Republicans often question whether environmental regulation offers significant social benefits. A recent fire at a New York City sewage treatment plant offers a nasty natural experiment. The fire knocked out some of these treatment plants and the local rivers are now filled with poop. As reported by the New York Times, the Clean Water Act has significantly contributed to the “greening” of NYC as it provided the $ to pay for the sewage treatment plants.
An interesting urban public finance issue arises here. If the Clean Water Act had not provided funds for constructing high quality sewage treatment plants, would NYC have used its own local tax revenue to finance these investments? Given that such investments raise local quality of life (and hence local real estate prices) should they be financed using federal $? Is North Dakota subsidizing Don Trump and Derek Jeter’s exciting lifestyle?
Here is a good CBO report providing some historical details about federal involvement in local water issues.