August 21, 2019
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Bottle bill handling fee increase is not a tax, and it is good for Maine

George Danby | BDN
George Danby | BDN

Governor Janet Mills recently allowed an increase in the handling fee associated with Maine’s bottle bill to become law. This is a good thing for most participants in container recycling, and Mainers in general.

Beverage manufacturers sell many of their products to consumers who want “on-the-go” convenience, which results in packaging that is detrimental to our environment if not properly recycled. In 1976, the Maine Bottle Bill was enacted to require the manufacturers to keep this packaging out of the waste stream by collecting and recycling it. The corresponding deposit program provides an incentive to consumers to also play a role in this system. Consumers incur only the cost of bringing their containers to a redemption spot, where the deposit is then returned.

In recent years, the beverage manufacturers have made sustainability promises about using recycled material in their packaging. They also say there isn’t enough recycled material available, so more people need to recycle. States without bottle bills have container recycling rates around 30 percent, and much of that material cannot be reused as food grade because it is contaminated in the recycling process. Maine’s rate is roughly 80 percent and largely uncontaminated – one of the highest in the country. Mainers can take pride in that fact, thanks to a thorough Bottle Bill with cooperative participants.

Because it isn’t logistically feasible for the beverage manufacturers to collect containers and return deposits themselves, an industry was created to assist in meeting this requirement by handling containers, returning deposits, and ensuring those containers get recycled for the highest reuse. Manufacturers pay for this service — a service that helps them meet their own recycling goals — with a handling fee.

In 1976, the original Maine handling fee was 1 cent. Using the national Annual Consumer Price Index since 1976, and an adjustment that considers that the $11 Maine hourly minimum wage is 52 percent higher than the Federal minimum wage and affects more than 60 percent of a redemption center’s costs, the equivalent fee today would more than 6.2 cents. The emergency measure passed by the legislature, moved it to 4.5 cents as of January 2020 — a necessary adjustment, though more than 27 percent below the inflation-adjusted equivalent.

The redemption industry is prohibited from raising prices on its own, so as its costs go up, it must rely on the lawmakers for relief. Without those adjustments the redemption industry subsidizes the recycling efforts of the manufacturers (a perversion of the intent of the bottle bill) and ultimately will suffocate under its own costs, leaving only large grocery stores as redemption spots. This would affect the convenience of bottle redemption, which would lead to less participation and would erode Maine’s laudable redemption rate. States with bottle bills that have gotten sideways, because of inflation or other issues, stall out with redemption rates below 60 percent.

This fee increase here in Maine is not a “handling tax” to consumers, as was stated in a May 7 OpEd from the Maine Beverage Association’s executive director. If the handling fee were charged directly to consumers on every eligible beverage sold, regardless of whether it was ultimately recycled, it might be considered a tax. But it is not. It is a fee charged to manufacturers, upon recycling, for providing that service.

The law does not mandate any fee to consumers. Consumers pay the 5 cent or 15 cent deposit, returned in full upon redemption. The beverage manufacturers may choose to pass some or all of the fee increase to their customer – but that is not a tax, that is a price increase.

We all take great pride in keeping Maine beautiful, and should celebrate our leadership position in creating a zero-waste system that can be a model for the rest of the country. The passage of LD 248 is a step toward making sure the momentum of a circular economy continues to grow.

Alison Vanderhoof is the CEO of Clynk, a technology-based recycling company. Headquartered in Maine, the company currently operates in Hannaford Supermarkets in Maine and New York, and has licensed technology in Oregon, Iowa and New Brunswick, Canada.

 



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