Lawmakers begin deciding how to address Arkansas scrap tire problem

With a week left before they plan to adjourn, Arkansas lawmakers took the first step Friday to addressing problems with the state’s scrap tire recycling program.

It became clear last summer after the state’s largest tire recycling facility temporarily shut down that legislative action was needed to fix the underfunded program.

On Friday, the Senate Public Health, Welfare and Labor Committee approved one of the two competing bills offering solutions.

Senate Bill 508 by Sen. John Payton, R-Wilburn, proposes eliminating the current $3 tax on the removal of used tires. It would instead impose the fees on purchases of new tires and vehicles, including the addition of golf cart and lawn mower tires.

Payton in an interview on Friday said the current program is broken. He said he felt his solution best balanced all of the competing interests: costs to the consumer, the state budget and environmental concerns about tire dumps.

“Nobody wants to pay more money or pay a fee, but everybody acknowledges these tires have to be dealt with in some way,” Payton said.

Rep. Lanny Fite, R-Benton, an architect of the 2017 law that created the current tire recycling program, has a competing House bill that proposes eliminating the program altogether and privatizing the disposal of waste tires.

Fite said Friday he would wait to see what happens with Payton’s bill before deciding whether to pursue his.

“I’m for privatizing,” he said. “But if the [other lawmakers] are not, I’d be wasting my time.”

The problem

Fite’s 2017 law overhauled the state’s used tire program and created the $3 rim removal fee for all tire customers. (It’s only $1 if the tire is being replaced by a used tire.)

Retailers remit those fee collections to the state, and in exchange, may dispose of scrap tires at licensed facilities. (Individuals may dispose of up to four tires a month at state-permitted facilities free of charge.)

The rim removal fees fund the Tire Accountability Program, and it’s that revenue that fell short during the 2nd quarter last year. When those shortfalls occurred in the past, the state made up for it with surplus funds from the tire program that was in place before the 2017 law change.

But that surplus was depleted, and the $3 fee is inadequate to cover the costs of the program.

Inflation and high fuel prices made matters worse.

When the program ran out of money in August, some tire recycling facilities stopped accepting scrap tires, leaving piles of old tires to collect at car dealerships and tire shops.

Lawmakers in October approved $1 million in stop-gap funding to shore up the program until the General Assembly’s current session.

A recycling program is necessary because tires sitting in dumps or landfills create a host of public health hazards. They fill up with water, attracting mosquitoes, rats and other disease-carrying varmints. And tires can take hundreds of years to decompose in landfills.

Competing solutions

Though the Senate committee approved Payton’s bill unanimously, officials from the state energy and finance departments testified that Gov. Sarah Huckabee Sanders’ administration opposed the bill because it would increase the amount of fees charged.

State budget officials projected that the Payton’s bill would introduce $2.3 million in new fees on new vehicles and $318,000 in fees on new trailers. A full fiscal impact study is forthcoming.

Some committee members griped at officials from the Division of Environmental Quality for criticizing Payton’s bill without offering solutions to the problem of their own.

Payton said he believes his proposal would ultimately cost Arkansans less because the tire zones could negotiate favorable recycling rates because they control the supply. Under privatization, Payton said that prices would hike and some would opt to illegally dump their tires.

However, Payton said he’d spoken with the governor’s office and was still open to making changes to the bill even though time is running short.