Tax Law

State Net Capitol Journal – April 4, 2016; Changing Economics of Recycling Could Soon Impact States

Budget & Taxes

Changing Economics of Recycling Could Soon Impact States

For years recycling programs have allowed cities, counties and states to improve the environment while saving money on landfill fees and even making money from the sale of recycled materials to processors. But that was made possible by sky high world commodity prices for recyclables and other raw materials, driven largely by China’s rapid economic growth. And those prices began sliding downward in 2011 and dropped precipitously in 2015, with the Institute of Scrap Recycling Industries (ISRI) index for paper and metals falling nearly $100 a ton to $156.77.

Michelle Leonard, president of the Solid Waste Association of North America, said “markets are so low right now that some processors are holding on to” recyclables instead of selling them, particularly those that aren’t located near the ports on the West Coast that ship to China.

The change of fortune for recycling doesn’t seem to have had much of an impact yet on states, despite the recycling goals most of them have set.

“Nobody has really been talking to us about any problems,” said Karen Moore, recycling administrator for Florida’s Department of Environmental Protection.

Mark Oldfield, spokesman for CalRecycle, the state agency that oversees recycling in California, likewise, said, “It’s far too early to tell.”

But California, which currently recycles 50 percent of its waste and has set a target of 75 percent by 2020, is aware of the problem and working on solutions. For example, it’s trying to figure out how to create more domestic demand for recycled materials, so “we insulate ourselves from the ups and downs of the markets,” said Oldfield.

“We’re good at collecting stuff,” he said. “We need to get good at using these materials here and creating a market for them.”

Chaz Miller, policy director for the National Waste & Recycling Association, described the situation states are in right now by saying: “Good times make us happy, and sometimes when we’re happy we don’t think down the road. That’s human nature.”

“But now we’re down the road, and not sure what’s ahead,” he said. (STATELINE.ORG)

MO House Reverses Gov’s Budget Restrictions

Last month, Missouri lawmakers invoked for the first time the power they were granted by voters in 2014 (Amendment 10) to overturn gubernatorial budget restrictions. With bipartisan support the state’s Republican-led House voted to release $575,000 in the 2016 budget for a program for gifted high school students and $350,000 for a program to help brain injury sufferers stay out of nursing homes, sending those override motions to the Senate.

Nixon had said the restrictions were necessary to balance the budget. But House Budget Committee Vice-Chairman Scott Fitzpatrick (R) said there was plenty of money available for those programs.

“Not only are we meeting the revenue forecast that we made when we passed the budget last year, we are blowing it out of the water,” he said. “By the governor’s own admission he’s going to have $280 million in the bank [when the 2016 fiscal year ends] on July 1.”

In a statement, the governor said he was “surprised and disappointed that the House, during tax season, is attempting to increase government spending, rather than pay the tax refunds that are owed to hardworking Missourians.” (FULTON SUN)

CO Headed for Recession?

After years of positive reports about Colorado’s economy as it surged out of the Great Recession, the General Assembly’s economist warned last month that the state could be headed for a recession.

Legislative Council economist Larson Silbaugh informed lawmakers that although the state's economy grew through the first half of last year, it slowed toward the end of the year, and that trend has continued with declining energy prices.

“If weakness in natural resources, manufacturing and agricultural areas of the economy reach a critical mass, we have an increasing chance of a recession,” Silbaugh said.

The state's weakening economy forced lawmakers to cut $100 million from the current budget to balance it earlier this year, and based on the latest estimates, lawmakers will have to come up with another $98 million to $111 million to keep it in the black. (DENVER POST)

Budgets In Brief - April 4 2016

AL Considering Gas Tax Hike: The ALABAMA House Transportation, Utilities and Infrastructure Committee approved a bill (HB 394) last month that would increase the state’s gas tax by about six cents per gallon to generate additional funding for road and bridge projects. The state’s current gas tax, which consists of three different levies as well as a pump inspection fee, is 18 cents per gallon. (MONTGOMERY ADVERTISER, LEXISNEXIS STATE NET) * AK Deficit Continuing to Grow: ALASKA’s budget deficit has increased from an earlier projection by another $300 million due to low oil prices, the administration of Gov. Bill Walker (I) said last week. According to the revised forecast the deficit for the state’s $5.4 billion budget will be $4.1 billion instead of $3.8 billion. (ALASKA DISPATCH NEWS, LEXISNEXIS STATE NET)

- Compiled by KOREY CLARK

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