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February 24, 2007

The Ithaca Journal .com

Battle looms over bottle-bill expansion
By Yancey Roy

ALBANY — Gov. Eliot Spitzer's proposal to expand the state's bottle-deposit law to juices, water and other beverages could turn out to be one of his toughest fights this year.

About 50 groups are lined up to lobby for or against it, with opponents claiming the plan amounts to a $200 million tax hike. Not only does the Democratic governor want to change what containers carry the nickel deposit but also who gets the nickel when customers don't return them.

Grocery stores, drug stores, beer makers and beer wholesalers, bar owners and 7-Eleven stores are just some of the groups lining up in opposition. They've successfully blocked previous attempts to expand the so-called “bottle bill.” But with a new governor now fighting for expansion and including it as a key part of his budget, opponents know the political climate is different — and they know where they have to go for help.

“There will be an all out push in the Senate as well as Assembly,” said Jim Rogers, president of the Food Industry Alliance of New York, a lobby group for grocers. “We understand what the political realities are, but we feel we are making inroads.”

On the other side are environmental groups who see their best chance to expand the bottle bill since it was enacted in 1982. They are joined a cast of others, such as the New York Farm Bureau and the League of Women Voters, who view the nickel-deposit proposal as an anti-littering measure, as well as some beverage distributors and Tomra, the company that makes the glass, aluminum and plastic recycling machines that dot grocery stores.

They say the momentum is on their side. Besides the governor, the Democrat-led Assembly has historically backed a bottle-bill expansion. Republicans have traditionally blocked it — Senate Majority Leader Joseph Bruno once called it “nonsense.” But their advantage in the Senate has dipped to 33-29 and a number of veteran GOP senators support expansion.

“The politics have definitely changed in favor of changing the law,” said Sierra Club lobbyist John Stouffer.

Currently, the law applies to beer and soda containers. About 66 percent of those were redeemed in 2004, according to the most recent Department of Environmental Conservation statistics. Roughly 3.6 billion out of 5.4 billion nickel-deposit containers were returned.

That rate is an all-time low since the law was passed. The rate of returns has been on a steady decline since 1994, when it was 78 percent. The single-year best was 80 percent in 1984.

Despite the dip, supporters call the bottle bill the most successful recycling measure New York ever enacted. They say the reason bottled water and juices weren't originally included is simple: those products weren't sold in any great volume 25 years ago.

About 3.1 billion non-carbonated containers are sold annually in New York, said Judith Enck, Spitzer's environmental policy director.

Essentially, here's how the system works now: A company, say Coca-Cola, charges a grocery store a nickel for every bottle it stacks on the shelf. The grocery then charges the customer an extra nickel for every Coke purchased. If the customer tosses the bottle in the trash rather than return it to the store, Coke effectively gets the nickel. Estimates of the value of so-called unclaimed deposits range widely, from $100 million annually to nearly $200 million.

Coke also pays the grocery a 2-cents-per-bottle handling fee to cover costs associated with recycling. Typically, the grocery passes this on to Tomra or another recycling company.

Besides expanding coverage, Spitzer proposes two other big changes: bump the handling fee to 3.5 cents per bottle and let the state — rather than Coke — keep the nickel for unreturned bottles. Coca-Cola and other manufacturers would have to make quarterly payments to the state Taxation and Finance Dept. based on sales in New York. Spitzer would direct the money to the Environmental Protection Fund, which allocates money for open-space preservation and some landfill cleanups.

Enck said that opponents are employing many of the same tactics as in 1982: “using lots of Chicken Little arguments and trotting out a shadow bill.”

The latter is a recycling bill introduced last legislative session that would end the 5-cent deposit and replace it with a broad-based tax on most packaging, from cereal to baby food to beer cans. Rather than return bottles to the store, New Yorkers would place them in curbside recycling containers; the packaging tax would go to expand local curbside programs.

Another bill, sponsored by Assemblyman David Gantt, D-Rochester, would prohibit bottled water from being subject to any container-deposit tax.

Recycling machines in stores produce “clean and separated” containers whereas curbside programs can't make that guarantee, Enck said. She said the push for a radically different recycling bill demonstrates where the momentum is going.

“You feel like you're getting close when opponents hire PR firms to come up with misleading alternative bills,” Enck said.

Bruno so far has said the bottle bill has to be considered in the context of the state budget; Lawmakers are supposed to adopt it by April 1.

Lobbyists for Coca-Cola have been circulating fliers around the Capitol headlined: “Reject the Bottle Tax.” Among other things, it claims prices per container will jump 15 cents not just five, to help stores and bottlers pay for added costs. It also makes the argument that New Yorkers “will be forced to contribute their hard-earned money to the state” (as opposed to the bottlers) if they don't redeem their bottles.

Bodegas and convenience stores say they don't have the space to accommodate recycling needs. Further, Rogers, of the Food Industry Alliance, says that grocery stores could lose out because they “over-redeem” — that is, get back more containers than they sell because people bring all their bottles to the grocery rather than where the point of purchase. The increased handling fees won't cover all their costs, he said.

Plus, they don't want the mess.

“We're in the business of handling food,” Rogers said. “We're not recycling centers.”

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