Friday, March 30, 2007

Bottles Returned

At the eleventh hour the "Bigger, Better, Bottle Bill" fizzled, and was removed from the executive budget in negotiations between the governor and the legislature. Which is, according to our friends over at Urban Elephants, good news indeed. As Scott Sala points out, " would have amounted to a tax on consumers..."

And we concur in this analysis. The executive budget is no place for this kind of legislative initiative and the inherent problems in expansion should be thrashed out in legislative debate in both houses.The focus on unclaimed deposits was a particularly transparent effort to simply tax beverage consumers and transfer the tax money to pet environmental projects at the DEC.

Now we have been involved in this issue for the better part of twenty five years (having served as the chairman of the industry/labor coalition that fought the original bottle law). The issue of the unredeemed is not insignificant. By allowing franchise wholesalers and bottlers to initiate the deposit the state created a powerful disincentive to redeem.

This disincentive allowed these deposit initiators to abuse the system and exploit the retail redemption points. Willingness to redeem became a weapon that was used to coerce independent distributors to purchase exclusively from the wholesalers. Retailers who became container sheds and over redeemed were given a hard time and were never adequately reimbursed for their costs in the over-redemption of containers.

So the nickels are the linchpin in the faulty redemption structure. Escheating them, however, only exacerbates the problems in a system that is badly in need of an overhaul. The redemption process must be separated from the sale process, and the money that is left from non-redemption should be channeled back into making redemption more efficient. Finally, handling fees should be raised and an infrastructure of redemption centers set up so that the deposit system, the most capable recycling method available, can be expanded without crippling spaced-out retailers.