Honolulu Closer To Ending Scrap-Yard Subsidy
A Honolulu scrap yard that gets an annual $2 million city recycling subsidy turned out to protest a bill that would eliminate the benefit.
But members of the public — including one other recipient of the subsidy — likened it to “corporate welfare” and asked the City Council to end it.
“We do get part of that subsidy, about $70,000 a year,” said James Nutter, founder of . “However, because of the money that is being paid to Schnitzer, the $2 million… for us to be competitive with them, we would like the subsidy eliminated.”
The council on Wednesday afternoon advanced a second-reading of , bringing the measure one step away from a full council vote. It also advanced first-reading of two other measures — and — that would reduce the subsidy instead of nixing it all together.
Schnitzer Steel got $1.9 million last year through a discount meant to reward corporate recyclers for keeping material out of the city landfill. The Portland-based company benefits the most of any company, and has heavily lobbied to keep the subsidy, also known as a tipping-fee discount.
Company representatives argue the subsidy helps them keep recyclable material out of the landfill, and stabilizes business in the volatile steel industry.
Schnitzer’s public affairs and community relations representatives brought nine local workers to the City Council meeting today, but the company was outnumbered by those who want the subsidy to end — including Nutter, whose Honolulu recycling company also benefits from it.
Schnitzer Steel’s government and public affairs manager, Jennifer Hudson, says the subsidy is fair because it is applied proportionately, based on the amount of waste diverted from the landfill. She told the City Council that the company does not support any of the measures related to the subsidy introduced so far, but that Schnitzer Steel is willing to work toward a “compromise that strikes a reasonable balance” between maintaining recycling as a policy priority and reducing city costs.
“We are willing to take a phased reduction to the tipping fee (discount),” Hudson said.
Five other members of the public testified in support of the bill, calling the subsidy unnecessary and in at least one case equating it to “corporate welfare.”
Schnitzer Steel’s former general manager, who was fired in December 2010 after nearly 20 years with the company, told Civil Beat last month that Schnitzer misled the City Council about its need for the subsidy.
The subsidy was first implemented in the 1990s as a way to encourage recycling.
