State catching up
on recycling payments

State officials acknowledge being slow to reimburse the recycling companies that collect beverage containers from consumers, but say they are getting back on track.

Executives from two companies -- Atlas Recycling on the Big Island and Island Recycling on Oahu -- complained that the delay was putting them in a tight spot.

"We did get behind in March," Larry Lau, the state Department of Health's deputy director for the environment, said yesterday. "We think we're back to (paying invoices in) two weeks now and intend to stay there."

Atlas Recycling stopped staffing six weekend redemption sites last week, owner Mike Allen said yesterday. The company was due more than $150,000 from the state for deposits it had already refunded to consumers who returned empty bottles and cans under the state's new recycling law, he said.

An Island Recycling executive threatened to close one of his two redemption centers until the company received $250,000 in reimbursements from the state.

Apparently, Lau said, the department seeking payment for invoices from both the first and second quarters triggered a review by the state Department of Budget and Finance that slowed payments. The Health Department now has procedures that should ensure that doesn't happen again, he said.

"We are current with our beverage container program payments and we have no unpaid invoices older than two weeks," Lau said, noting one exception -- Island Recycling.

The company owes $146,000 in unpaid general excise taxes to the state and the state Tax Department put a lien on the $250,000 the Health Department owed for redeemed empties, Lau said.

Island Recycling owner Jim Nutter said he didn't learn until yesterday that the state was seeking a tax lien.

At issue in the unpaid excise tax was income Island Recycling received from the city to subsidize its cost of shipping out glass for recycling, Nutter said.

"We thought that since we didn't keep the money that we shouldn't have to pay a tax on it," Nutter said. "Our tax attorney said the same thing, but we disputed it and we lost."

Until yesterday, Nutter said, he thought the company had an agreement with the Tax Department to pay the excise tax over 12 months, he said.

Nutter said if the state releases the $100,000-plus not sought under the tax lien then Island Recycling can keep making deposit refunds to customers. The company runs redemption centers on Dillingham Boulevard and Sand Island Parkway.

"We've always been an up-front, open company and tried to do our best to do what's right," Nutter said.

His next step will be to file another $250,000 invoice with the state for the latest batch of redemption refunds.