OKLAHOMA CITY—Oklahoma legislators have tapped the state's scrap tire fund despite concerns the fund will run out of money needed to reimburse tire recyclers. On June 30, State House Bill 1574 mandated the transfer of $4.3 million out of the scrap tire fund—which totaled $4.7 million—to the state's general fund. An additional $300,000 was shifted to the general fund on July 1.
The legislature's move leaves many wondering how Oklahoma will continue to pay its processors to pick up and shred tires, according to Brad Flaming, an environmental specialist with the Oklahoma Department of Environmental Quality.
The state has three main processors that pick up tires and are reimbursed based on how many tons they shred per month, Mr. Flaming said.
The fund was established in 1989 and currently has no sunset date. Its revenues come from a $1 fee on new passenger tires and a $3.50 fee on truck tires.
Although draining the tire fund doesn't signal an end to the state's scrap tire program, the amount of money currently being paid to processors is about equal to what tire dealers are collecting, Mr. Flaming said.
The state probably still can operate the program for another three to four months, but recyclers are unlikely to receive their payments each month, he said.
"I can't say for sure if the fund's going to grow or if it's going to go down," Mr. Flaming said. "It's kind of in question right now.
"I personally don't think there's enough money to run the program," he added.
The fund's depletion raises concerns recyclers may refuse to collect scrap tires, thereby causing illegal dumping to increase.
Already, Duncan, Okla.-based Four D Corp. has threatened to cease collections in protest of the legislature's action, Mr. Flaming said.
Tire Business spoke with a few dealers, all of whom disagreed with the state's decision.
"I do not approve of it. I didn't approve of the waste tire fee in the first place because I could never figure out what they were going to do with those tires," said Mary Helen Swanson, president of Swanson's Tire Co. in Oklahoma City.
Ron Smith, president of Colbert Tire Service Inc. in Duncan, Okla., added that, in his opinion, "It's a lot like every other surplus that we have anywhere in government.... Every time the representatives find a surplus, they want to spend it somewhere rather than use it for what it's intended," he said "I don't see at this point how they can justify robbing the whole fund and just putting it over in general funds."
Approximately 3.2 million scrap tires are generated each year in Oklahoma, Mr. Flaming said. Approximately 188,000 remain in dumps.
In Oklahoma, 49 percent of recycled tires go toward civil engineering projects; 34 percent are converted into tire-derived fuel; and 17 percent are used in rubber products such as mats and playground material, Mr. Flaming said.
Michael Blumenthal, executive director of the Scrap Tire Management Council, said that although Oklahoma isn't the first state to raid its scrap tire fund, the legislature's move ignores the fact the state still has scrap tires to clean up.
"It is unfortunate," he said. "The simple fact that they can't spend the money fast enough doesn't mean that it's there for the taking."
In recent years, Maryland tapped $4 million from its scrap tire fund for general purposes. Wisconsin ended its tire fund and transferred the revenue to its general fund as well.
If Oklahoma retained a surplus after completing all its scrap tire projects, then tapping the fund for other state expenditures would be fine, Mr. Blumenthal said. Otherwise, the state shouldn't have touched the fund.
"This (fund) was specifically legislated for tires," he said.