Consumer Watchdog Wants Legislative Investigation Into CA Department of Finance $300 Million Understatement of Bottle Deposit Funds As Means to Stop Spending on Reforms

SACRAMENTO, Calif. , Jan. 26, 2024 /PRNewswire/ -- Consumer Watchdog called upon the Senate and Assembly budget chairs to investigate the Department of Finance's understatement of available funds in CalRecycle's budget as way to free money up to borrow and to stop legislatively authorized spending on bottle bill reform.

"The integrity of the state budget is critical for the functioning of the government," Consumer Watchdog wrote two lawmakers today.  "We write to point out a $300 million understatement in the size of CalRecycle's Beverage Container Recycling Fund (BCRF) reflected in the Governor's budget this month."  

Read the letter.

"The current balance in the BCRF fund is reported in the Governor's Budget as $538 million for fiscal year 2022/23. The fund in that fiscal year contained $830 million, according to financial statements submitted by CalRecycle to the Department of Finance (DOF). That leaves a discrepancy of nearly $300 million.

"This critical mistake has grave implications for CalRecycle by making it appear that it has $300 million less funds to spend on reform of our broken bottle deposit system as prescribed by SB 1013. The misrepresentation is not a mere mistake. There is a pattern of the Department of Finance grossly understating the fund balance so that CalRecyle cannot spend legislative-appropriated funds. That allows DOF to more freely borrow against the fund."

Consumer Watchdog pointed to previous reporting by the San Francisco Chronicle on the issue.

The letter goes on, "This cynical game that permits the DOF's borrowing has gone on for too long, but this year it comes with extreme consequences of the system not being ready for new rules taking effect in 2025." 

Consumer Watchdog's letter points out that previous Governor's budgets allocated more than $146 million in CalRecycle grant money to grocery store chains and recycling centers to install consumer-friendly automated deposit refund technology in advance of a major redesign of the system under SB 1013.  The understatement of available funds makes it look like there is less money to dispense in grants. CalRecycle has committed to just $40 million in grants and could be discouraged from granting the remaining $106 million appropriated by the legislature due to the misstatement.

"We urge you to verify what monies are in fact available to spend to provide consumers with convenient redemption options beginning on January 1 next year and to untie CalRecycle's hands so that it can award $146 million in grants and fulfill its other obligations under SB 1013," the letter concludes.

SOURCE Consumer Watchdog