Bottle Bills Back on Legislative Agendas

Bottle Bills Back on Legislative Agendas
June 1, 2005

Diane Bast

Diane Carol Bast is The Heartland Institute's executive editor and finance manager. As executive... (read full bio)

Lawmakers in Illinois, Tennessee, and West Virginia are taking up beverage container deposit laws aimed, proponents say, at addressing roadside litter and keeping recyclable materials out of landfills.

Opponents warn the bills, widely debated and ultimately rejected by state legislatures during the 1990s, are regressive tax increases that burden consumers, local economies, curbside recyclers, and retailers. Efforts to repeal existing deposit laws are underway in Hawaii and Massachusetts.

States with Bottle Bills
California
Connecticut
Delaware
Hawaii
Iowa
Maine
Massachusetts
Michigan
New York
Oregon
Vermont

Only 11 states currently have bottle deposit laws, the first adopted by Oregon in 1981. The most recent went into effect in Hawaii in January 2005.

I-CAN in Illinois

The Illinois proposal, launched at an April 24 news conference by Lt. Gov. Pat Quinn (D), would charge a deposit of 5 cents for every bottle or can made of aluminum, glass, plastic, or steel. Milk jugs would be exempt.

Consumers would pay the 5 cents to their retailers, who would pass the money along to their distributors. Distributors, then, would pay the 5 cents plus an additional 2 cents handling fee to a state fund administered by the Illinois Environmental Protection Agency.

The state would reimburse retailers and recycling centers 7 cents, of which 5 cents would be refunded to consumers who return their containers. As payment for administering the collection process, retailers and recyclers would keep the extra 2 cents--essentially a fee paid to them by distributors, but passed through the state EPA. The state will keep any unclaimed deposits.

On April 28, the Rockford Register Star editorialized against the proposal, noting, “If you like Quinn’s plan, you also have to like paying more for your drinks at the checkout; lugging cans and bottles back to the grocery store, rain or shine; and risking the success of your community's recycling program.”

“Bottle bills are inconvenient for consumers, a logistical nightmare for our retail partners, and a significant cost burden to bottlers,” noted Preston Read, vice president of environmental affairs for the American Beverage Association. “Consumers overwhelmingly prefer the convenience of comprehensive curbside recycling programs, which are also far less costly to operate than forced deposit programs.”

As of this writing, Quinn’s proposal had not been introduced in the state legislature.

“This proposal is simply a revenue measure,” noted Michael Van Winkle, policy analyst for the Illinois Policy Institute. “Springfield continues to look for new and creative ways to support its spending addiction.”

Tennessee, West Virginia Bills Corked

The Tennessee bill is similar, requiring a deposit of 5 cents from consumers and charging distributors a handling fee of as much as 5 cents. The bill exempts milk and other dairy products and dietary supplements.

In most states with bottle bills, cosponsor State Rep. Russell Johnson (R-Loudon) said, 30 percent of all containers are not redeemed--meaning his measure would generate some $58 million in extra tax revenues every year. He proposes $5 million be spent on anti-litter measures, while $23 million would fund pre-kindergarten programs and the rest would be returned to distributors.

“While lawmakers claim a deposit tax on beverage containers would result in less litter, I suspect most of them are concerned more with greenbacks than green grass,” said Drew Johnson, president of the Tennessee Center for Policy Research. “A deposit law is nothing more than a regressive tax that stands to create as much as $60 million in new taxes on Tennesseans from unredeemed bottles and cans.”

Johnson noted, “Tennessee currently has a sound litter law on the books with a fine of $200 and a minimum of 14 hours of litter removal duty for a first-time offense. If government officials want to curb litter, they should focus on enforcing the current law rather than taking the alarming step of coercing polite behavior through taxation.”

Johnson also explained the proposed deposit tax could mean higher property taxes. “The selling of collected aluminum cans--the most valuable recyclable--offsets much of the expense of curbside recycling programs. Under a container deposit law, curbside programs would collect much less aluminum, leaving a funding shortfall. Since property taxes subsidize most of Tennessee’s curbside recycling programs, property taxes would necessarily increase to offset the lost revenue.”

As of this writing, the measure, introduced in February by Johnson and Sen. Randy McNally (R-Oak Ridge), had not made it out of the committees to which had been assigned.

Similarly, the West Virginia Beverage Container Recycling and Litter Control Act was introduced in February but died in committee when the legislature closed its regular session on April 9.

Repeal Possible in Hawaii

In Hawaii, a deposit of 5 cents charged to consumers was added in January to a bill passed in 2001. The original measure included only a non-refundable tax on distributors. The $8 million collected by that tax was used to fund a collection program administered by a new state government agency established by the bill.

Proponents of the deposit law expected consumers to recycle some 70 percent of their containers. To date, reports Malia Zimmerman in the April 4 issue of Hawaii Reporter, collections are at just 30 percent.

The measure requires consumers to wash their cans and bottles, and cans cannot be crushed. At present, the containers cannot be redeemed at the retailers from which they were purchased, but only at certified redemption centers. A bill pending in the state legislature would offer grants of up to $125,000 or tax credits of $50,000 to retailers who establish certified redemption centers. The state Department of Health, which says it already has statutory authority to offer redemption center grants, opposes the tax credit measure.

Calling the bottle bill a tax rather than an environmental bill, State Sen. Sam Slom (R-Hawaii Kai) has introduced legislation to repeal it.

“The Hawaii bottle bill is all about money and power and nothing about fewer beverage containers on the street or less waste,” said Richard Rowland, president of the Grassroot Institute of Hawaii. “It is a tax increase and denigrates individual initiative.”

Rowland recommended that legislators in Illinois, Tennessee, and elsewhere “look for ways to empower individual initiative and reward it. Look for ways to avoid heavy-handed regulations. In other words, create incentives for businesses and individuals to do what needs to be done.

“And remember,” Rowland said, “used bottles and cans attract varmints and should not be stored overlong.”

Repeal--or Expand--in Massachusetts

A repeal effort, launched by Sen. Colleen Garry (D-Dracut), is also underway in Massachusetts, whose deposit law was enacted in 1982.

Some of Garry’s colleagues, by contrast, are seeking to expand the law by adding single-serving non-carbonated and alcoholic beverages, including waters, sports drinks, and liquor. Proponents say doing so would raise an extra $16 million in unclaimed deposits for the state.

“An expanded Massachusetts deposit law would cost $50 million per year to operate (doubling the cost of the current law), but would increase the Commonwealth’s recycling rate by about 0.12 percent--one-eighth of 1 percent,” noted the American Beverage Association’s Read.

“With expansion of the bottle bill comes dramatically increased opportunities for fraud--redemption of containers in Massachusetts that were purchased outside the state,” said Read. “Because of fraud, proponents’ predictions about new unclaimed deposit revenues are unrealistic. In fact, expansion would likely eat into the unclaimed deposits currently received by the state.”


Diane Carol Bast (dbast@heartland.org) is executive editor of Environment & Climate News.

Diane Bast

Diane Carol Bast is The Heartland Institute's executive editor and finance manager. As executive... (read full bio)