A great deal has changed since Congress last seriously debated the need for interstate waste shipment and flow control legislation. Nationally, the closure of Fresh Kills Landfill in New York and the prospect of 13,000 tons per day, or almost 5 million tons per year, of additional waste leaving the city has generated renewed interest and concern. To put this in perspective, New Jersey exports about 2 million tons per year. Recent data from 1997 and 1998 show that we are no longer exclusively an exporter of solid waste. Today we are receiving waste for disposal from New York, Connecticut and Massachusetts. With the phased closure of Fresh Kills, exports to New Jersey for disposal and transport through our State to disposal locations to our south and west will increase. Significantly. also since the Carbone and the more recent Atlantic Coast decisions, New Jersey has worked with our counties to reconstruct the State's solid waste management system. As a result, 15 of our 21 counties are now operating in a free market environment. However, the State and counties are still faced with about $1.2 billion of outstanding solid waste debt, the result of New Jersey's 20 year program to achieve self-sufficiency and to handle our own waste in an environmentally sound manner. Under our state plan, 31 state-of-the-art solid waste management facilities were constructed. New Jersey's waste flow control rules had specifically been upheld by the Federal district court as a valid exercise of State power in 1988. The recent Carbone and Atlantic Coast decisions changed our course in midstream.
As we move into this state-wide free market, tipping fees are substantially lower, but inadequate funds, or in some cases no funds, are being collected at our disposal facilities to pay down the $1.2 billion debt. To date, two counties have entered technical default and the State has provided nearly $41 million to address stranded investments in five counties.
The bond rating situation is also of significant concern. Rating agencies have lowered the rates on almost all solid waste debt to below investment grade. Moody's Investors has downgraded the individual revenue bond rating for five counties to varying levels of junk bond status. Standard & Poors has either downgraded or announced a risk of being downgraded for seven additional counties.
During the past year and a half, the State has been very aggressive in moving to a state-wide free market system. We have pledged over $200 million in debt relief through the combination of a public question approved by New Jersey voters last year and general fund appropriations. We have adopted emergency rules to streamline out regulatory process. Our State treasurer has been conducting operational audits of 13 of the 21 county systems to ensure that tipping fees are as competitive as possible.
New Jersey has also entered a number of interstate agreements with Pennsylvania, where we export most of our waste, which pave the way for a coordinated approach to future solid waste management. In addition, we are working with Governors' offices from 7 States across the region--Ohio, Michigan, Indiana, Pennsylvania, Virginia, and New York in a good faith effort to find common ground on the difficult issues of waste disposal.
Despite these efforts, many of our counties still require long term financial assistance. To add even more uncertainty, nearly challenges remain lined-up in the courts to test the validity of county and state actions taken since deregulation began.
New Jersey continues to believe in the philosophy that States should be responsible for managing their own waste. We support legislation to provide reasonable limits on out-of-state waste if it is combined with limited flow control authority. We recognize that our old system of flow control is gone, and we therefore seek only limited flow control authority as a transition tool to be used by a small number of New Jersey's 21 counties to pay off outstanding debt. The flow control authority would only be allowed for the life of the bonds.
Toward this end, New Jersey supports S. 872 sponsored by Senators Voinovich and Bayh. S. 872 would not establish an outright ban on out-of-state waste shipments but would give States and localities the tools they need to better manage their in-state waste disposal needs. Further, S. 872 contains the limited flow control authority necessary for counties and the State of New Jersey to rationally move to a free market, to pay off outstanding debt, and to meet the interstate waste limitations authorized in the bill. We also support S. 663 sponsored by Senator Specter for these reasons.
Conversely, New Jersey cannot, at this time, support S. 533. It is critical for New Jersey that any Federal interstate waste shipment legislation to be balanced with at least a limited flow control provision.
Federal legislation that both limits interstate waste shipments and provides limited flow control authority provides the tools and flexibility needed by the States and localities to rationally manage solid waste.
I sincerely thank you for your kind attention and would be happy to entertain any questions you may have.