State's bottle redemption fund tapping out

SAN JOSE, Calif. (KGO) -- California is facing a new fiscal crisis. The recycled bottle redemption fund is running out of money, despite the nickel collected on every container bought.

The financial fallout in San Jose may claim an adult school and a recycling program as casualties.

So many people are recycling today that the nickel-per-container redemption fund is losing $100 million a year. Consumers are recycling 85 percent of their containers, while the fund is set up to break even at 75 percent.

The state auditor is recommending the legislature find a way to generate more revenue. One possibility could be raising the 5-cent per bottle deposit.

Joe Henchcliffe said he was surprised the deposits collected and the redemptions paid don't match.

"You have to wonder where the bottles and cans are coming from then," he said. "If you're charging and you're selling that much, then the redemption should be the same."

The state auditor found that people are redeeming cans and bottles from out of state. The estimated loss is just over $33 million a year.

To balance the fund, cuts might be made to programs also supported by the nickel deposits. The San Jose Conservation Corps and Charter School is one of them. It gets $1 million a year from the fund.

"We don't just receive that money, we work with that money so we provide recycling services to small and medium sized businesses, schools, nonprofits, government offices, as well as do a lot of community education about recycling," Dorsey Moore, San Jose Conservation Corps spokesman said.

Five hundred young adults are part of the Conservation Corps and school program, which helps them to earn credits toward high school graduation.

"We help folks that are outside of the educational safety net finish out their high school diploma credits, pass the California High School Exit Exam, and be able to sort of transition whether it be to community colleges or other career educational programs," Moore said.

There's no word yet how soon the legislature is going to tackle the bottle fund deficit.