Trash TaxesTrash Taxes
April 1, 2003
TRASH TAXES, SUCH AS the $4 per ton tipping fee tax increase approved last June by the Pennsylvania legislature, are being touted as a new “green” revenue stream for state governments. They are promoted for various reasons. One reason is that garbage is “bad.” Tax it and people will make less garbage and recycle more. This is similar to so-called “sin” taxes on tobacco and alcohol where the government taxes an activity to discourage it and to make money off of it.
Instead of discouraging garbage, trash taxes make the state rely on trash as another revenue source. As one Pennsylvania state representative ruefully noted about his state's latest trash tax, “for the moment anyway, we're welcoming your trash.” In his state, which now charges a $7.25 per ton tipping fee tax, the average household pays a tax of about 90 cents per month. No one is going to recycle more or make less trash for the price of a soft drink. And if the price of garbage disposal skyrockets to tipping fees in excess of $100 per ton, as it did in upstate New York under flow control, people will avoid tipping fees by illegally dumping garbage or by using burn barrels.
A second reason state governments want to impose a tax is to raise money. Currently, about half the states have tipping fee taxes. These are usually less than a dollar per ton. They all were created in the early '90s when the EPA's Subtitle D landfill regulations went into effect and were intended to help support the state's permit writing and enforcement infrastructure. As long as these fees are not diverted to the state's general fund and spent on other programs, they may be a small price to pay for efficient state permitting programs. However, the reality is that the more money they generate, the more likely they are to be used elsewhere. Half of Pennsylvania's new tax is going directly to the state's general fund. At least four of the states with scrap tire funds diverted that money to other programs. In Texas, which has a $0.625 per ton recycling tax, 30 percent to 40 percent of the money raised goes to “administrative expenses.” Wouldn't it be more efficient to let local governments use the money for their own recycling programs?
And let's face it, a third reason for a trash tax is to make landfill operators “pay.” The rhetoric in Pennsylvania last spring was redolent with shouts of “make the landfills pay.” Don't forget, the public and private sectors operate landfills, and they will both find ways to charge the tax to their customers.
In reality, these taxes are an unfunded mandate on local governments. In Pennsylvania, trash tax supporters flatly denied it would be a burden on municipalities. I wonder what they would say to all the Pennsylvania towns that raised taxes, cut garbage or other municipal services to cover this unfunded mandate? Pittsburgh and Philadelphia were hit particularly hard, paying an additional $1 million and $3 million dollars per year, respectively. What programs should those cities cut to pay the new tax? Police? Fire? Education? Recycling?
The solid waste and recycling industry already is extensively taxed. We pay business license and/or registration fees; local, county and state taxes; truck registration fees; property taxes; payroll taxes; and a host of other taxes and fees. And like all businesses, we gain our revenues from our customers. They pay our taxes for us.
Some trash taxes are appropriate. Taxes to pay for solid waste collection and disposal, and for recycling programs are no different than taxes to pay for police, fire protection and public education. Taxpayers can see what their taxes are paying for and can register their satisfaction or dissatisfaction at the ballot box. The connection between the tax and the service received is direct and straightforward. But trash taxes for “environmental” programs or the general fund are the latest way to shake down taxpayers.
Oliver Wendell Holmes once said, “Taxes are the price we pay for a civilized society.” Maybe he's right. But I bet he'd agree with me that trash taxes are just another rip-off.
Chaz Miller is state programs director for the Environmental Industry Associations, Washington, D.C. Opinions in this column do not necessarily reflect the National Solid Wastes Management Association or the Environmental Industry Associations. E-mail the author at: [email protected].