Trash agency wants $20 million bailout

Without taxpayer bailouts, the bonds for Camden County's money-losing trash operation would barely be worth the garbage it takes in, according to credit agencies.

The Pollution Control Financing Authority of Camden County has received $152 million in state solid-waste subsidies during the last decade - more than any other county in New Jersey has gotten - to pay the debt on an incinerator built in the early 1990s.

But that's not enough.

In recent days, leaders of the authority, which handles trash disposal for all but one of Camden County's 37 municipalities, have pressed the state for yet another bailout. If their efforts fail, the Fitch rating agency projects, the authority will default on its $25 million final bond payment, due Dec. 1.

The authority's current budget counts on $20 million in state aid - more than the total that New Jersey set aside for multiple counties.

Collingswood Borough Commissioner Joan Leonard, who has pressed for more environmentally friendly alternatives to the South Camden incinerator, called the subsidy level "just mind-boggling."

"How does the state happen to have that much money to keep bailing everybody out when our taxes keep going up and up and up?" she asked.

Treasury Department spokesman Bill Quinn said the state was working with the authority on a solution for the debt-service payment, "and our goal is to have it in place in advance of that deadline so we avoid any sort of market turmoil."

But he added: "We don't know what the final solution is going to be at this point, and it may or may not involve subsidies. There's no commitment on that at the moment."

The problem began in the 1980s when the state required counties to handle all of their own trash. Camden and other counties borrowed millions of dollars to build incinerators and other disposal facilities, and they charged towns and businesses high tipping fees to cover the cost of the debt.

But in 1996, a federal court ruled that New Jersey's rules were an unconstitutional violation of interstate commerce, ending the guaranteed supply of trash to the Camden incinerator. Since the market opened up to outside competition, tipping fees there have dropped from more than $90 per ton to $65 - not enough revenue to pay off the bonds.

The lower rates are saving taxpayers money in one pocket by taking money out of another.

Five counties received state aid to pay off solid-waste debt last year, and $16.2 million was set aside in the budget Gov. Christie signed in June.