The Maine Legislature is considering a bill — LD 248 — that would raise taxes on Maine beverage consumers by $10 million every year. This is a significant departure from Gov. Janet Mills’ stated objective not to raise taxes in her first budget.
Maine beverage consumers already pay $36.5 million annually in handling taxes. By law, that tax is added to the cost of making and selling every beer, wine, liquor, soda, juice and water bottle in Maine. The money is paid to redemption centers for beverage containers collected through the bottle bill.
Maine has the unfortunate distinction of being tied with Vermont for the highest handling tax — 3½ to 4 cents — of the states that have a bottle bill. Connecticut’s tax is 2 cents (1.5 cents for beer). Massachusetts’ is 3¼ cents, and the redemption center has the obligation to bring containers back to the local distributor.
There are approximately 370 redemption centers operating in Maine. (The number licensed by the Department of Environmental Protection is even higher than that). This is a massive number — way out of proportion for our population. By comparison, Vermont has 80 redemption centers; Massachusetts has only 50. The number of redemption centers in Maine has shot up after each tax increase, and would likely do so again.
If redemption centers are struggling, it’s not because the minimum wage is too high and it’s not because the handling tax is too low; it’s because Maine has too many redemption centers. There are 12 in Lewiston/Auburn, seven in Bangor, four in Livermore and Livermore Falls, four in Lisbon and Lisbon Falls, and four in Presque Isle. Maine beverage consumers are paying for every bit of that inefficient infrastructure.
That’s why many redemption centers offer, and even advertise, a 1-cent kickback — the customer gets 6 cents per container, instead of the 5 cents required by law. Why would they give that money away? Because there aren’t enough beverage containers sold in Maine to support 370 redemption centers. They’re all fighting one other for volume.
The worst thing about this bill: It won’t improve recycling in Maine one bit.
A $10 million increase in handling taxes is only going to prop up the same old, inflated system that we have been using for 40 years — bottles individually counted and sorted by hand at tremendous expense, just as in 1978 when the bottle bill was passed.
The reach and technology of recycling have changed dramatically since then. Nearly everyone in Maine has access to recycling through programs that accept household products made of many different materials. Unlike the mixed paper and glass that has diminishing recyclable value, our containers are made from PET plastic and aluminum, material that continues to have some of the highest recyclable value. Every single beverage container we sell can be recycled through a municipal system at a fraction of the cost of running it through the bottle bill.
And yet, at many redemption centers the process of collecting beverage containers hasn’t changed — at all — in 40 years.
The last two times the handling tax was increased, local beverage distributors did not oppose the final proposal. In both instances, the legislation included a number of additional provisions aimed at reducing bottle bill fraud and reducing costs in the overall system.
We suspect that most Maine families, who ultimately bear the cost of both the handling tax and their local recycling program, would like to see this same thoughtful approach — one that improves recycling and reduces costs.
But LD 248 does none of that. All it does is throw more of your money at an inflated, old system that is in desperate need of reform.
Newell Augur is executive director of the Maine Beverage Association.