Surcharge Spree

Randy Woods Contributing Editor Seattle

WASTE INDUSTRY OFFICIALS are expressing concern about recent proposals in two Great Lake states to increase landfill surcharges. Ohio Gov. Bob Taft, faced with a $4 billion budget deficit, has proposed increasing the state's landfill surcharge from $2 per ton to $4.75 per ton to help fund the Ohio Environmental Protection Agency's (EPA) programs.

Meanwhile, the state of Michigan is considering a more ambitious plan to raise its surcharge from $0.21 per ton to $7.50 per ton, a more than 35-fold increase. The proposal to dramatically hike up the Michigan surcharge is intended to make the state's landfills a less appealing destination for out-of-state waste, much of which comes from Toronto.

At press time, the Michigan legislation had not yet been introduced in the state House of Representatives, but it was expected to be unveiled in late March, says Dan Farough, spokesman for the House Democrats who are sponsoring the proposal.

Both the Washington-based National Solid Wastes Management Association (NSWMA) and the Lansing-based Michigan Waste Industry Association (MWIA) are opposing the landfill surcharge proposal, calling it an add-on tax that will affect Michigan far more than the interstate waste transports it is designed to inhibit.

Chaz Miller, state programs director for NSWMA, says that bills seeking to stem the flow of out-of-state waste through increased state surcharges are misguided.

“There's this perception that these bills will only tax the big out-of-state haulers, but most refuse collection is paid for by local governments, which are funded by the local residents,” Miller says. “They're the ones who are going to end up paying most of the tax.”

Only about 25 percent of the waste entering Michigan's landfills comes from out of state, meaning state residents and businesses will bear three quarters of the fee's burden, says MWIA Spokeswoman Deborah Muchmore.

Farough says the claims that Michigan residents would pay unfairly are not true. The average increase in garbage bills under the proposal would be around 90 cents per family each month and would be given back to local communities, he says.

According to Lawson Oates, manager of strategic planning for Toronto's Solid Waste Management Services division, Toronto would be exempt from additional landfill fees under a price protection clause in its disposal contract with Ft. Lauderdale, Fla.-based Republic Services Inc. Republic owns the Carlton Farms landfill in Sumpter Township, Mich. that Toronto sends its trash to. Will Flower, vice president of communications and community relations for Republic, says the language in the contract is too vague to determine whether the company could pass along the increases.

Under Ohio's Biannual Budget bill proposal for 2006-2007, known as HB-66, the $2.75 per ton hike in landfill surcharges would replace the $20 million the Ohio EPA receives from the state's general revenue fund. The amount currently makes up roughly 12 percent of the agency's budget.

Carol Hester, a spokeswoman for the Ohio EPA, says the increased surcharge would raise about $25 million annually for the agency and would cost Ohio residents about $2 per year.

NSWMA's Miller says that basing Ohio EPA funding on fees that are subject to economic cycles is dangerous public policy. NSWMA opposes the proposed Ohio increase, as does the Ohio chapter of the Solid Waste Association of North America, Silver Spring, Md.

Cincinnati-based Rumpke Consolidated, Ohio's largest hauler, says it would have little choice but to pass most of the extra costs onto customers. “The fee will impact every aspect of our business enormously,” says Rumpke Spokeswoman Amanda Wilson. “We understand that the funding is necessary, but we're hoping that the state will find alternative methods to raise the money.”