Proposal to Hike Tennessee Tire Fee Draws Industry Concern

RMA Says “Significant Review” Needed of TN Scrap Tire Program

For more information contact:
Dan Zielinski
(202) 682-4846
dzielinski@rma.org

WASHINGTON, D.C.January 11, 2007 - A proposal under consideration by Tennessee’s Solid Waste Advisory Committee (SWAC) that includes increased consumer fees on new tire purchases should include a significant review of the limitations of the state’s scrap tire program, according to a tire industry organization.

The Rubber Manufacturers Association said in a letter to state officials that Tennessee’s program, funding, and markets for scrap tires remain insufficient.

SWAC is considering an increase and expansion of the state’s tire fee by increasing the fee on new passenger and light truck tires from $1.00 per tire to $1.25 per tire, increasing the fee on large truck tires from $1.00 per tire to $5.00 per tire, and initiating a $1.25 fee per tire on all new car sales.

Preliminary estimates of the proposed fee expansion indicate a potential increase in tire revenues from $4.1 million to $6.2 million per year. RMA has urged SWAC to provide greater detail regarding the additional funds needed and how those funds may be allocated.

Consumer fees on new tires are used in many states to fund cleanup, enforcement and market development activities for scrap tires. Some states have diverted tire fee revenues to other purposes, which RMA says endangers scrap tire programs.

RMA said that increased revenues for Tennessee’s scrap tire program should stem from a review of the current program’s inefficiencies. “We believe that the current structure of the scrap tire program remains an inherent challenge to the efficient use of tire fee revenues,” says Christian Gullott, RMA director, government affairs.

According to RMA, Tennessee’s program costs, particularly for transportation of scrap tires, exceed other state programs. “Tennessee’s current fees do not meet the financial needs of the counties to administer their scrap tire programs,” Gullott wrote. He explained that counties are using the total amount of their funds to fund tire disposal, and therefore state funds are largely unavailable for enforcement activity, pile abatement, or market development.

“State scrap tire programs should be focused on the development and stimulation of sustainable markets for scrap tires. This must be both a central goal and a key component of any viable program,” explained Gullott. RMA has long known that developing efficient and self sustaining markets for scrap tires is the best management practice over the long term.”

According to RMA’s 2005 Scrap Tire Report Tennessee generates 5.9 millions tires annually with 72 percent of scrap tires sent to market. Overall, 290 million scrap tires are generated annually in the U.S. and nearly 87 percent are put to new uses in other markets such as fuel, civil engineering or used to make new products.

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The Rubber Manufacturers Association is the national trade association for the rubber products industry. Its members include more than 100 companies that manufacture various rubber products, including tires, hoses, belts, seals, molded goods, and other finished rubber products. RMA members employ over 120,000 workers and account for more than $21 billion in annual sales.