The Recycling and Economic Benefits of PAYT

Kristen Brown

State and local governments across the nation are seeking to reduce the amount of trash they send to landfills and to increase their recycling. A variable rate — also known as pay-as-you-throw (PAYT) — collection program offers a community an extremely effective way to achieve those goals.

In a PAYT program, residents are charged for the amount of trash they set out for disposal. The idea is to provide residents with an incentive to recycle or reduce they amount of trash they produce. In most communities in the United States, households pay a flat rate for their trash collection, either through their property taxes or fixed, regular fees. Under PAYT programs, residents aren’t charged for what they put in their recycling bins, meaning only landfill-bound material incurs a charge. In PAYT programs, residents are charged for each community-issued bag or container of waste they set out for disposal, and the residents have a variety of bag and container sizes from which to choose. Currently, more than 7,000 local jurisdictions — about 25 percent of the communities in the United States — have PAYT programs.

“Unit-Based Garbage Charges Create Positive Economic and Environmental Impact,” a study released last year by New York-based Green Waste Solutions and the U.S. Environmental Protection Agency (EPA), found that local governments with PAYT programs produce 467 pounds of landfilled trash per capita per year, compared with 918 pounds of landfilled trash per capita per year in non-PAYT communities.

Less trash sent to a landfill means less disposal costs. “While city managers may appreciate the environmental benefits of PAYT, most admit that the main driver is that of saving money and creating good, green jobs,” says Janice Canterbury, PAYT project manager for EPA’s Resource Conservation and Sustainability Division.

Beyond local communities, PAYT has garnered serious attention at the state level and has been adopted in many other countries in recent years.

A History of Success

Consider some of the benefits of PAYT:

• Fort Worth, Texas, cut its landfill disposal costs by more than $7 million after adopting PAYT, and in one year the city also earned $540,000 from the sale of recycled materials.

• The recycling rate in San Jose, Calif., spiked from 28 percent to 43 percent in the first year of the city’s PAYT program, and the rate rose to 55 percent by 1998.

• Dover, N.H., reduced its annual waste management costs from $1.2 million to $878,000 after adopting PAYT.

• Worcester, Mass., decreased its annual waste management expenses by $1.2 million after adopting PAYT in 1993 and increased its recycling rate from 3 percent to 36 percent. “The politics of the bag fee in Worcester were tough at the outset,” says Massachusetts Lieutenant Governor Tim Murray, who was mayor of Worcester when the PAYT program was implemented. “But we were able to build some consensus on the issue because we talked about it in the larger context of what services people value from their government, what they really cost to provide, and how we had to change if we were going to be able to deliver those services over the long term.”

“I think everyone has a role to play as an environmental steward, and by moving to a pay-per-bag model in Worcester it helped people focus not only on the true cost of waste disposal, but also how we use resources across the board, from what we produce to what we buy and, ultimately, to what we dispose of,” Murray adds. “The system has been a great success for Worcester, both fiscally and environmentally.”

At the State Level

Over the years, PAYT has garnered serious attention at the state level. In fact, four states — Iowa, Minnesota, Washington and Wisconsin — currently require PAYT programs for some or all residents. Minnesota and Washington require all communities in the state to implement PAYT, while Iowa and Wisconsin require communities not diverting at least 25 percent of their solid waste to adopt the system.

Iowa became a PAYT leader in the late 1980s when it passed legislation requiring counties and cities to reduce their landfilled solid waste by 50 percent. PAYT was enjoying increasing success in waste reduction across the United States at the time, and it became clear to Iowa officials that the method offered a powerful tool in its effort to reach its ambitious goal. Therefore, in 1994, the Iowa General Assembly mandated that all communities implement a PAYT program if they were unable to meet a 25 percent reduction in landfilled solid waste.

By 2006, nearly 60 percent of Iowa’s residents were participating in a PAYT program. In Cedar Rapids, a city of 120,000 residents, the average household now disposes less than 40 pounds per week, about 38 percent less than the national average. The entire city diverts nearly 9,000 tons of waste per year. The same success also has occurred in Monticello, where the average residence recycles 761 pounds per year.

A variety of PAYT-related assistance is provided in other states as well. Some states provide grants to cities implementing PAYT programs, while others fund workshops and educational opportunities to provide encouragement and guidance to local leaders considering such a program. For example, in Massachusetts, which is home to 130 PAYT programs and a 47 percent statewide recycling rate, the Department of Environmental Protection (DEP) funds a team of seven regional municipal assistance coordinators (MACs).

They provide technical waste reduction assistance to cities and towns throughout the state. MACs help implement local pilot projects and coordinate regional waste management approaches to improve cost effectiveness and accessibility of services. “Whether it’s evaluating the potential impacts of PAYT on solid waste budgets, educating elected officials, preparing outreach materials for public forums or working through roll-out logistics, MACs provide key assistance that paves the way for new programs,” says Brooke Nash of DEP’s Municipal Waste Reduction Program. In addition to the hands-on assistance, DEP distributes PAYT start-up funds to help new programs with education outreach, initial bag purchases and other related costs.

Finally, a growing number of states have incorporated PAYT in their State Master Plans or Comprehensive Solid Waste Management Plans. In 2008, the Florida legislature established a goal of a statewide recycling rate of 75 percent by 2020 (the state’s recycling rate is currently 28 percent). Last year the Florida Department of Environmental Protection (DEP) released a plan to turn this goal into reality.

Based on extensive research and contributions from stakeholders, the state’s 75 Percent Recycling Goal Report identifies PAYT as a strategy for reaching the goal. The report cites a 2006 Skumatz Economic Research Associates analysis showing that PAYT programs increase recycling by approximately 50 percent without increasing costs for the majority of implementing communities. The analysis also says PAYT is the most effective action cities can take to increase recycling and diversion in the residential sector.

Some Florida communities already have experience with PAYT. In Gainesville, the city’s PAYT program netted an 18 percent decrease in the amount of waste collected and a 25 percent increase in recyclables recovered. It also saved the city more than $186,000 in disposal costs. Furthermore, Sarasota County’s PAYT program has yielded an overall recycling rate of 41 percent, the highest in the state.

In South Carolina, the Recycling Market Development Advisory Council (RMDAC), which is an advisory group to the governor, is urging local communities to adopt PAYT. “South Carolina’s recycling industry supports 37,440 jobs with an economic impact of $6.5 billion and is growing at a 12 percent annual rate,” says Gerry Fishbeck, chairman of RMDAC. “We have no other industry sector currently growing at this pace, and in order to continue, we need to change residential behavior.”

Growing Around the Globe

Taking their cue from success stories in the United States, countries around the world also are adopting PAYT. A large percentage of Europe’s citizens now have access to a PAYT program. In fact, in many nations, PAYT is the law. Countries like Denmark, France, Italy and the Netherlands have passed national legislation that not only requires PAYT but also gives guidance on how to design the program and develop rates. Germany and Belgium go a step further, with specific regulation on how localities are to handle waste management and basic principles for the application of charges.

From small towns in America’s heartland to European countries, PAYT is enabling communities to reduce their waste stream and slash disposal costs.

Kristen Brown is a managing partner of Green Waste Solutions.

Sidebar: The Smart Bet Calculator

For community officials looking to explore the potential economic benefits of implementing a pay-as-you-throw program in their jurisdictions, the U.S. Environmental Protection Agency has the Saving Money and Reducing Trash Benefit Evaluation Tool (SMART BET) available for download on the agency’s website.

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