Jan 8 - Governor Schwarzenegger's Recycling Scheme

Governor Arnold Schwarzenegger's office today unveiled a proposal to fix the State's Beverage Container Recycling Program with a combination of program cuts, loan repayments and increased consumer fees.

The program has been forced to cut more than $150 million in recycling program payments and funding last year after the state transferred funds from the recycling program to the State's General Fund. The state's General Fund currently owes the Recycling Program more than $450 million.

The Governor's plan includes a proposal to repay the program $54 million this year and $98 million next year. Additionally, the administration plans to ask beverage distributors to accelerate the time period for making CRV payments, effectively adding a one-time '13th' monthly payment to the current fiscal year.

The loan repayments and 'acceleration would provide about $250 million over the next two years and allow the administration to reinstate about 75-80 percent of program expenditures.

Legislation would be required to make the expenditures retro active to January 1. As part of that legislative proposal the Governor's office is proposing to cut grants to local governments, curbside programs, local conservation corps and others by about $60 million.

Additionally, Governor Schwarzenegger's propsal would eliminate current manufacturer fee requirements, replacing them with a new, non-refundable, consumer recycling fee on beverage containers based on their cost of recycling. That fee would likely equal 2 cents on glass and HDPE Containers and 1 cent on PET Plastic Containers. It's expected to generate more than $150 million annually. As proposed however, the new consumer fees would not go into effect until 2014, three years after Schwarzenegger leaves office. The Administration said it would fully reinstate handling fees and processing payments to recyclers.

Governor Schwarzenegger vetoed SB 402 in October, which would have expanded recycling and brought program payments and expenditures into balance. That measure would have prevented the loss of green recycling jobs and infrastructure.

Since vetoing the measure, hundreds of recycling workers have been laid off, and closed/unserved recycling locations in the state now exceed 600.