Protecting citizens from the unintended consequences of new or increased Recycling and Tipping Fees
PWIA is strongly opposed to any proposal to increase fees or taxes imposed on municipal and residual waste landfills. For example, if there was a $1.75 increase, it would bring the total state fees to $8 per ton.
PWIA believes that any proposed increase would damage the efficiency of waste disposal in the Commonwealth and produce corresponding negative impacts to Pennsylvania’s $4.2 billion waste management industry, as well as the overall state economy.
According to PWIA’s study, “Economic Impacts of the Municipal Waste Industry in Pennsylvania,” landfills already pay approximately $10 per ton in state and local fees (taxes) amounting to more than $200 million a year on waste disposed in Pennsylvania.
When a $4-per-ton tipping tax was enacted in 2002, waste volumes reduced by over 5 million tons – resulting in a deficit of more than $20 million in annual state revenues projected from the new tax, and a nearly equal loss of tax and host fee revenues to the state and local municipalities.
PWIA believes that an additional increase would have a similar effect and could result in a further reduction by as much as 7 million tons of waste. That 7 million ton decrease in waste would reduce the revenues projected from any new fee by 33%.
Even if the resultant reduction in waste volume was only half of the potential 7 million ton decrease, the corresponding loss of current fees and tax revenues could exceed the projected new revenue – yielding a net loss of tax revenues overall.
A loss of tax revenues would negatively impact important statewide programs, including the Pennsylvania Recycling Fund and the Growing Greener Environmental Stewardship Fund, and cause a significant loss of revenue to host municipalities.
These losses could affect recycling programs at the municipal level and could also affect the ability of municipalities to fund or finance various waste-related activities and other services, which are dependent on the current fees.
Increased or new fees can also be expected to cause a reduction in business that would not only directly affect waste facilities, but also indirectly affect the thousands of individuals employed by the many businesses that support Pennsylvania’s recycling and waste management industry. In addition, the fee itself would result in higher costs to those who pay for recycling and waste disposal in PA – households, small and large businesses, state and local government.
Effects of Disposal Fees and Lost Revenues
Effect of the $4/ton fee was a decrease in waste disposed in PA by over 5 million tons per year and a loss of revenue to Growing Greener, Recycling Fund and local fees of $36+ million per year:
- Due to $20 million/year decrease in the anticipated Growing Greener Revenue
[5,000,000 tons x $4/ton = $20,000,000]
- Plus $16+ million/year loss of revenue to Recycling Fund and local fees
[5,000,000 tons x ($2 Recycling + $1+/ton host fee + $25 closure fee) = $16+ million]
For example, the effect of a new $1.75/ton fee => 2 to 7 million ton decrease in waste disposed in PA
*If only a 2 million ton decrease in waste disposed => $23.5 million/year lost revenue
- Due to $3.5 million decrease in anticipated new revenue
[2,000,000 tons x $1.75/ton = $3,500,000]
- Plus $20 million loss of revenue to Recycling Fund, Growing Greener and local fees
[2,000,000 tons x $10/ton average all fees/taxes = $20,000,000]
*If the new fee referenced above causes a 3.5 million ton decrease => $41.1 million/year lost revenue
- Due to $6.1 million decrease in anticipated new revenue
[3,500,000 tons x $1.75/ton = $6,125,000]
- Plus $35 million loss of revenue to Recycling Fund, Growing Greener and local fees
[3,500,000 tons x $10/ton average all fees/taxes = $35,000,000]
*If the new fee referenced above causes a 5 million ton decrease => $58.8 million/year lost revenue
- Due to $8.75 million decrease in anticipated new revenue
[5,000,000 tons x $1.75/ton = $8,750,000]
- Plus $50 million loss of revenue to Recycling Fund, Growing Greener and local fees
[5,000,000 tons x $10/ton average all fees/taxes = $50,000,000]
Actual State Revenue based on $2.25/ton through 2001, and on $6.25/ton after the $4/ton fee of Act 90 was imposed
Projected State Revenue (assumed no loss of waste volume)