UPDATE: A bill to give Honolulu recyclers an annual subsidy of up to $600,000 a year is becoming a law, despite a veto from city Mayor Kirk Caldwell. Honolulu City Council voted 7-2 to override Caldwell's veto and pass the bill, according to KHON2.

Caldwell's communications director, Jesse Broder Van Dyke, issued a statement in response to the decision, which included the following: "There have been no subsidies in place since 2013 and automotive recycling continues to thrive on Oahu, which demonstrates that the subsidy is an unnecessary corporate giveaway ... The mayor's request to compromise was sincere and it is unfortunate that it was ignored, especially for Honolulu taxpayers who will be forced to give away over half a million dollars to profitable Schnitzer Steel every year in perpetuity."

"The effective date is Jan. 1, 2017, so there's lots of time to have made amendments," said Councilmember Ann Kobayashi, as reported in KHON2.

Dive Brief:

• Honolulu, HI Mayor Kirk Caldwell vetoed a bill that would have provided recyclers an annual subsidy of $600,000 — $530,000 of which would have benefited Oregon-based Schnitzer Steel Industries, owners of a scrap metal recycling site in Oahu and another one in Maui. If Bill 50, which seven of eight council members voted for, had passed, recipients of the funding would have received a 25% discount on disposal fees at the landfill and at waste-to-energy facility H-POWER.
• Caldwell’s argument for vetoing the bill is that large corporations such as Schnitzer, which generated $1.9 billion in revenue last year, do not need government subsidies.
• The $600,000 figure was calculated based on current costs to recycle, though Councilman Ernie Martin said the actual value may come in less.

Dive Insight:

"The city's taxpayers should not be subsidizing large corporations that don't need a subsidy, such as this one," Caldwell wrote in a letter to council members, as reported in Honolulu Civil Beat.

Some in the industry, like the majority of Hawaii’s council, do not think the vote is necessarily for or against one corporation, but is more about whether to support the recycling industry at large, hit hard by low commodity values, nationwide.

Jennifer Hudson from Schnitzer Steel said that the monetary boost would help the company through hard times. Constituents from several recycling companies backed the bill too, including Paul Perry from Leeward Auto Recycling who said the legislation would have been the company’s only chance to keeping its doors open.

After hearing out Perry and some of the others who would be impacted, Councilmember Ann Kobayashi changed her position over the issue in order to support smaller companies.

She and Martin said the mayor's decision against corporate recyclers was hypocritical considering that the city pays Covanta Honolulu millions to operate H-POWER each year — having raised payments to the company from $313.7 million to $993.3 million as of fiscal year 2013.

The mayor’s spokesperson later countered that taxpayers profit monetarily from H-POWER.

In 2014 Honolulu eliminated a glass recycling subsidy. And around the same time, Hawaii's largest recycler, Reynold's Recycling, cut services over a payment dispute with the state.