State is milking this small town of $8 million a year for very high salaries for a few top executives, for dividends to persons owning stock listed on the NY stock exchange, and for federal taxes. Now they have earmarked a million dollars of our money for their campaign to keep us from stopping that flow of our money. We could spend it paying off the bonds.
Benefits, however, go much farther. Operating the local water company—whether managed in cooperation with La Verne or not—will be employing local workers at reasonable salaries to manage and run our water delivery system. We now pay those management costs to Golden State but, without transparency and local input, we do not reap the same benefits in the labor force. From this point of view, when Measure W is passed, it makes little difference whether you call this money collected a “tax” or a “financial fee.” In both cases, it stays in California; its workers are our neighbors and their employment and presence strengthen our local economy.
Local ownership, local management and local control with fairer rates set in our full view will enhance our local economy now, and even more during the lifetime of our children. Owning our water company will work for the economic benefit of the whole community. We need to pass Measure W for its economic benefit.