State Fees for Solid Waste
(from Maine Townsman, May 2001)
by Kirsten Hebert, Legislative Advocate, MMA
The cost of collecting, transporting, incinerating and disposing of the solid waste generated in Maine is paid for with property tax revenues and through user fees. Except for the debt service costs the state covers for bond issues periodically approved by the voters for landfill closing and remediation expenditures, the state's General Fund revenue is not used to pay for state-level regulatory and technical assistance programs. Instead, those programs and the 38 state employees at the Maine Department of Environmental Protection (DEP) and State Planning Office (SPO) who administer those programs are paid for with the revenue in two dedicated funds - the Solid Waste Management Fund and the Maine Environmental Protection Fund - which collect revenues from consumers, industries and municipalities. This article attempts to identify the sources of revenue going into these two funds and how those revenues are appropriated by the Legislature.
SOLID WASTE MANAGEMENT FUND
Maine's Solid Waste Management Fund (SWMF) was established by the Legislature in the 1989 in order to support programs now administered by SPO and DEP. When it was created, this fund was used to support the programs that were administered by the now-defunct Maine Waste Management Agency. The revenue dedicated to the SWMF comes from the $1 recycling assistance fee placed on tires, the $1 surcharge attached to the sale of new lead-acid batteries and the various surcharge fees for dumping municipal and special waste in commercial or municipal landfills. In FY 2000, revenues deposited in the SWMF totaled $2.8 million.
Recycling Assistance Fees
In FY 2000, the SWMF received $1.2 million from the $1 recycling assistance fees on tires and batteries. Though there is no exact accounting of the number of tires sold in the state, DEP estimates that 75% of that money, or $900,000, is funded from the $1 surcharge attached to the purchase of new tires. The remaining $300,000 annual contribution represents the revenue received from the purchase of lead-acid batteries.
Waste Handling Fees
The other source of funding for the SWMF is the surcharge placed on various forms of solid waste that are disposed of at commercial, municipal and regional landfills.
The most expensive is the $25 surcharge attached to the disposal of oil-contaminated soil or gravel. Other wastes such as waste water facility sludge, ash, coal and oil, paper mill sludge, industrial waste, sandblast grit and other special wastes are charged $5 per ton. The disposal of asbestos is $5 per cubic yard.
There are a range of Municipal Solid Waste (MSW) products that trigger a landfill surcharge fee. Raw MSW commands a $1/ton fee when it is dumped in a landfill, except for locally-generated MSW in a municipal landfill. The products of the waste-to-energy process are also tagged for the $1/ton fee. The ash that results from the incineration process triggers the $1/ton fee, as does the "front end process residue" (FEPR), which consists of the glass, organic matter or other solid waste products that are removed from the waste stream before the waste is incinerated. This separation process occurs in the two refuse-derived (as opposed to mass-burn) incineration facilities in the state.
On the face of it, the entities that contribute to the SWMF are the landfills in Maine. There are seven municipal landfills that accept raw MSW (Augusta, Bath, Brunswick, Tri-Community in Fort Fairfield, Greenville, Presque Isle, and West Forks), and one municipal landfill (Lewiston) and two commercial landfills (Sawyer Environmental Recovery in Hampden and Waste Management Disposal Services in Norridgewock) that accept MSW ash and other special wastes. Of this mix, it is the special waste landfills that are the primary entities collecting these surcharge fees and remitting them to the state.
One step behind the special waste landfills are the four waste-to-energy facilities that incinerate MSW in the state. These include Maine Energy of Biddeford, Penobscot Energy Recovery Corporation (PERC) of Orrington, Regional Waste Systems, Inc. of Portland and Mid Maine Waste Action Corp. (MMWAC) in Auburn. The ash that is generated by MMWAC is landfilled in Lewiston; PERC ash goes to the Sawyer landfill in Hampden; Maine Energy takes its ash to Norridgewock; and RWS operates its own landfill in Portland.
The total amount of special waste fees paid into the SWMF, during the most recent 12-month period for which there is data, is shown in Table I. Even though the fee for the various MSW products (ash and FEPR) is considerably less per ton than the other categories of special waste, the sheer weight of these so-called "municipal" solid waste products results in the municipal fees contributing the most to the SWMF. Although some small percentage of those fees may be covered directly by MSW generators, the lion's share of the special waste fees contributed to the SWMF is borne by property taxpayers.
MAINE ENVIRONMENTAL PROTECTION FUND
A parallel fund administered by the DEP is the Maine Environmental Protection Fund (MEPF). This fund is comprised of the licensing fees paid to the DEP by both municipal and commercial waste facilities licensed in Maine. These facilities include all landfills, transfer stations, beneficial use facilities, composting facilities, sludge and residual landspreading sites, septage facilities and special permits.
The fees can be broken into categories. The DEP receives a fee for processing the application, which varies according to the type of facility. There is also a fee for the first annual license, which is included with the initial application, and a license renewal fee paid every five years. Depending on the type of license applied for, the DEP may require an annual report as a term of the license. If this is the case, there is also an annual report fee.
For calendar year 2000, the MEPF received approximately $585,000 from the licensing fees. Licensing fees paid by commercial entities contributed $379,000, and the municipal and quasi-municipal entities contributed the remaining $209,000 to the fund. Approximately 55% of the municipal MEPF fees are paid by wastewater treatment plant facilities.
WHERE DOES THE MONEY GO?
MEPF Stays With DEP
The MEPF supports 10 members of the DEP staff. The estimated cost of paying these salaries is approximately $514,500 per year. These 10 staff positions include three Environmental Specialists IV, three Environmental Specialists III, two Division Directors, one Environmental Engineer, and one Clerk Typist III.
The state's use of the Maine Environmental Protection Fund bears a direct correlation to the licensing fees paid into the MEPF and the use of that revenue to support the 10 DEP staff members who are responsible for the licensing and licensing renewal process. There is very little revenue in the fund left over after the payment of the DEP salaries and direct overhead.
SWMF Funds DEP/SPO Staff
The primary purpose of the SWMF is to fund the 24 positions at the DEP and six positions at the SPO. The salaries and overhead costs draw down $1.5 million of the SWMF annually. Of these 24 DEP positions, there are three Environmental Specialists IV, 11 Environmental Specialists III, three Environmental Specialists II, one Planning and Research Assistant, one Clerk Typist III, one Senior Environmental Engineer, one Environmental Engineer, one Assistant Environmental Engineer, one Senior Geologist and one Geologist. There are also two staff members (one temporary) who assist in the household hazardous waste collection program.
SPO requires an estimated $450,000 per year to maintain its six solid waste-related positions. These positions include one Program Director, two Senior Planners, two Planners II, and one clerk Typist III. The SPO draw-down also covers additional support services. The role of the SPO in solid waste management is two-fold. First, the agency is charged with providing technical assistance to municipalities to improve recycling rates. Second, the SPO is responsible for planning for and assisting in the creation of adequate solid waste disposal capacity in the future.
Although there were state agency concerns in the mid 1990s that the SWMF would be inadequate to meet even staff salary and overhead demands, in FY 1999 and 2000, the SWMF has had surplus revenues. The Legislature has used the surplus revenue to continue with several environmental abatement projects. The project that has received top priority is the abatement of scrap tire piles.
Other Uses of SWMF
The industrial, municipal and consumer-based revenues collected in the Solid Waste Management Fund are earmarked for several purposes, including the abatement of scrap tire stockpiles located throughout the State of Maine (see sidebar).
In FY 2000, the SWMF experienced another surplus, and $438,000 was allocated to initiate a collection program for mercury containing products (see article in this issue).
This program includes a combined effort by DEP and SPO in educating the Maine citizens and business owners with respect to the upcoming deadlines that ban the disposal of mercury added products and some other types of universal wastes. The program is designed to include recycling education as well as the funding of mercury added products collection sheds located throughout the state.
Another recent use of the SWMF surplus is the remediation of the Vassalboro landfill. In LD 262, the so-called "supplemental budget bill" reconciling state revenues and expenditures for the current fiscal year, the DEP requested and received an allocation of $115,862 from the SWMF to be used for the continued remediation of the landfill. LD 262 has been enacted.
It is apparent that the primary purpose of the Solid Waste Management Fund and the Maine Environmental Protection Fund has been to support DEP and SPO regulatory staff.
A strong correlation exists between the fee structure of the MEPF and the use of the funds. Less of a nexus exists with regards to the fees that flow into the SWMF and what it funds.
When excess revenues have accumulated in the SWMF, those funds have been allocated to special environmental projects, such as the scrap tire abatement program. Unfortunately, the public has not fully understood how the collection of fees relates to the use of those funds.
As a consumer might logically conclude that the $1 surcharge on the cost of a tire would be used for its later disposal. This, however, would be a misconception. The consumer who leaves the old tires with the tire dealer quickly finds this out. The tire dealer charges a "disposal fee" for the old tires in addition to the "recycling fee" for the new tires. This system may raise an eyebrow since the consumer may be under the impression that at the time of purchase, the surcharge fee is for the later disposal of the tire. The $1 surcharge for the new tire goes to the state to be deposited in the SWMF. Any additional fees paid to the retailer are to cover the tire dealer's disposal costs.
With the recent surplus in the SWMF, the state been able to provide funding for the Mercury Added Products Program and the Scrap Tire Management Program Fund, two worthwhile environmental programs. Even though there is not a direct link between the collection source and the programs funded, the State is able to use an existing "environmental" revenue source to address some statewide "environmental" problems. For some people, a very clear nexus between the fee collected and the purpose it is used for needs to exist. Others feel that a "relationship" should exist, but it need not be that close.
In the case of the Vassalboro landfill, the DEP has used the SWMF surplus to continue the remediation of the site. At one point in time, the landfill was privately owned, however, at the time of remediation there was no owner to hold financially responsible. This being the case, the site has become a "ward of the state" and the burden of remediating the site falls upon the citizens. This is just another example of how the SWMF has been used to remedy the environmental concerns of the state.
Thus the question becomes, should the DEP's miscellaneous environmental projects continue to be funded via the user-based revenue stream even though there may not appear to be a direct correlation between the revenue source and the use of the money, or should the DEP be required to establish a new funding mechanism for each of these projects?
Scrap Tire Abatement Program
Maine's tire abatement program began in 1996. The program was implemented in order to clean up the 318 tire dumps located throughout the state. At the time, the DEP estimated the total number of tires deposited throughout the state to be approximately 22.3 million.
According to DEP, stockpiled tires represent significant health threats. At one level, rainwater collects in the piles of tires and this becomes an optimum breeding ground for mosquitoes. The greater environmental threat presented by these tire piles is the potential for a fire hazard. Burning tires are a danger to the environment and to human health. Burning and smoldering tires release 26 of the 34 most toxic pollutants into the environment, including dioxin, mercury, and arsenic.
Once tire piles ignite, they can be extinguished with water or foam provided that the stockpiled site was created with "fire lanes." This design separates rows of tires from one another, giving firefighters the ability to maneuver between the rows of tires and extinguish the burning tires before the fire spreads to the remaining piles. Without these lanes, these sites may burn uncontrollably for long periods of time.
In order to distinguish and prioritize these piles, the DEP classified the sites according to the approximate number of tires deposited in each location. Class A sites were those with more than one million tires, Class B sites contain between 10,000 and 1 million tires, and Class C sites have fewer than 10,000 tires.
As the initial clean up began, the DEP discovered five Class A sites located in Maine. These sites were located in Bowdoin, Durham, Greenwood, Nobleboro and Meddybemps. As much as 90% of the state's stockpiled tires were contained in these five Class A sites. To date, the Greenwood site has been completed after the removal of 1.8 million tires. Abatement work on both the Meddybemps site (with 1.7 million tires) and the Nobleboro site (with 1.4 million tires) has also been completed.
The tire stockpile in Durham is scheduled to be completed by summer 2001. There are currently 700,000 tires remaining after the removal of over 1.5 million tires. The largest of the remaining Class A tire piles is found in Bowdoin. Of all of the Class A sites, this enormous tire pile was the largest potential threat to human health and the environment. The site, constructed without any fire lanes, was essentially one huge pile containing over 12 million tires. Currently 8.3 million tires have been removed. DEP is asking the Legislature for additional funds to complete the project.
All of the six Class B sites have been abated. This required the removal of over 600,000 tires. These sites were located in Auburn, Augusta, Baldwin, Gorham, Lewiston, and Porter.
The financial vehicle that formalizes the state's efforts to abate the several tire stockpiles in Maine is yet another fund, called the Maine Scrap Tire Management Program Fund. The tire abatement fund receives revenue from two primary sources: allocations from the SWMF and revenues from General Fund bond issues that are approved by the voters. Table II shows the contributions from both sources that have been made over the last seven years for the purpose of tire stockpile abatement.
Thus far, the actual cost of tire stockpile abatement has reached $7.5 million. In order to continue the clean up of the Bowdoin site, the DEP has secured contracts for an additional $2.5 million. The final chunk of money is the $600,000 necessary to pay off the Greenwood contract. This brings the total cost of stockpile tire abatement to $10,600,000.
The market for used tires is unreliable at best. Many of the tires that have been removed from these abandoned sites have been chipped up and used in various capacities. One of the most common uses is tire derived fuel (TDF). Tires are chipped to a certain weight and then burned in solid fuel boilers in several of Maine's pulp and paper industries.
Tires have also been recycled by chipping them to a particular weight and using them in road construction projects. The DEP has been able to market the chips in an effort to offset the costs of tire abatement. For example, the DEP and the Maine Turnpike Authority (MTA) entered a contract under which the DEP would sell chipped tires to the MTA for use as a light weight fill for a bridge approach embankments along the new interchange just south of Exit 8 off the Maine Turnpike. Approximately 9,000 tires were removed from the Greenwood dumpsite in Bethel, Maine and chipped for this project.
SWMF's Municipal and Special Waste Fees
|Type of Waste||Fee||$ Generated|
|Asbestos||$5 per cubic yd||$34,898|
|Oil-spill debris||$25 per ton||$64,525|
|Waste water facility sludge||$5 per ton||$187,611|
|Ash, coal, and oil||$5 per ton||$167,374|
|Paper mill sludge||$5 per ton||$25,442|
|Industrial waste||$5 per ton||$102,818|
|Sandblast grit||$5 per ton||$1,470|
|All other special waste||$5 per ton||$502,188|
|Municipal solid waste ash||$1 per ton||$243,055|
|Front end process residue (FEPR)||$1 per ton||$31,943|
|Residuals Soil Decontaminants||$1 per ton||$2,341|
|Municipal Solid Waste||$1 per ton||$282,564|
Scrap Tire Management Program Fund
|Fiscal Year||General Fund/Bond Issues||SWMF Allocation|