States may lose urgency of bag taxes, bans

WASHINGTON (Jan. 11, 11:10 a.m. ET) -- Expect local communities to again be at the forefront of initiatives to ban or tax plastic bags and ban polystyrene takeout packaging.

The reason? The budget crunch in many states will cast a large shadow over the state legislative environment in 2010, reducing the time available to examine other issues and changing the way states look at potential legislation. Additionally, a number of states will have shorter legislative sessions because of elections.

“One of the things that will characterize 2010 is the acute realization of how legislation will impact the economy and jobs,” said Steve Russell, vice president of plastics for the American Chemistry Council in Arlington, Va. “We need to be prepared to articulate the value of our industry to society and to jobs.

Russell

“At the end of the day, lawmakers have to understand that they need to pass policy that is good for their constituents and we need to let them know who we employ and the value of the products we make,” Russell said.

While the budget crunch and worries over how legislation could impact jobs may diminish the possibility of statewide packaging bans being enacted, it also means that a variety of taxes aimed at the business community could surface as states try to fix their financial woes.

“States essentially are broke. All of them are staggering with deficits and looking at ways to cut spending and raise taxes because they have to get their fiscal houses in order,” said Jane Adams, senior director of state and government affairs for the Society of the Plastics Industry Inc. in Washington.

Adams speculates that states may come up with “various taxing schemes,” such as raising unemployment insurance taxes or placing taxes on products or services. “We are in a very difficult time where states don’t have a lot of money, but need a lot of money and have to find money to pay for their programs.”

Bottle bills resurge

That also likely means more proposals to enact or expand bottle deposits. New York and Connecticut increased their revenues by expanding existing deposit programs in 2009 to include water bottles and sports drinks.

Already, Massachusetts has introduced a bill to expand its 24-year-old deposit program to include water, sports drinks and fruit drinks. Tennessee, Oklahoma and Iowa also are expected to introduce bottle bills, along with most of the dozen states that unsuccessfully attempted to enact bottle bills in 2009.

“Massachusetts has a really active campaign right now,” said Susan Collins, executive director of the Container Recycling Institute in Culver City, Calif. “But I think in the coming year, the most interesting container-deposit situation will be in California.”

California in crisis

California’s bottle-bill program is in a shambles because the state Beverage Container Recycling Fund has loaned more than $500 million to the state general fund since 2002 and no longer has the money to fulfill its legislated obligation to recycling centers. It stopped paying handling fees to recycling centers Oct. 20 and has reduced by 32 percent the amount it pays recycling centers in processing fees.

That has triggered 200 of the 1,200 bottle recycling centers in the state to close. One recycling center owner, Tomra Pacific Inc., has filed a lawsuit to force the state to repay the loans to the fund. One-third of the bottles collected in California are collected through recycling centers; the rest at curbside.

A hearing on the lawsuit will be held in Alameda Superior Court on Jan. 19 — nine days after Gov. Arnold Schwarzenegger submits his budget proposal for the state, which will include his strategy for returning the fund to solvency.

“There are a number of solutions,” Collins said. “We just need the governor and Legislature to get together to decide which solution they both like and implement it to end this horrible stalemate.”

However, the specter of fixing the bottle bill in California and pressing budget issues in many state legislatures does not mean proposed plastic bag taxes and bans and efforts to ban polystyrene takeout packaging will go away at the state level.

Rather, “the opportunities to advance legislation or fend off onerous issues” will shrink at the state level, said Roger Bernstein, vice president of state affairs and grass-roots efforts at ACC.

But Bernstein cautions that there also could be “a certain amount of urgency to get things done,” because of the expectation that the 2010 elections will turn many of the current liberally oriented state legislatures more conservative in 2011.

“Those advancing an environmental agenda” will push forward because “their arguments might have more traction” with current legislators, he said.

That urgency is underscored by a letter sent to its stakeholders by Californians Against Waste.

“Both the urgency and opportunity for advancing our Waste Reduction and Recycling Agenda” has never been greater, wrote Mark Murray, executive director. CAW’s priorities include a 25-cent tax on bags and a ban on PS takeout packaging ban.

“Our top priority when the Legislature returns in January is to press the governor and legislative leaders to move immediately to enact a solution that protects the state’s bottle bill and puts the program on a path of sustainability,” Murray wrote.

California has been the only state to strongly pursue statewide restrictions on plastic bags and PS takeout packaging bans.

But industry officials still believe action on such proposals is unlikely in California.

“The economy and the state’s interest in addressing issues related to budget problems, unemployment and job creation will be overreaching issues,” said Tim Shestek, ACC’s director of state, government and grass-roots affairs in California.

Bans can lead to a loss of manufacturing jobs and fees would impact consumers already reeling because of the economy and unemployment, Shestek said. “I can’t believe that is a policy that a majority of the legislators statewide would want to make.”

Shestek has heard rumblings that California state lawmakers might try to impose a ban on plastic bags, but he does not think that can happen.

Adams agreed. “There may be some carryover on these issues, but there are more pressing priorities at the state level. They need to take care of education, roads and the budget.”

But at the same time, Shestek said that he thinks “we will continue to see efforts at the local level, mostly on the coast” to ban bags and PS products. In California, 28 cities and two counties already have PS takeout packaging bans, and one California city and four California counties have PS bans at citywide facilities and events.

In addition, Monterey County and Fremont, Calif., already have put in place plans to implement PS bans in 2010.

Brownsville, Texas, approved a plastic bag ban Jan. 5 that becomes mandatory Jan. 1, 2011. It’s the first plastic bag ban in Texas and the 12th plastic bag ban in the U.S., six of which were enacted in 2009. In addition, a 5-cent tax on plastic and paper carryout bags went into effect in the District of Columbia on Jan. 1.

Other U.S. communities are also weighing proposals to ban plastic bags.

Berkeley, Calif., is expected to introduce a proposal this spring to ban plastic bags, and the Florida Department of Environmental Regulation — which last October issued a draft report recommending a tax on plastic bags — is expected to issue its final recommendations, which may or may not include a bag tax, by Feb. 1.

In addition, both Virginia and Maryland have introduced bills that would place a 5-cent tax on plastic bags.

But, those initiatives notwithstanding, the industry is encouraged by how Seattle voters rejected in August a 20-cent tax on plastic bags the city had wanted to implement. It believes the results of that election will help sway legislators elsewhere not to ban or tax plastic bags.

Still the battle won’t be easy.

“It becomes a difficult challenge at the local level where the atmosphere is emotional and volatile and there is a fair amount of symbolism going on,” said ACC’s Bernstein. “The challenges may be increasing at the local level.

“The problem we have is how do we convey the underappreciated benefits of plastics and plastic bags and how do you identify their reuse at home? We don’t know how to quantify that.”

Advocates of plastic bag bans largely underappreciate the ways in which consumers reuse the bags, Bernstein said.

The bag issue also is complicated by the fact that sometimes retailers “may go sideways in the debate and you lose a critical ally,” he said.

“If they are in the fight at the local level, you have a formidable ally,” he said. But when they are not, the balance shifts.

In addition, some retailers such as Ikea and Whole Foods Market no longer distribute single-use plastic bags. CVS/pharmacy and Target have customer incentive programs designed to reduce plastic bag use. Three Wal-Mart stores in California will launch a pilot program in January in which no single-use plastic bags will be available for shoppers.

But the heightened discussion surrounding plastic bags also creates opportunity for the plastics industry to discuss the issues with its stakeholders, Russell said.

“One of the consequences of having an active state and local climate is that there are dramatically more opportunities to educate lawmakers on the sustainability of plastics and how plastics can reduce greenhouse gas emissions, divert material from landfills through recycling and help in reducing energy use,” Russell said.

“It gives us the opportunity to open a constructive dialogue,” he said. “But when we are meeting with legislators, we need to show up to tell them who we are, what we are doing, the partnerships we have set up for recycling and the benefits we are providing in different markets.”

He said ACC’s Plastics Make It Possible campaign can help the industry when it speaks to lawmakers and consumers about “how plastics enriches communities with products and jobs” and through efforts to reduce litter.

“We feel passionate about providing solutions,” Russell said. “When we say no to legislation, we are very active in working with others in coming up with solutions.”

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