Pricey ‘Garbage Tax’ Fills Wisconsin Slush Fund

Published October 28, 2009

Wisconsin residents are paying the nation’s highest solid waste tipping fees, often referred to as a “garbage tax,” supposedly to support state recycling programs. Instead, much of the money is being diverted to other purposes.

Wisconsin’s 2009-2011 budget raised the state’s solid waste tipping fee to $13 per ton, the highest in the nation. Officials estimate the fee will generate $63 million to $69 million in state revenue over the next two fiscal years.

Fee in Search of a Fund

According to the Legislative Fiscal Bureau, however, since 2003 more than $112 million has been transferred from the recycling fund to purposes not related to recycling.

In 2006 the Governor’s Task Force on Waste Materials Recovery and Disposal recommended banning diversions of money from the recycling fund for purposes other than recycling, instead of raising the tipping fee. Nonetheless, the practice continues.

“Obviously the garbage tax is being used as an ATM for unrelated state government spending,” said Scott Manley, Environmental Policy Director at Wisconsin Manufacturers & Commerce (WMC).

“The most recent increase was done to help fill the state’s $6.5 billion deficit,” added Jason Johns, Government Affairs Representative for the National Solid Wastes Management Association (NSWMA). “It had very little to do with deterring out-of-state waste or increasing recycling.”

Purpose No Longer Met

Johns says the NSWMA believes the original purpose of the recycling fund is no longer being met.

Instead, Johns explained, many recycling programs formerly funded by the tipping fee have been cut, including the Clean Sweep Program, the Wisconsin Department of Natural Resources’ (DNR) Waste Reduction and Recycling Demonstration Grant Program, and the DNR’s Recycling Efficiency Incentive Grant Program.

“When these programs are being cut at the same time the fee is increased, it’s pretty clear the purpose of the fund is not being met,” he said.

Adam Collins, spokesperson for the DNR, said appropriations for two of those programs were suspended for the FY 09-11 biennium “due to the global economic crisis.”

As for the transferring of funds, Collins said that in 2007 the Recycling Fund became the Recycling and Renewable Energy Fund. “The additional funds will be used for renewable energy projects in addition to recycling projects,” Collins said. The 2009-11 budget allocates $8 million for a University of Wisconsin System Bioenergy Center.

Punishing Businesses, Consumers

According to the DNR, which administers the recycling fund, approximately 77 percent of tipping fee revenues come from in-state sources.

“We are talking about a considerable tax increase, the overwhelming majority of which will be paid by Wisconsin businesses and local governments,” argued WMC’s Manley in 2006 testimony about the tipping fee to the State Assembly. “Wisconsin businesses cannot afford higher taxes, nor can we remain competitive if the legislature makes it more expensive to operate a business here.”

Regressive Tax

Christian Schneider, a fellow at the Wisconsin Policy Research Institute, suggested the fee increase amounts to a regressive tax on Wisconsinites in the form of increased property taxes, cuts in municipal services, and higher prices.

“In-state businesses need a place to dump trash as well, and raising the fees will cost them more, which will be passed on to consumers,” Schneider said.

The tipping fee was established by 1989 Wisconsin Act 335 as a charge on waste generators for each ton of garbage dumped in landfills in order to encourage reduction and recycling. Revenues raised were to be contributed to a segregated recycling fund for financing state recycling programs.

Brien Farley ([email protected]) writes from Genesee, Wisconsin.

Internet Info

“Recycling Tipping Fee Increase and Transfer from the Recycling Fund to the General Fund (DNR–Air, Waste, and Contaminated Land),” Legislative Fiscal Bureau Joint Committee on Finance Paper #601:

“State Solid Waste Tipping Fees Overview (DNR–Air, Waste, and Contaminated Land),” Legislative Fiscal Bureau Joint Committee on Finance Paper #590: