Ending the Western Water Game

Last week, Senator McCain upset a lot of people in Colorado when he mused about renegotiating an agreement that allocates water usage from the Colorado River to various interests in the West.

The 86-year-old water compact says that Arizona, Nevada and California can take 7.5 million acre feet of water from the river annually. The rest is split among Colorado, Utah, New Mexico and Wyoming. The four up-river states worry that the more populous southerly trio would use a renegotiation to quench its ever-increasing thirst at their expense.

The intesity of feeling about water is strange to those of us from the eastern portion of the United States, where water is so abundant that a staggering number of dams are used simply to prevent downstream flooding. Pittsburgh, for example, receives 3.1 inches of precipitation per month on average with a July high average of 3.8 inches and a February low of 2.4 inches. Denver averages 1.3 inches and ranges from 0.5 to 2.4 inches. Other Colorado River users include Las Vegas (.37, 0.1-0.5) and Yuma (.28, 0.0-0.6). Water is scarce in the West, and scarcity breeds conflict, as Mr. McCain recently discovered.

As long as water resources are allocated by political methods, their allocation will be insecure and subject to intense feelings. But this compact was finalized in 1922, and water needs have clearly changed since my grandmother was born. Water is too expensive in some places and too cheap in others.

An ideal solution would not only allow water to flow (physically and metaphorically) to its highest-valued use, but it would also draw the political venom out of the issue. The answer seems obvious: convert historical water allocations into water rights that can be bought and sold in normal markets. The rights must granted to individuals and businesses, and state governments must be prohibited from owning them.

This system would not force anyone to give up their water, but if they decide they're better off selling or leasing all or part of their right, they would be free to do so. Nothing would prevent conservation groups from purchasing the quantities of water to ensure ecosystem preservation goals.

Waste and inefficiency would be greatly reduced, users would have true choices, and the issue would be much less contentious. Propose that, Senator McCain!

Alabama's Health Transformation

From the Associated Press last week:

Alabama, pushed to second in national obesity rankings by deep-fried Southern favorites, is cracking down on state workers who are too fat.

The state has given its 37,527 employees a year to start getting fit -- or they'll pay $25 a month for insurance that otherwise is free.

Alabama will be the first state to charge overweight state workers who don't work on slimming down, while a handful of other states reward employees who adopt healthy behaviors.

Alabama already charges workers who smoke -- and has seen some success in getting them to quit -- but now has turned its attention to a problem that plagues many in the Deep South: obesity.

There's nothing wrong with people having the incentives to be healthy, but this proposal is a rather crude attempt to go about it. It could be thought of as part of the employer-employee contract, but it misses the point of that relationship: to produce something of value for the employer. Being concerned with workers' health distracts from and takes resources away from fulfilling the mission of the organization. Employee health should be left to the individual.

Since health care costs are "free" to Alabama state employees, however, and at taxpayer expense, it's reasonable for the state to seek ways to manage its labor costs. If that includes charging more to cover additional projected expenses based on health indicators, that might be okay. But block fees for two particular unhealthy habits? Aside from the resources diverted to compliance, these fees are likely to undermine collegiality and trust at work.

A better, less intrusive approach to improving the health of state employees (and saving taxpayer money) is to empower them to take care of themselves. A possible first step would be to convert each person’s health benefit into a high-deductible insurance plan (like an HSA), where the monthly premiums are individually rated (underwritten) based on physical examinations of the covered persons. If a worker decides that higher premiums are worth paying to continue smoking, to avoid losing weight, or otherwise risking their health, individuals should be free to make that decision, but at their own expense.