California officials no longer envision immediate cuts to programs funded by the state’s beverage container fund – because the fund’s financial future looks brighter.
That’s according to a recent presentation by Susan Collins, executive director of the Container Recycling Institute, based in Culver City, California. Her analysis included data from an April financial report from CalRecycle, the state entity that administers waste management efforts including the redemption program.
“What we do know now is the fund will have stability through the middle of 2018,” Collins told participants during an April 15 webinar.
The previously proposed cuts would have affected nearly all stakeholders involved in container recycling in the state. In March 2014, CalRecycle proposed cuts to payments it makes to redemption centers, curbside collectors, processors and recycling companies. It also proposed eliminating the current recycling grants program for local governments. Lastly, it wanted to increase the fees beverage manufacturers pay to support recycling.
Under California’s bottle bill, consumers pay a nickel or dime deposit, depending on the container size. The funds feed the beverage container recycling fund, which collects about $1.2 billion a year. The state keeps money from unredeemed containers to pay for administration, enforcement, recycling grants, recycling subsidies and more.
In fiscal years 2011-12 and 2012-13, expenditures exceeded revenues by about $100 million each year, according to the presentation. As recently as a year ago, CalRecycle estimated the fund’s cash balance would plummet into dangerously low sums in the first quarter of 2016.
The forecast has improved, partly because of state regulators’ efforts to tighten the program, including cracking down on fraud.
CalRecycle tightened rules for redemption centers, where most bottles are returned, in several ways. It reduced the number of containers that can be redeemed per person each day, forbid payments for commingled loads (those containing a mix of deposit and non-deposit containers), mandated training and required the use of state reporting software.
CalRecycle also hired additional auditors, registered hundreds of additional distributors and manufacturers that should have been participating in the program and boosted efforts to collect deposits, she said.
What’s more, California took steps at the state line to track importation of bottles to ensure they weren’t being illegally redeemed, and the result has been a drop in imported loads, Collins said.
Legislators also gave CalRecycle the ability to suspend payments to recycling centers found guilty of fraud, and they shifted funding for the California Conservation Corps from the beverage container fund to other funds.
The program changes have resulted in a drop in the redemption rate. At the same time, more consumers are buying drinks, resulting in a revenue boost, she noted.
The redemption rate for fiscal year 2014-15 is projected to be 81 percent, down from 85 percent in calendar year 2013. The “break-even” rate, or the redemption rate at which there are enough unredeemed containers to pay the fund’s expenses, is projected to be 79 percent. That leaves a gap of only 2 percentage points for fiscal year 2014-15, down from a 10-percentage-point gap in 2013.
CalRecycle’s program changes have also resulted in a shift away from redemptions at centers and toward curbside collections, Collins said. Historically, about 8 to 10 percent of deposit containers were collected at the curb, but it might be closer to 15 percent now, Collins said.
