Town profiting from garbage?
Editor, The Smithfield Times:
Last week’s ST article concerning the loss of recycling service in Smithfield (“Town residents lament loss of recycling”) triggered some thoughts about the subject beyond the opaque and sometimes inconsistent comments from Bay Disposal regarding the continuation (or not) of recycling for a fee. But let’s leave that for others to argue.
The whole matter of refuse collection in Smithfield has seemed to me to be a bit of “abracadabra” ever since the town’s proposal in 2019 to raise money by charging a $10 per month fee to Bay customers. At that time, for the sake of fairness to lower-income families, the town announced that it had instead changed the proposed trash fee to a 3-cent addition to the then 16-cent real estate tax, and of course it is still being collected today. The town’s fiscal year 2020-21 budget gives a total real estate tax revenue estimate of $2,173,349, so in alignment with the town’s statement in 2019, the part of that collected in support of trash collection by the added 3 cents would be 3/19 of the total real estate tax revenue, or about $343,160.
The town budget shows a projected fiscal 2020-21 recycling cost of $137,090, so that the pro rata portion of that for the fiscal year through the mid-January cessation of recycling is $74,257.
Finally, the budget states an estimated $350,015 fiscal 2020-21 new fee revenue for “Refuse and Recycling Collection Fee” and a $224,580 projected expenditure for “Trash Collection.”
The economic shock of COVID-19 has forced Smithfield, like all municipalities everywhere, to belt-tighten and scrape the bottom of the barrel for any scraps of new revenue it can find to supplement reduced local tax revenues. In this particular instance, it seems appropriate to wonder if trash collection operations in Smithfield have been given a new role as a net revenue source.
If the 3-cent real estate tax added was a trojan horse in 2019 that has been “retired” from its originally advertised role as a source to support payments for trash collection costs, we should expect the town to say so and tell us that the new $350,015 fee functionally replaced it, and furthermore to tell us honestly that the added 2019 3-cent real estate tax was, after all, just a general tax increase to pay into the General Fund.
If that is the case, then the fiscal 2020-21 net profit specifically from trash/recycling operations will be “only” $51,178 ($350,015 – $224,580 – $74,257). In fiscal 2021-22, based on current budget summary figures, the trash operations profit should grow to about $125,000 or so since there will be no more recycling expense then.
I’m an engineer, not an accountant, so I may be missing some arcane bookkeeping conventions and details best understood by someone like our very capable town treasurer, but I thought I’d give it a shot.