By exploiting gaps in our recycling system, smugglers rob Michigan taxpayers and our environmental cleanup fund of tens of millions of dollars every year.

This issue was the plotline for a classic Seinfeld episode in which Kramer and Newman comically schemed to smuggle cans and bottles from New York to Saginaw to make some big bucks because of the higher deposits here.

But for Michigan, this problem is no laughing matter -- and the Legislature must act on it now, before breaking for the summer.

Every year, dime by dime, smugglers rob an estimated $10 million from Michigan taxpayers -- and that amount may be much higher. Given the quantities of pop and beer that we sell in Michigan and collect deposits on, Michigan should be sitting on a pile of unclaimed deposits -- that's unredeemed money -- upward of $25 million each year. Unfortunately, the most recent unofficial numbers from the State Treasury show that amount is south of $10 million and shrinking every year.

This fund pays for local environmental cleanups that strengthen neighborhoods, improve citizens' quality of life, attract investments and create jobs. The fund also helps local stores pay for recycling.

When smugglers illegally redeem out-of-state cans and bottles, the cash flow for an entire chain of businesses -- from stores to bottlers to distributors -- takes a hit. In the Niles area, in southwest Michigan, nearly two dozen stores have closed because of this problem.

Here in southeast Michigan, our two family-owned companies -- O&W in Ypsilanti and Central Distributors in Romulus -- paid out $800,000 more in deposits than we collected in 2007. Those dimes should be going to Michigan's environmental cleanup fund. The bottom line: Smugglers are robbing Michigan's future.

We must crack down on this problem first before considering any expansion of the bottle bill. Such a move would be premature and open the floodgates to more smuggling and make a bad situation even worse.

Right now, we can't tell when an out-of-state bottle or can gets returned in Michigan.

The solution is twofold. Beverage manufacturers must put a special mark identifying a container as a Michigan can or bottle. At the same time, reverse vending machines -- the machines that collect containers and return the deposits -- must be upgraded with technology that can read the mark and identify a Michigan container.

It's a onetime investment that will help Michigan recover millions of dollars every year.

Last year, law enforcement agencies broke up a massive ring in the Detroit area that illegally returned out-of-state cans and bottles. While businesses from Niles to Monroe to Ironwood in the Upper Peninsula have always been hit hard, smugglers are now driving farther into Michigan to illegally return out-of-state cans and bottles, thus worsening the problem.

Michigan distributors are proud to be among the state's largest recyclers, taking in hundreds of millions of cans and bottles each year and keeping them out of our landfills. At the same time, we also see firsthand how smugglers exploit our system and cause Michigan to hemorrhage money.

That's why we call on the Legislature to fix the system first before we even debate the notion of expanding it.

DON KLOPCIC is president of Central Distributors of Romulus. JAMES WANTY is president of O&W Inc. of Ypsilanti. Write to them in care of the Free Press Editorial Page, 615 W. Lafayette, Detroit, MI 48226 or at oped@freepress.com.