Circular File: Pennies from Heavin'

Governments attempt to cover budget shortfalls by slashing sanitation costs.

2010 will not be a happy year for elected officials. Declining tax revenues are causing fiscal deficits and challenging budget decisions. The Great Recession may be over, but its impact isn't.

Let's put these challenges in perspective. Tax revenues for state and local governments are down substantially. To add insult to injury, unexpected crises are causing new budget strains. The late December snowstorm that covered much of the East Coast and the Midwest, for instance, overwhelmed many state and local snow removal budgets.

These shortfalls matter. Unlike the federal government, most states are required to balance their budgets. Local governments don't even have the option. As a result, when most state and local governments consider solid waste and recycling issues, their main concern will be on new revenue sources and cutting costs.

Local governments will try to raise rates for trash and recycling services or they will try to save money through service cutbacks. Recycling programs could be cut back, but are not likely to be eliminated. Cities and counties that rely on tipping fees to fund their solid waste and recycling programs will be in particularly dire straits. As the recession and changes in how manufacturers and retailers manage materials continue to create less waste, those governments will be looking for new revenue sources.

Privatization of solid waste services is one positive option for local governments. By privatizing, they can shed an expense while taking advantage of the private sector's ability to maximize efficiency while lowering costs. Some local governments may decide that they want to go the other direction and take over solid waste services. If so, they should consider the uproar that occurred when a western Pennsylvania town tried to eliminate private collection of commercial garbage. After hearing nothing but protests from local businesses, the city beat a hasty retreat.

Some states will consider higher recycling or waste diversion requirements, with particular emphasis on diverting organics from disposal. Florida, for instance will be considering a 75 percent recycling or waste diversion goal. Unfortunately, state legislatures are most likely to divert recycling grant funds to non-environmental programs.

Congress could tackle solid waste and recycling in several ways. Climate change legislation might include recycling provisions. While the House-passed bill barely mentions recycling, the main Senate bill includes grants for recycling programs. Climate change or renewable energy legislation also could have provisions to encourage the conversion of landfill gas into an energy product. Renewable energy legislation is more likely to pass this year than a climate change bill because the latter is more complicated and more controversial.

Congress also is likely to address electronics recycling this year. As with the past year, a sweeping bill is unlikely because no one can agree on how to fund an e-recycling program. However, legislation placing restrictions on exporting discarded electronic products to overseas recyclers is likely to pass. Federal and state legislators also are likely to show more interest in ‚Äúproducer responsibility‚ÄĚ legislation for non-electronic products. The idea that producer responsibility shifts recycling costs away from the public sector has added political value in cash-short years.

Finally, look for more pressure to tax trash, whether this comes as a sales tax, a disposal tax or some other revenue raiser. In a legislative year where the temptation will be to tax anything that moves, solid waste will be a target for cash-strapped governments.

Chaz Miller is state programs director for the Environmental Industry Associations, Washington, D.C.

Opinions in this column do not necessarily reflect those of the National Solid Wastes Management Association or the Environmental Industry Associations. E-mail the author at [email protected].

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