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Milwaukee is considering suing the state over a cut in recycling funding the state Department of Natural Resources announced in April. The city expects to lose about $1.3 million in funding for its recycling program. The cut could mean a reduction in recycling pickups in the city.

In early April, the DNR announced it would be awarding $19 million in recycling grants to municipalities, instead of the $32 million city leaders around the state were expecting. In Milwaukee, Mayor Tom Barrett said the city would receive $3.4 million instead of the expected $2.1 million.

(photo by adrian palomo)

“A mid-year reduction in state aid of this size is unprecedented and unmanageable,” Barrett writes in an April 18 letter to Gov. Scott Walker’s DNR secretary, Cathy Stepp.

The grants, awarded to municipalities each year under a state formula, come from the state’s Recycling and Renewable Energy Fund. It’s replenished each year with “tipping” fees that municipalities pay to landfills whenever they dump trash.

Barrett argues the fund is a “trust fund” and the DNR had no legal right to lapse some $13 million back to the state’s general fund. The money was moved to help balance the general fund by the end of the state’s current fiscal year (which expires on June 30) as required by state law.

During his campaign, Walker criticized similar transfers from other state trust funds – particularly the state transportation fund – done under the administration of Gov. Jim Doyle, calling them “raids.”

tom barrett

In 2010, the state Supreme Court ruled that a $200 million “raid” from a state medical malpractice trust fund, used to balance the state budget in 2007, was illegal. State doctors are required to pay into the fund, which benefits victims of medical malpractice. The court ordered the state to repay the money, and the payment was included in Walker’s proposed 2011-13 budget, which says the transfer was “unconstitutional.”

Barrett says in his April letter the DNR’s transfer from the state recycling fund was “at minimum irresponsible and perhaps even unlawful.”

Stepp responds in an April 22 letter, “I understand the budget challenges that all levels of government face … Virtually all lapsable local assistance funds within the Department of Natural Resources were significantly reduced or totally eliminated to help meet our obligation to help balance the state’s budget shortfall.” She added, “The recycling grants to responsible units were no exception.”

scott walker

Then, in a May 4 letter from City Attorney Grant Langley, the city’s position hardened. He writes that under state law, the recycling fund is established as a segregated fund that can’t be lapsed back to the general fund.  The statute Langley references reads: “There is established a separate, nonlapsible trust fund designated as the recycling and renewable energy fund.”

Langley calls the cut in recycling grants “illegal” and says the city plans “to explore all options available … to challenge the reduction.”

Barrett spokeswoman Jodie Tabak says the city is awaiting a response from the DNR, adding, “We are seriously considering legal action.”

Grant Langley

State Department of Administration spokeswoman Carla Vigue says the state is reviewing the letters from Barrett and Langley. She declined further comment.

Walker spokesman Cullen Werwie says the lapses from DNR funds were necessitated by Gov. Jim Doyle budget. In fiscal year 2010, Doyle also lapsed money from the recycling fund, according to Werwie. “While Mayor Barrett is now threatening to sue the state over this lapse, why did he not speak up when Gov. Doyle made a lapse from the same fund?”

Werwie, however, did not identify the size of the lapse done under Doyle’s administration.

Milwaukee officials have proposed cutting recycling pickups to every six weeks (down from four or fewer) in response to the cut in DNR funding. Barrett has said the city cannot raise fees or taxes or negotiate employee concessions mid-year to replace the lost funds.

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