Jan 21 - LAO Releases Bottle Bill Recommendations

The Legislative Analysts Office (LAO) office has released its recommendations regarding the Bottle Bill Fund imbalance and the Governor's proposal.

The LAO recommends to:

  1. Disapprove General Fund Loan Payment. Given the state’s current fiscal situation, we find that the $55 million repayment from the General Fund in the current year is not sufficiently essential to BCRF-funded programs and should not be made. (CAW comment: This recommendation ignores the pending lawsuit and its contention that the state is legally obligated to begin repayment.)
  2. Approve Acceleration of Payments. The Department of Resources Recycling and Recovery estimates that accelerating the submittal of collected CRV revenues would increase the fund balance by $100 million in the current year. The LAO recommends the Legislature approve the proposed statutory change and that the additional revenues be used to:
  3. Make operators of recycling centers and convenience zones "whole" for the current year by not only fully funding the remaining six months, but also repaying funding that was not met from July to December of 2009.
  4. The LAO does not recommend continuation of Beverage Manufacturer Processing Fee Offsets.
  5. Fund other program expenditures in line with the Legislature’s current recycling program priorities.
  6. Do not take up proposed ‘structural changes’ in the budget session, but rather in the regular session.
  7. The LAO proposal has 2 Alternatives for remaining 14581 programs (curbside, corps, etc.) at an 80% reduction for the balance of the year: Alt 1: all programs would continue to face 80% reduction; Alt 2: LCC’s and Quality Incentive would be funded at 50%, all others at ‘zero’.

Conclusion: The LAO analysis concludes that with the roughly $95 million in one-time revenue from the ‘acceleration’, there are sufficient funds to pay Handling Fees for the current budget year, including retro-active payment to July, 2009. However, they maintain roughly 80% reductions for remaining 14581 expenditures and ‘zero’ funding for processing fee offsets to beverage manufacturers.

Regarding the 2010-11 fiscal year, LAO concludes that sufficient fund status data does not exist to take action at this time, and so that should be addressed by the regular budget session.