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December 4, 2009

VC Star

Budget crisis imperils grocery store recycling centers

Add grocery store recycling centers to the list of victims of the California budget crisis.

Money the state had set aside from the deposits on bottles and cans to fund the recycling centers has been stripped away to help balance the budget. Now some recycling centers around the state are closing.

“They have got to repay the funds that are being raided from the bottle bill program,” said Adrian White, president of Tomra, one of the largest recycling companies in the state that operates in grocery store parking lots. “If no solution is found, there will be a complete collapse of the recycling program as we know it today.”

Tomra and a handful of other recycling companies recently filed suit against the state, demanding the funding be reinstated.

Although there is still enough money in the fund to refund customers their 5- and 10-cent deposits, about $450 million has been taken from it. That money had been used, in part, to subsidize the parking lot recycling centers. It also funded the Regional Conservation Corps.

Two of the biggest companies in the state said they have closed about 100 centers so far — including two in Oxnard and one in Ojai — and more could close if a fix isn’t found.

H.D. Palmer, spokesman for the California Department of Finance, said two other factors beyond balancing the budget led to problems with the recycling center funding. Because of the weak economy, more people are bringing in recyclables to claim their refund. Usually, the recycling rate is slower, allowing the state to keep the deposit. And, he said, fewer people are purchasing discretionary items like soda that have refunds attached to him.

He said a reimbursement to the account could come in January when Gov. Arnold Schwarzenegger proposes a new budget, but it will still be subject to the protracted negotiations that have come to define the process.

“You’ve seen these recycling facilities close around the state and that will give a sense of urgency to act on the proposal as soon as we put it forward in January,” Palmer said.

The centers are set up in grocery store parking lots to encourage recycling, hence the subsidy from the state. Stationary recycling centers not at grocery stores are not being impacted by the cuts.

This summer, the Legislature passed a bill that would have reinstated the funding and increased the types of containers that have a deposit. But Schwarzenegger vetoed it, saying “while I recognize that without this bill there is an immediate hardship placed upon consumers and business because of the across-the-board funding reduction, the lasting effects of this bill are far worse.”

White said a quick solution is needed. He has already laid off 65 workers around the state.

“If there is not a solution in sight that makes financial sense, I don’t see this program lasting six or seven months,” he said.

There are dozens of the grocery store recycling centers around Ventura County.

Kevin Tippets, vice president of operations with NexCycle, which has closed about 50 centers statewide, including two in Ventura County, said the bulk of his funding to operate comes from the state subsidies. Without it, the centers are not profitable, so would inevitably close, he said. About 60 percent of their revenue comes form the subsidy, he said.

And without an easy place to recycle, customers would no longer have an incentive to do it, said Susan Collins, executive director of the Container Recycling Institute, a nonprofit that works on recycling issues.

“One of the things I talk about is what this does to the consumer and how unfair it is,” she said. “If they can’t get their deposit back, it will end up in the landfill and they are forced to pay for something they can’t get back, so that looks like a tax and not a deposit.”


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