Flow control an unfair government monopoly

01/29/2013 9:11 AM

01/29/2013 9:12 AM

What if you were a small business owner who spent thousands of dollars and months of your time to obtain a state permit and construct a facility to manage construction waste for a regional area of the state only to have a county decimate your business by enacting an ordinance requiring all the waste within that county go to a county-owned facility?

What if you were an employee of that small business who lost your job because of the financial harm to that business caused by the county’s ordinance?

What if you were the owner of a construction company whose costs of doing business went up because the county’s ordinance required you to use the county’s disposal facility rather than continue to use a lower cost option in the private sector?

These are real-life situations resulting from the “flow control” ordinance enacted by Horry County in 2009. They are why I support statewide legislation to prevent counties from enacting such ordinances. A flow control ordinance is a county ordinance which requires a citizen, a business, or an industry to use a waste facility owned by that county or another publicly-owned facility designated by the county. Flow control ordinances create government-owned monopolies which can charge above-market prices because customers are prohibited by law from using a competitor.

A flow control ordinance is unfair because it enables a county to be both a participant and a regulator in the same market at the same time. The county can use its governmental powers to eliminate its competitors with little notice, causing grave economic harm to private businesses.

Flow control is thus at odds with the “business friendly” environment that Horry County is trying to project to spur economic development and job creation.

In the 2012 session, the South Carolina House of Representatives overwhelmingly passed legislation to make clear that flow control ordinances are inconsistent with the state’s Solid Waste Act. State law encourages use of both public and private service providers and has established a regional approach to determine need for solid waste management facilities. This session, the same legislation was reintroduced by Rep. Kenny Bingham from Lexington County. I supported the bill in 2012 and plan to do so again.

I am in favor of a free market system which enables all participants in that market, whether they are publicly or privately owned, to compete on a level playing field. Competition is the best way to ensure that South Carolina citizens, and Horry County citizens in particular, get quality services at the lowest price. Simply put, monopolies generally cause prices to go up, and competition causes prices to go down. Horry County’s monopoly on waste disposal has already resulted in price increases for many businesses needing to process or dispose of construction debris. When business costs go up consumer’s costs also rise.

Horry County, in my view, has never offered a compelling reason why a flow control ordinance is needed. The Solid Waste Authority operated successfully for many years without a flow control ordinance. Even if flow control is eliminated, the authority will still retain the vast majority of its solid waste volumes because the cost of transporting the waste to another landfill is prohibitive. The authority could lose some construction debris volume to private competition but only if the authority refuses to be more competitive in its pricing. So any argument that the authority will be hurt by loss of revenue -- and cannot support its various programs -- simply does not hold water.

Finally, I have heard the allegations that eliminating flow control will open up Horry County to out-of-state waste. This is nothing more than a scare tactic. The authority has the ability, like any private company, to decide with whom it will do business. The authority’s practice has been not to accept out-of-county waste, let alone out-of-state waste, and that decision will continue to be left up to the authority and Horry County Council.

Contact Clemmons, a Republican who represents Myrtle Beach in the state House, at alanclemmons@schouse.gov.

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