Hawaii Could End Up Pouring Money Into Recycling

The higher the rate of container recycling in Hawaii, the better the chances a proposed container-deposit program would cost money instead of make money, Hawaii Department of Health officials told lawmakers considering a bottle-deposit fee measure.

The department presented the cost assessment last week to the House Finance Committee, which deferred a decision.

The bill would levy a nonrefundable 2-cent fee for every beverage container sold and a refundable 5-cent fee that would be returned when empty containers are taken to approved redemption centers.

There were 800 million glass, plastic and aluminum containers sold in Hawaii last year, according to the Department of Health, which would administer the recycling program.

Supporters say the bill would improve the state's 20 percent recycling participation rate, while critics say the cost is too high for the slight improvements in recycling that will be made.

A state program to collect and refund deposits on beverage containers would cost $52.2 million if nearly 80 percent of residents and visitors recycle, the department said.

At a 90 percent recycling rate, the program would cost $57.9 million, $1.9 million more than the program's break-even budget of $56 million, which is based on a 7-cent fee and 800 million containers, health officials said. The budget includes $5.6 million to administer, operate and market the program.

To make up for any shortfall, the department proposes charging the 2-cent fee starting in October 2003, a year before the refund program would start. This would give the state approximately $16 million and help keep the program self-sufficient and allow for the hiring of staff, the department said.

As the finances of the proposal are worked out, the bottling industry pushes ahead with opposition. The bill, when it was introduced last legislative session, received criticism from local bottlers and national beverage industry heavyweights like Coca-Cola and Anheuser-Busch. The industry presented an alternative recycling plan at the start of this session that proposed a combination of curbside pickups and container drop-offs on all islands. The industry said its program would cost $5 million to implement and would be covered by a $2 monthly fee levied on each household.

That proposal found little favor with lawmakers, who say the measure doesn't go far enough. State agencies and county officials continue to advocate for a bottle bill; the counties say recycling will reduce litter making its way to the nearly-full landfills.

"There is a price to pay both for action and inaction," Kauai County Councilman Gary Hooser said. "I prefer to pay for positive action and for an economic incentive for the public to eliminate bottles and beverage containers."

Opponents argued most of the containers end up at the city's H-Power waste-to-energy facility in Kapolei and not the landfill.

"Plastic bottles are already recycled into electricity on Oahu and can be recycled into power on the neighbor islands," said Linda Smith, manager of Pacific Allied Products Ltd. "Why send our fuel sources out of state when we need low-cost energy here?"

Tax Foundation of Hawaii argued the bottle bill is a tax increase. If only 70 percent to 80 percent of the containers come back for a refund -- the average recycling rate nationally in states with bottle bills -- the state retains the uncollected portion of the deposit fee, said Lowell Kalapa, executive director.

"It is a tax increase for exactly what the people of Hawaii don't want, another state program, with more public bureaucrats and more public spending," Kalapa said.