Waste ‘tipping’ fee increase not included in House budget approved Wednesday

Updated, 7:44 p.m., 5/9/24

A key piece of environmental legislation that was part of Gov. Gretchen Whitmer’s proposed budget was absent from the $80.9 billion Fiscal Year 2025 budget passed Wednesday night by the Michigan House.

When Whitmer laid out her budget plan in February, one of the proposals was a nearly 13-fold increase in so-called “tipping fees,” or those fees charged to dump waste in Michigan. Unlike surrounding states like Ohio, which charges $4.75 per ton, and Wisconsin, which charges $7 per ton, Michigan only charges 36¢ per ton of waste placed into the state’s landfills.

Whitmer’s plan would have increased that to $5 a ton, creating an estimated $80 million in revenue that would be used for waste cleanup and remediation of contaminated sites for possible brownfield redevelopment. 

However, the $80.7 billion Fiscal Year (FY) 2025 budget approved by the Democratically-controlled House on Wednesday stripped that increase out of the bill funding the Department of Environment, Great Lakes and Energy (EGLE). 

State Rep. Rachel Hood (D-Grand Rapids) is chair of the House Environment, Great Lakes and Energy Subcommittee, and the sponsor of HB 5499. She told reporters Wednesday that more work was needed to make sure the proposal did what it was intended to do, and they simply ran out of time.

“I think we have a lot of negotiating to do, some more consideration for a couple of key factors,” said Hood. “One is that a leap from 36¢ per ton to $5 per ton will have a disruptive impact on the economy, so I think we need more time to talk about graduated steps forward in the legislation. In addition to that, we need to make sure that some of that revenue is moving directly into local governments who are doing the work of managing our waste. Discussions need to happen about what that looks like, what the need is, etc.”

Hood hopes they can workshop the bill over the course of the summer and fall and hopefully have an agreement on how best to address what she admitted was  an “enormous discrepancy” between Michigan’s tipping fees and those of nearby states. 

“It is an issue that we need to address for our communities, but I don’t think it’s going to happen within the timeline of this budget, and it would be irresponsible to try and rush something of this magnitude,” she said.

Hood indicated that considerations about tipping fees need to revolve around needs at the local government level to transition the way that they are managing waste, whether through composting or recycling programs. 

“Michigan communities are lagging behind in these areas, and they need help and assistance and support from the state in order to make those transitions and get those programs in place,” she said.

The tipping fee increase proposal isn’t completely dead this budget cycle, as the state Senate plans to pass its version Thursday, which currently keeps the $80 million as a line-item, but not as new revenue. 

State Sen. Jeff Irwin (D-Ann Arbor), who sponsored SB 768, the Senate version of the funding for EGLE, told the Michigan Advance that the maneuver will allow for further discussion and indicated there is still a chance it could find its way to Whitmer’s desk once the final bills go through conference committee. However, he said the fee itself has to be authorized by statute and that simply putting it in the budget doesn’t enact it.

Meanwhile, Hood says the state is facing a much more pressing issue of adequately funding water infrastructure, with a $19 billion backlog in needed repair and replacement projects that have accumulated over time. She said previous budgets only chipped away at the problem, which she likened to delivering “million-dollar solutions to these billion-dollar programs that are inadequate.”

Hood said Whitmer’s budget “lacked full investment in modern infrastructure,” and that at the House level, they worked to address that issue which was made even more difficult without the additional revenues the tipping fees would bring in.

“We were able to purpose $82 million for our state revolving loan funds for drinking water and clean water, those are wastewater and drinking water funds, and we were able to put $50 million into that line replacement,” she said, noting the House budget plan created more flexibility in those funds because while communities are able to compete for funding, they typically can’t finance the entire project. 

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“When we fix roads, we also, if we’re smart, are fixing water infrastructure at the same time, and that’s what we’re talking about when we talk about asset management,” Hood said. “So, we want to open up a street one time, fix everything that’s in there, and then get it back into use as quickly as possible for our residents [and] for the economy.”

Hood said that ultimately the patchwork budget fixes have to give way to more sustainable infrastructure funding, which has been put off for decades due to partisan disagreements.

“We have been unable to move bills around corporate accountability for polluters,” she said. “We certainly are unable to move any new discussions on new revenue.”

Hood noted the fierce political resistance Whitmer faced in her first term to a gas tax proposal that would have served as a long-term solution for transportation funding.

“The tricks in the bag are being refused by the business community. Those are the same folks who, I’ll stop … I’ll stop there,” Hood said to reporters, before pausing and finishing her thought.

“Campaign finance reform, folks. It’s great,” she said.

Correction: This story has been updated with the correct tipping fee Michigan currently charges.