January 24, 2008
State wants to double can and bottle deposits
By WES KAPPELMAN
As proposed by Gov. Chet Culver, consumers at redemption would receive 8 cents while the state would keep 1 cent for REAP.
Gov. Chet Culver’s planned revision to Iowa’s 30-year bottle bill would help redemption centers and raise funds for the state, but Iowa grocers and distributors warn the costs will be passed to consumers.
Iowa’s current bottle deposit is at 5 cents. Culver’s plan would: increase the deposit to 10 cents; increase the handling fee paid to redemption centers or retailers from 1 cent to 2 cents; add a 1 cent tax for the Iowa Resource Enhancement and Protection program; increase the types of bottles that have deposits and have the state collect unclaimed deposits.
Culver’s Communications Director Brad Anderson said an increase in the deposit would provide a bigger incentive for people to return bottles.
“The governor’s goal is to have no unclaimed property,” Anderson said.
Expanding the bottle bill to include water bottles, teas and juice drinks is also part of the governor’s proposal. Anderson said an extra 330 million bottles per year could have deposits, which would keep them out of ditches and landfills.
These changes, especially doubling the handling fee and adding more bottles, would benefit redemption centers.
“Rural redemption centers are struggling tremendously to survive,” Anderson said.
Culver’s proposal is being drafted and hasn’t been presented to the state legislature in bill form.
“There is no time line currently for that,” Anderson said. “We hope to have something in the near future.”
According to an overview of Culver’s fiscal year 2009 budget, the bottle bill will bring $21.5 million to the REAP program. The bill would also bring $13.2 million from uncollected deposits back to the state. Currently, the distributors keep the uncollected deposits.
Also according to the report, there were 1.9 billion containers sold last year with 1.7 billion containers redeemed.
Indian Can Kountry owner Tom Pitts said Iowa redemption centers have been trying to get another penny for 10 years.
“We’ve got to have another penny a can,” Pitts said.
With increases of the minimum wage and other costs, Pitts said it has been hard to break even.
“I hope that something happens this year,” Pitts said. “Even half a cent is better than nothing.
Pitts said he has been picking up accounts from outside Oskaloosa to keep his business going. He said the governor’s plan to expand the deposit to more bottles would help.
Pitts said his business receives between 8 and 9 million containers. With a 10 cent deposit, people would also redeem more often.
A problem with increasing the deposit to 10 cents is redemption centers would need to have more money up front to return to customers.
“You’re paying out double the amount,” Pitts said.
Jerry Fleagle, Iowa Grocery Industry Association President, is against increasing the deposit to 10 cents, especially if only 8 cents is returned. He said the original bottle bill was meant for litter prevention and not meant to be a funding source for the state.
He said people from neighboring states will bring in cans to take advantage of a higher Iowa bottle deposit.
Increasing the handling fee to 2 cents, along with the addition of a 1-cent tax for REAP also worried Fleagle.
“The cost is going to ultimately be passed to the consumer,” Fleagle said.
Fleagle said grocers don’t like the bottle bill because it makes it harder to maintain a clean store. Fleagle advocates replacing the bottle bill with curbside recycling.
“You really have to be an efficient redemption center to make it work,” Fleagle said.
He said the costs associated with increasing the handling fee shouldn’t be passed to the consumer.
Craig Schoenfeld, legislative council for the Iowa Beverage Association, said the Iowa Beverage Association views Culver’s proposed changes as a tax on consumers.
If environmental programs are a priority for Iowans, there is a better way to fund them, Schoenfeld said.
Schoenfeld said the bottle bill is outdated and there are more efficient ways to control litter.
“Let’s look at a comprehensive curbside recycling program,” Schoenfeld said. “Let’s not try to prop up an antiquated system.
Schoenfeld questioned how a retailer will be able to logistically handle 350 million more containers to process.
Schoenfeld also criticized Culver’s plan to transfer unredeemed deposits to the state. He said those funds help offset costs associated with the bottle bill including fraudulent redemption for border states, fuel, warehouse space and salaries.
If the governor’s original plan goes into effect, with an increase of a penny handling fee and a penny to REAP, along with the state collecting unredeemed deposits, Schoenfeld said there would be a $1.20 difference in the price of a case of pop in Iowa and Illinois.
State Sen. Tom Rielly, D-Oskaloosa, said he was skeptical Culver’s proposal would make it in the Senate. He said there has been a reaction against a proposed 10 cent deposits.
Rielly said REAP has been successful. He also said he is not sure if a 1 cent tax on bottles is the right way to increase funding for the program.
Rielly said he needs to look at details of the proposal.
“I’m trying to keep an open mind,” Rielly said. “The average Iowan’s bottom line is what I’m concerned about.”
State Rep. Eric Palmer, D-Oskaloosa, said a variety of bills will be introduced and discussed, then molded in committees.
Palmer said people don’t like the idea of paying 10 cents to get back 8 cents.
He also said he would like to consider expanding coverage to include water bottles. Palmer also said increasing the handling fee needs to be considered. He said local redemption centers may need another penny or they will close.
Herald Staff Writer Wes Kappelman can be reached by e-mail at news2@oskyherald.com
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