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February 2007

Tennessee tire fee increase draws industry concern

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

The Rubber Manufacturers Association (RMA) 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 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.

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.

According to RMA’s 2005 Scrap Tire Report Tennessee generates 5.9 millions tires annually with 72 percent of scrap tires sent to market.

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