Recently, The Garden Island featured a guest editorial by Lowell Kalapa of the Tax Foundation of Hawaii. Mr. Kalapa is correct in his characterization of the “bottle bill” as a tax. However, his assertion that it is just a feel
Recently, The Garden Island featured a guest editorial by Lowell Kalapa of the Tax Foundation of Hawaii. Mr. Kalapa is correct in his characterization of the “bottle bill” as a tax. However, his assertion that it is just a feel good environmental measure is a sorely uninformed viewpoint that is usually espoused by the opponents of the program, mainly beverage manufacturers, distributors and retailers.
Yes, the bottle bill is a tax. It is a tax to equally distribute the responsibility of disposing over 800,000,000 beverage containers a year in Hawaii between distributors, retailers and consumers. The 1 to 1 1/2 cent handling fee paid by distributors, will be used to pay recyclers for getting the empty containers to recycling markets and to the Department of Health to run the program. Consumers who recycle containers can get their nickel back, people who do not recycle will lose their nickel and people who collect discarded containers are rewarded a nickel. Only people who do not recycle and litter are taxed.
Mr. Kalapa’s arguments about retail stores being forced to take back dirty, sticky containers, driving the cost of beverages higher and the need to hire additional employees are equally specious. First of all, retail stores are not required to become redemption centers. Secondly, the experience of the other nine states that have bottle bills show no difference in pricing nor a drop in sales when compared to non-bottle bill states, just a significant increase in recycling rates.
At the end of 2001 Legislative session, I gave a challenge to the beverage industry to devise a workable, cost-effective program that could be implemented statewide to achieve the same objectives as the bottle bill. The industry returned in January 2002 to propose curbside recycling funded by increasing fees for garbage collection and tipping charges, and implementing a “pay as you throw” system for rural areas that do not have residential curbside trash service and where residents must take their garbage to a transfer station.
I found it disingenuous for the beverage industry to argue that the bottle bill is a just another tax when its own proposal increased fees and taxes. Furthermore, the industry’s proposal did not address litter, did not have statewide application, and would probably result in more illegal dumping with the pay as you throw approach when people need to go to the dump. And, the industry proposal did not address the trend of beverages consumed away from the home that, more than likely, would not end up in a residential curbside collection bin.
The beverage industry has the option of making 1-cent less profit on a beverage by absorbing the handling fee. However, they have framed the bottle bill as a “tax” by passing off the handling fee to the retailer and consumer. But more importantly, whether we have a bottle bill or not we must still pay for the disposal of beverage containers. Either Hawaii beverage consumers will pay the handling fee or through increased garbage collection fees and property taxes or other mechanisms that fund our solid waste programs. Plus we will also pay for the increasing need for new landfill space.
What the bottle bill attempts to address is the disturbing trends in the beverage industry. We are seeing an evolution of drink packaging from glass bottles to cans and now to plastic. We are experiencing a growing market for individual size, to be consumed-on-the-go beverages from soft drinks, ice teas, water, sports drinks and juices as well as beer and other mixed alcohol drinks.
According to a September, 1996 Beverage World article, bottlers and retailers reap larger profits through changes made in packaging. This change has aggravated into a solid waste nightmare. Still, the industry refuses to take responsibility for its choice of containers that have little or no recycled material content and are very difficult to dispose of.
The article begins, “Let’s talk about money! If you know a bottler in this country who isn’t making record profits right now, then something is dramatically wrong with his operation. Volume with profit is the current norm. . . something’s going on to raise profitability, and the answer is packaging.”
The article continues, “We must give significant credit to packaging for re-profitizing the entire industry.” The packaging discussed is the move from the larger aluminum can to a 20-ounce, no return plastic bottle and a one-liter plastic bottle. The article reveals that one must sell 26 cases of cans for every single case of 20-ounce, no return to make the same dollar profit.
This article exposes a root cause of Hawai‘i’s growing solid waste problem and why many other areas of the country are cutting back curbside recycling programs. From 1994 to 1999 the number of plastic beverage bottles sold in the United States increased by 79 per cent, from 23 billion to 41 billion. The number of aluminum beverage cans sold nationally decreased during that same period. With the exponential sales of single size beverage and the increased use of plastic, these containers end up in our landfills. High value aluminum cans that once subsidized recycling programs are being taken over by low or no value plastic containers.
I appreciated Dave Campbell’s Guest Viewpoint article about Kaua‘i’s landfill problems. We need long-term solutions to our solid waste problems and we need leaders that are willing to make difficult decisions that can benefit the entire island. No one wants a landfill in their community but it is a decision cannot be avoided. Although the bottle bill addresses only a small portion of our waste it has proven to be an effective way to divert waste from and extend the life of landfills and to get people to actively participate in recycling.
“These two packages, which in the composite controlled a combined 9.8 share in 1994, currently account for 13.7 percent of store volume, with continued growth foreseen. With a profit per case for the bottler of $5.34 on 20-ounce NR and $4.15 on 1-liter, the share growth is warmly welcome. Your customer welcomes the growth too since retailers’ average profits per case are $8.86 and $4.98 respectively. These two high-profit packages are charting a 35-percent annual growth rate. If you look at your internal numbers and see you aren’t realizing a combined increase of some 25 to 40 percent over last year, then you are off track and probably performing at below national standards,” page 83, Kent Phillips, Beverage World, September 1996.
