Bill would end recycler subsidy, except for nonprofits
From the Honolulu Star-Advertiser
A subsidy that aims to support recycling efforts on Oahu is being examined by the City Council amid criticism that the decades-old assistance measure amounts to "corporate welfare," costing the city more than $2 million a year. Schnitzer Steel Hawaii Corp., the company at the center of the debate and the one that receives the most from the subsidy, says the amount is commensurate with the tonnage of material it recycles.
Bill 47-10, was heard and advanced by the Council's Public Works Committee on March 28, would end the practice of giving private companies an 80 percent discount on "tipping fees" charged by the city when they deliver recycling residue to the Waimanalo Gulch landfill. The subsidy would continue for charitable organizations such as Goodwill Industries (for which the discount is $147,000 – second largest after Schnitzer) and the Salvation Army (sixth largest discount, $13,000), which are exempt from paying the fees. The committee's chairman said he plans to maintain some type of incentive program for the commercial businesses affected.
Although the ordinance is applied equally to companies that qualify, the overwhelming majority of it goes to Schnitzer Steel, which does the most recycling in Honolulu more than 100,00 tons of metal a year from automobiles, appliances and other bulky metal items.
Schnitzer's discount for calendar year 2010 was $1.9 million, according to the city Department of Environmental Services. Critics of Schnitzer Steel contend the ordinance was first adopted at a time when the price for scrap metal was depressed and there were few recyclers in the islands. Since then, demand for scrap metal has grown in countries such as China, and Schnitzer's profitability should make the subsidy unnecessary during a time when city departments are facing tight budgets.
At a February hearing, Schnitzer and opponents of Bill 47 argued the money helps support much-needed recycling programs such as Aloha Aina Earth Days recycling events and the Marine Debris to Energy program, which collects derelict nets, fishing line and rope for recycling by Schnitzer.
