State has diverted millions in fees

AJC investigation: Critics see fees as backdoor taxes

The state collected more than $30 million in fees from Georgians last year for programs designed to clean up landfills, tire dumps and hazardous sites and to improve 911 services.

The governor and state lawmakers put less than $2 million of the fee revenue toward those programs.

Instead, the money went into the state’s general kitty, where it could be spent on everything from education and prisons to hometown projects, economic development and farm programs.

Since the state began collecting the fees, the governor and lawmakers have diverted almost $150 million for things other than the intended purpose of the fees, according to figures from the Association County Commissioners of Georgia.

They did it despite the fact that the laws they passed to create the fees intended the money for those programs. However, the laws also send the fees to the general treasury, giving lawmakers the opportunity to divert the money. Lawmakers say it would take a constitutional amendment to dedicate the money.

Some now argue that the fees have become backdoor taxes to fund state government.

The diversion of the money has county officials and some environmentalists vowing to fight the renewal of laws authorizing the fees — one of which comes up for consideration this session — if lawmakers can’t guarantee the money will go for cleanups and 911 services.

Kelly McCutchen, president of the Georgia Public Policy Foundation, an Atlanta think tank, doesn’t blame them.

“The raiding of these trust funds has been very fiscally irresponsible,” McCutchen said.

But House Appropriations Chairman Ben Harbin, R-Evans, said the state’s fiscal crisis has meant lawmakers have to look everywhere they can for money. Lawmakers have cut $3 billion in spending over the past few years.

“When those revenues come into the general fund, we have to use it for education and health care, things like that,” he said.

If the fees were used for their intended purposes, Harbin said, “We have to cut some more money somewhere else, and that’s going to be education, health care or transportation.”

Groups who have traditionally supported the user fees have been complaining the past few years about Gov. Sonny Perdue and lawmakers diverting the money.

In the early 1990s, lawmakers approved two pools of money, the Solid Waste and Hazardous Waste trust funds, to pay to clean up hazardous waste sites, to update unlined landfills, to clean up scrap tire dumps, to improve and expand solid waste collection and recycling and to eliminate open dumps along roads and streams.

Much of the money for the hazardous waste fund comes from landfill fees that are generally passed on to Georgians when they pay for garbage pickup. The solid waste program is funded by the $1 per tire charge Georgians pay when they buy new tires.

Combined, the two programs have collected more than $360 million over nearly two decades. About $238 million of that has been appropriated to those trust funds by lawmakers, according to the county commissioners’ group. The rest has gone elsewhere.

Last year, the state collected $23 million in fees for those programs, of which $1.9 million was appropriated to the trust funds.

The county commissioners’ group said there are more than $70 million worth of remediation projects that have been requested but aren’t being funded because the money isn’t available.

Three years ago, the state started collecting fees on the purchases of prepaid cell phones. The money was supposed to pay for improvements at 911 call centers around the state. Through the end of fiscal 2010, about $25.7 million had been collected, but none of the money had been appropriated for 911 programs, the county group said.

The Solid Waste Trust Fund tire fee comes up for renewal this year, the hazardous waste fees in 2013, the county group said.

Will Wingate, a vice president of the Georgia Conservancy, said his environmental group can’t support their renewal without assurances the money will go for cleanups.

“It [the fee] has become just another source of income for them,” Wingate said.

Todd Edwards of the county commissioners association said state officials are “eroding the public trust, eroding transparency” by not using the fees for their intended purposes. “It has become a tax,” he said.

The “t” word is anathema to Republican leaders, who have promised not to raise taxes.

But “user fees” are different because they are designed to pay for specific things — like road maintenance, court services or landfill cleanups. Last session, the GOP majority pushed and won approval for user-fee increases worth about $90 million a year.

Harbin said lawmakers can’t guarantee fees like those for the solid waste and hazardous waste trust funds will go for their intended purposes unless they are “dedicated” to those causes in a constitutional amendment.

But that means none of the fee money could be legally committed to its intended purpose until after the 2012 elections, because that’s the next time voters can consider amending the constitution.

Senate Natural Resources Chairman Ross Tolleson, R-Perry, has backed the fees in the past and he said he will support renewing the tire fee during the 2011 session. Tolleson would like to see if the fees can be dedicated for cleanups without a constitutional amendment, but not necessarily this year, when lawmakers face another $1.2 billion to $2 billion budget shortfall.

“When you get into years of budget deficits, you use whatever money is available in the general fund,” Tolleson said. “I am for dedicating [the fees]. But you really can’t just flip a switch in a budget deficit time.”

Problems with the user fees aren’t new. In 2006, before the current budget crisis, the state Department of Audits looked at user fees and found they were not administered consistently, were often outdated and sometimes were unrelated to the cost of the services they were intended to fund.

A follow-up audit, released in 2009, found little had changed.

Lawmakers hoped they at least partially addressed some of the inequities last year when they updated the fees. But they didn’t raise or lower fees universally, so some that hadn’t changed for decades were left alone, in some cases for political reasons.

Edwards and Wingate said the diverting of the environmental funds is particularly troubling because funding for the Department of Natural Resources has declined more than 40 percent in the past few years.

“You have a department that can’t even travel to inspect these sites,” Edwards said.

The department said that, despite the fees, there is no funding available this year for scrap tire cleanup, emergencies or abandoned landfills.

McCutchen said user fees, like the tire fee, shouldn’t bring in more than is needed to pay for the service or program provided. They shouldn’t be used, he said, to balance the budget.

“These user fees should be set at the cost [of the service]. If it’s anything more, it’s a tax. If it’s anything less, it’s a [state] subsidy,” he said.

“In this case, the law says, ‘it shall be used for this.’ We are adamantly against the practice [of diverting] and we think it is irresponsible and it needs to be fixed. It’s very disingenuous.”

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