October 10, 2009

Editorial

A de facto tax is a tax nonetheless

Sometimes it seems as though the state of Connecticut can’t raise revenue if it’s not taken out of the wallets of state residents. The bottle bill that went into effect Oct. 1 is yet another glaring example.

You know the 5-cent return you get when you recycle a can or bottle? Well, the state in its infinite wisdom decided that all the unclaimed deposits — the 5 cents from every bottle not recycled — belongs to the government. That change went into effect the first of the month, as well as an expansion of the deposit program to include water bottles, too.

Put aside for a moment the fact that the state’s claim to those deposits is dubious at best. The manufacturer makes the product, the distributors ship it, local stores sell it and residents buy it. How is the state involved? Also put aside the environmental aspect. One intention of the bill is to increase recycling and reduce landfill. A worthy goal, perhaps, but at what cost? Even assuming that the state could logically claim that money (and it does work out to be a lot — including water bottles, unclaimed deposits could mean as much as $17 million a year in 5-cent increments), it’s coming out of the pockets of the people. Before Oct. 1, every nickel made from bottles or cans not recycled went to the beverage distributors, as it has since the original Bottle Bill went into effect in 1978. Did state lawmakers think that those beverage distributors would eat that lost revenue? Of course not.

Distributors responded by upping their prices. You might have noticed that cans of soda just went up a bit. Since water bottles are now included in deposits, that product has seen the most significant rise, with some supermarkets raising the price of a six pack of water more than a dollar. So, yes, perhaps the state will make a few more nickels as a result of the policy. What it amounts to, though, is a de-facto tax on beverages, forced down the throats of every beverage buyer, even those who do recycle their cans and bottles. Before the state starts claiming money to ease its burden and reduce the deficit, lawmakers should think long and about how those claims would affect their already cash-strapped constituencies. It may not be called a “tax” but laws like the Bottle Bill revision have consequences that are, at best, unintended. At worst, lawmakers knew when they voted for the bill that their neighbors would be paying the price.

Any more laws like that and state residents will be drowning in disguised taxes.

http://www.registercitizen.com/articles/2009/10/10/opinion/doc4ad00d11deb98164940405.txt