End to Subsidy for Scrap Yard Passes — With a Catch
After weeks of heated debate, Honolulu City Council members unanimously voted Wednesday to eliminate a subsidy for recycling companies.
But ‘s passage could still be undermined by two other, conflicting measures that would merely reduce the subsidy amount. The City Council advanced those bills, too, which now return to the Budget Committee for further review before a full and final council vote.
At the center of debate over the subsidy is Oregon-based scrap yard Schnitzer Steel, which benefits the most from the subsidy. It saved about $1.9 million last year out of a total of $2.1 million in discounts benefitting private companies. The savings come into play when recycling companies dispose of non-recyclable material at the city landfill, but pay 80 percent less on disposal or tipping fees.
Those who supported ending the subsidy have called it “corporate welfare,” while Schnitzer and others who opposed Bill 47 say the subsidy offers an important incentive to recyclers.
In a surprise change of position, City Council members Ann Kobayashi and Ikaika Anderson voted in favor of Bill 47. Both had been critical of the measure in committee meetings.
“I have not seen any information that warrants a continuation of this subsidy,” Anderson said. “My requests were flat-out refused. For those reasons, I cannot return home at the end of this council meeting, if I vote against this measure, and explain to my constituents satisfactorily my reason for doing so.”
But it appears both Anderson and Kobayashi, as well as City Council member Ernie Martin, voted to eliminate the subsidy knowing that and could still be passed into law as well.
“The only reason that I supported voting for Bill 47 was that there were other bills coming forward to address these issues,” City Council member Ernie Martin said.
City Environmental Services Director Tim Steinberger, whose department introduced Bill 47, called the situation “confusing.”
“We now have three bills that address the same issue,” Steinberger said.
Still, he said he’s willing to consider a phased approach.
“I think that one of the things that’s become obvious over time is that there are some concerns that just cutting this off instantaneously may have detrimental impact to recyclers,” Steinberger told Civil Beat after the council meeting. “These concerns do have merit. As Bill 37 suggests, we should consider tapering it down. But what we would want to see is a (sunset) date, in other worse it’s only effective until this time, and then it ends.”
Other council members have less patience.
“I can’t say I’ve heard any compelling testimony why we should consider continuing the current subsidy,” said City Council member Breene Harimoto.
“We have to put an end to it, and I think Bill 47 today put an end to it,” City Council member Tom Berg said. “I’m putting it to rest.”
Members of the public also urged council members to stick with Bill 47. One woman who regularly testifies before the council, Natalie Iwasa, said she sees any subsidy as “motivating the wrong behavior.”
“We shouldn’t be paying for people to dump stuff in the landfill,” Iwasa said.
She went on to quote from what she said was a sustainability pamphlet that Schnitzer makes available to its investors.
“It says, ‘As a world leader, in the metals recycling sector, we are constantly demonstrating that it is possible to thrive as an environmentally responsible business,'” Iwasa said. “That’s what they are telling their shareholders, and I urge you to push them to that end in Hawaii, to be sustainable.”
