Dumping Waste Board Will Help California’s Tech Sector

Facing a projected $40-billion budget shortfall, Governor Schwarzenegger last week proposed eliminating a redundant state board that has become a symbol of cronyism and inefficiency in Sacramento. Unlike most boards and commissions, which offer a stipend of $100 per meeting, the six members of the California Integrated Waste Management Board (CIWMB) are paid $132,000 a year to attend four meetings a month. By partially funding this giveaway through a costly tax on the technology sector, politicians risk dulling California’s high-tech edge.

In 2003, California passed the nation’s first comprehensive law for recycling electronic waste (e-waste). Through a tax on televisions, laptops, and computer monitors, the CIWMB pays private collectors to recycle consumer electronics in a responsible way. This statute, however, contains no provisions for restraining costs, nor incentives for cutting waste. Without any legislative oversight, board members wield unilateral authority to raise taxes as necessary to keep the program afloat.

On January 1, the CIWMB hit consumers with a 100-150 percent tax increase on most electronics purchases included in the e-waste program. Inflating the cost of high-tech devices will drive down sales and further damage an industry already battered by the recession. Silicon Valley-based tech companies have shed more than 40,000 jobs since October, threatening one of California’s most powerful engines for economic growth. Next month’s transition to digital television will spur demand for state-of-the-art electronics, but the state’s high taxes could cause it to miss out on a critical opportunity for stimulating recovery and job creation.

Despite Gov. Schwarzenegger’s 2004 pledge to “blow up the boxes” and streamline government, the CIWMB remains an emblem of waste and excess. Appointments are based not on qualifications but political connections. The current chairwoman previously served as the governor’s scheduler. Last year, the governor appointed his former speechwriter as an “advisor” to the board at a yearly salary of $103,000, only weeks after ordering a hiring freeze. Most recently, he named former senator Carole Migden to the board as a favor to Senate President Pro Tem Darrell Steinberg.

Last June, Migden became the first legislator in 12 years unseated by a member of her own party. During her last year in office, she received a record $350,000 fine for campaign finance violations, pleaded no contest to misdemeanor reckless driving in a state-owned vehicle, and berated her staff so severely that they were sent home for their own protection. By appointing Migden to the waste board, Gov. Schwarzenegger disregarded the voters’ wishes to fire her, and instead offered her a $16,000 raise.

Rewarding legislators for poor behavior makes government less accountable to the taxpayers. To restore accountability, Sen. Jeff Denham recently introduced legislation to eliminate the CIWMB and consolidate its functions with the Department of Conservation. Denham’s bill (SB 44) aims to decrease operating costs and increase flexibility for the state’s e-waste recycling program.

The measure may slow the rise of high-tech taxes but it does not eliminate this costly burden on the development and adoption of cutting-edge technologies. As electronics manufacturers increasingly incorporate greener and more valuable components into their products, recyclers are developing profitable strategies for turning e-waste into e-treasure. In the case of cell phones, for instance, carriers, retailers, and manufacturers actively compete for discarded devices.

Competition will ultimately drive efficient e-waste recycling across the entire industry, but California’s program includes no provisions for its own elimination. As a result, the state could be forced to sacrifice technology jobs and innovation in order to prop up an obsolete bureaucracy.

Governor Schwarzenegger’s decision to support the waste board’s elimination is an important first step towards reforming the state’s broken government. Slashing waste-board waste in Sacramento, however, requires more than a superficial reorganization. Leaders must plan to phase out burdensome e-waste taxes, because California’s technology leadership should not be disposable.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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