Expanding the Bottle Bill

Governor Paterson has unveiled his new budget and, no surprise, he's calling for the expansion of the bottle bill in the belief that-through the escheating of the unredeemed deposits-he can garner $118 million for his beleaguered state. What he hasn't done, is figure out what this expansion would mean to the state's supermarket industry-particularly in NYC where food markets are as beleaguered as the state's budget is.

Local markets-and we'll include bodegas and green grocers in this equation, since these smaller operators are also mandated to redeem deposit containers-are suffering from an array of regulatory and tax burdens that make additional redemption burdens extremely problematic; and, of course, the situation is exacerbated by the space constraints of the inner city food retailers.

Along with these burdens, city store owners have been suffering because escalating rents have, combined with the other overhead challenges, forced hundreds of mid-sized and smaller food stores right out of business. And the fact that adding sweet juice beverages will increase the sanitation issues for these stores, only adds to the rationality of the retail opposition.

If we're looking to increase the number of supermarkets-particularly in low income areas-we need to reduce overhead, and not add to the cost of doing business, something that an expanded bottle bill absolutely will do. The food retail business, at all levels, has been an incubator for minority business growth; over half the supermarkets in the city are minority-owned. But because of escalating costs, the NY Times has shown that many of these operators are being driven out of the city-and are opening stores in lower taxed and less challenged regulatory environments.

And then there's the fact that the escheats clause will simply result in the consumer paying more for her beverages-since the unredeemed deposits retained by beer and soda companies are used to defray the expense of container collection. In a recession, where folks are being laid off and more and more people are utilizing food stamps, adding to the cost of beverages is simply a bad idea-one that will impact low income shoppers more than other consumers.

Interestingly enough, bottle bill expansion has generated opposition within the environmental community because it appears that the governor plans to utilize a shell game to substitute the escheats money that has yet to be collected-the expansion of the bottle bill hasn't been, and may never be, passed-for actual dollars sitting in the Environmental Protection Fund.

As the Legislative Gazette points out: "Recently the governors proposed cuts have provided for us a frightening omen and we are concerned that the Environmental Protection Fund is not a priority for this administration,” said Adrienne Esposito, executive director of Citizens Campaign for the Environment...Paterson includes in his midyear budget plan the expansion of New York’s bottle deposit law to include (A.8044a/S.5850a) expanding nickel deposits for all noncarbonated drink containers such as water bottles and juice containers, placing the unclaimed funds into the EPF.The governor’s proposal however would have transferred these unclaimed bottle deposits — an estimated $118 million per year — into the EPF, and then divert existing revenues from the EPF into the General Fund for the state, according to Esposito."

Of course, the environmentalists are but fleeting allies here; and if the governor sent the escheats into the general fund they wouldn't object at all: "The group suggested that instead of the governor cutting money from the EPF for the General Fund, he instead could transfer the revenue from bottle bill into the General Fund." For the time being, however, these groups stand opposed and can offer some short term help to the grocery industry.

So we should be prepared for a major budget battle-on this, and so many other contentious items. The full weight of the food retail community will have to be brought to bear if the expansion effort is to be defeated in this fiscal climate. With the assembly having staked out a pro-expansion position in the past, it may be up to the leaderless state senate to put the kibosh on a bad idea-one that will hurt consumers and business alike.