Illinois, the Garbage State. It kind of has a ring to it.
More Top Picks Best Cold Brew Coffee Makers
Hey, you take your distinctions where you can find them. If Illinois wants to spend $300 million a year in taxpayers’ money to become the trash-burning, dioxin-spewing capital of the free world, what’s not to like?
Think of it this way: you get more pollution in the air, and you get to pay for it.
The Illinois General Assembly has been too modest to boast about the efforts it has made to lure a tax-subsidized smokestack into every back yard. So, allow me.
Right now different companies are planning to build as many as 25 incinerators to burn waste in Illinois. Everyone will get a whiff of the action, but a fourth of the burners are concentrated in the south and southwest suburbs.
Ford Heights will burn tires. McCook will burn wood. Robbins and Summit will burn garbage. Harvey, which must have won the lotto, will burn 48 tons a day of medical waste.
You can count on one hand how many incinerators will open this year in the other 49 states. That’s because burning garbage, even with a nice federal subsidy, is a losing business.
Except in Illinois, which has cornered the market on smoke-belchers because the lawmakers have decided that no price is too high for the privilege of burning everyone’s trash.
The General Assembly has lured all of these incinerators with something called the Illinois Retail Rate Law. If the incinerators get built, the state will kick in as much as $20 million every year to make each of them worth operating. Estimates of the tax loss range from $300 million to $500 million if most of them go through.
The Retail Rate Law, which was passed in 1988, is a masterpiece of government overreach into private markets. It’s a little convoluted, the kind of law only lawyers could write, so be patient.
It works like this:
A company builds an incinerator that burns garbage and, in the process, produces electricity. It sells the electricity to the local power company, which has to buy it whether or not it needs the power. Federal law says so. The feds also prop up the price of the electricity through a tax subsidy.
The Illinois legislature figured that if one government subsidy is good, then two government subsidies must be wonderful. It passed the Retail Rate Law, which greatly subsidizes the cost of electricity sold by incinerator owners to utilities such as Commonwealth Edison. No other state offers that kind of subsidy.
Edison is required to pay the incinerator a grossly inflated price for the electricity–electricity, by the way, that Edison has the capacity to make on its own at much lower cost. Edison is allowed to take a state tax credit on the difference between the real cost of the power and the inflated price.
So, if Edison pays the incinerator $3 for a measure of electricity that is really worth only $1 on the market, then Edison knocks $2 off of its tax bill. It really adds up. One incinerator being built in south suburban Robbins is expected to claim $15 million in state-subsidized payments every year for 20 years. That’s $300 million.
The developers of the Robbins project have said the state subsidy is their only reason for being here. If they don’t have the subsidy, they can’t make any money.
The Robbins incinerator has been sold as an economic development tool for a desperately poor town. It will put 80 people to work. That works out to $187,500 a year in state subsidy for each worker.
We could just pick 80 people in Robbins and give them $187,500 a year to stay home, and call it economic development. But then we wouldn’t get the benefit of all that incinerator smoke.
And, anyway, the state will probably get all the money back. The subsidy is considered a no-interest loan to the incinerator developers. After 20 years, they’re supposed to start paying back the money.
Which they undoubtedly will. Unless they look at what they’ve got–an aging incinerator and a $300 million debt–and decide to walk away. But look on the bright side. The state government will get what it has always wanted: an old smokestack.
When the Retail Rate Law was passed, it was supposed to be good for the environment. In just a few years, we were told, the state would run out of landfill space to bury the garbage, so we had no choice but to burn it.
Surprise! We didn’t run out of landfills. Illinois has a third more landfill space today than it had in 1988. That’s largely because of the tremendous impact of recycling.
But the incinerators are still going ahead. The environmentalists and the incinerators owners, naturally, quibble over how much pollution will go into the air. But the Illinois Environmental Protection Agency says that municipal waste incinerators typically release arsenic, cadmium, dioxin, chromium, PCBs, lead, mercury and other things you wouldn’t serve for dessert.
More Top Picks Best Mechanical Pencils For Engineers
Some folks in the legislature have tried for the last few years to repeal the Retail Rate Law. Gov. Jim Edgar says he wants to kill it. The Republican leaders say they want to kill it. But somehow, the incinerator folks win each time.
They have some clout, and since nobody outside of a few environmental and community groups have raised much of a ruckus about this, it seems obvious that Illinois taxpayers are very happy to pay for the privilege of subsidizing the burners.
After all, if they don’t give hundreds of millions to incinerator operators, they’ll probably throw it away on something like schools.
Now, go outside and take a deep breath.