Forced Deposit Laws - There Are No Winnerspercent of litter in rural areas2 1 Franklin Associates...

FORCED DEPOSIT

LAWS There

Are No Winners

Forced Deposit Laws. . . There Are No Winners

Contents

Introduction Municipal Waste Management Roadside Litter

The Forced Deposit Losers Consumers Lose Businesses Lose AB 2020: The California Experiment k p a y e r s Lose

Forced Deposits The Environmental Losers Voluntary Recycling Crippled Water Wasted Gas Guzzled Litter Problem: Unsolved Solid Waste

m -_I-- A n..-..fi:tn J? u1 ccu ucpu31m

New York Deposit Law Legacy The New York Experience

Winning Alternatives lb Forced Deposits Anti-Littering and Recycling Laws Beverage or Business Industry Recycling Programs (BIRPs) The Keep America Beautiful System Other Statewide Voluntary Recycling Programs Curbside Recycling Programs and Source Separation: The Way of the Future Summary

01989 by the National Soft Drink Association. All rights reserved.

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Introduction October 1, 1972, is a date that

probably will not find its way into the history books. However, for millions of American consumers and businesses involved in the production, packaging and marketing of soft drinks and beer, this date marked the beginning of a national movement to impose a beverage container deposit system on consumers in every state of the union. On October 1, 1972, forced deposits became law in the state of Oregon.

Following months of debate, supporters of Oregon’s so-called “bottle bill” succeeded in convincing the state legislature that by forcing consumers to pay a deposit of a nickel or more on each soft drink and beer container they purchased, and by requiring them to return their empties to get their money back, Oregon’s litter and solid waste management problems would be resolved and consumers would reap the added benefits of reduced beverage prices and increased employment. In short, they claimed that under the forced

no losers. They were wrong. Since 1972, nine states-

Oregon, Vermont, Maine, Michigan, Iowa, Connecticut, Massachusetts, Delaware and New York-have enacted forced deposit laws. And in each instance, the facts show that the claims of “bottle bill” advocates have not weathered the test of time. The following pages offer documented evidence that where forced deposit laws have been enacted, consumers, businesses and state governments have suffered significant losses, while meaningful reductions in litter and solid waste have not materialized.

depesit system, there %VWd!C! be

In short, under forced deposits, there are no winners. In fact, the system has not only been proven costly and inefficient, but also incapable of addressing the complex waste management issues our society faces today. Little wonder that no state has adopted a forced deposit law since 1983, and that voters and legislators in 41 states have rejected some 2,000 container deposit proposals since the Oregon experiment of 1972.

This booklet focuses on states that levy forced deposits on soft drink and malt beverage consumers. It compares this outdated regulatory approach with programs in other communities that encourage cooperation among consumers, businesses and government to eliminate unsightly litter and reduce the volume of solid waste. The underlying premise for this discussion is that voluntary citizen action, often in partnership with positive government programs, is an effective, low-cost way to solve the litter and solid waste management problems we confront today.

MUNICIPAL WASTE MANAGEMENT Municipal waste management is

fast becoming a national issue of concern to all citizens. Many communities are running out of landfill space. Waste management costs are rapidly increasing. Some cities have resorted to shipping their garbage to other locations, at tremendous costs. While there are differing opinions about the

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severity of the problem, experts agree that it has the potential for producing serious economic and environmental consequences for virtually every segment of society.

Recycling, incinerating and landfilling are the three primary methods utilized to process America’s municipal solid waste. Landfilling is, by far, the dominant method.

The solid waste management a more balanced approach towti processing municipal waste. Am that means reducing our reliancc on landfills by increasing recycll and energy recovery through incineration.

problem certainly merits the attention of industry and community leaders, as well as individual citizens. The beverage industry has led the nation in developing recycling and reclamation technology for its packages because it strongly believes that effective waste management, at affordable costs, can only be accomplished through

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For over two decades, the American beverage industry has been encouraging voluntary recycling of used beverage containers. Great progress has been made in recycling aluminum cans and glass bottles. And major advances have occurred in new recycling technology for plastic containers, to say nothing of their value as a fuel source in waste-to- energy incineration systems. Plastic beverage containers are now being reclaimed and recycled at record-setting rates. A strong national market for recyclable plastic has been created over the past decada

Currently, over 50 percent of the aluminum beverage cans sold in the United SEes are recycled. And glass recycling has reached record levels. In fact, the amount of glass discarded into municipal landfills has declined significantly since 1970?

ROADSIDE LITTER Few Americans would deny that

litter is an unsightly problem or that it must be reduced. Littering is an offense against the environment that costs taxpayers millions of dollars each year. Regrettably, the littering habits of a few in our society have resulted in government-imposed forced deposits that penalize innocent consumers as well as the beverage industry.

The fact is that beer and soft drink containers are only a small part of the total litter problem. A nationwide survey of litter composition shows that beverage- related litter accounts for little more than 10 percent of total urban litter and no more than 20 percent of litter in rural areas2

1 Franklin Associates Ltd, 1984 A Nationwide Estimate of the Percentages of Beer and Soft Drlnk Containers, institute for Applied Reseamh, December 1983.

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1 The Forced Consumers Lose Deposit Losers PRICE INCREASES

Beverage consumers suffer a tremendous burden wherever bottle bills are enacted into law. Without exception, forced deposits have increased the price people pay for soft drinks and beer. Massachusetts consumers experienced the inflationary effect of forced deposits soon after Massa- chusetts’ bottle bill went into effect. The Boston Globe reported, “Beer prices jumped $1.10-$1.25 per case in the last month. . .soft drink prices went up 40-60 cents per case.”3

What happened to beverage prices in Massachusetts under the forced deposit system was quite predictable. Research published by Michigan State University’s Department of Resource Development showed that when Michigan’s bottle bill became law in 1978, wholesale and retail prices increased dramatically.

The researchers found that “the price consumers paid for beer in Michigan was almost 20 percent higher than national price trends.”4 They also estimated that during the first three years of forced deposits, the amount paid by Michigan beer consumers in excess of nationally predicted prices exceeded $194 million. And yet, state records show that during the three years prior to forced deposits, the state of Michigan spent only $6 million on litter clean-up.

“N.H., R.I . Merchants Pleased as Punch Over Massachusetts Bottle Law,” The Boston Globe, February 2 , 1983. * Effects of Michigan’s Mandatory Beverage Container Deposit Law, Sjolander & Karela, June 11, 1984, p. 7.

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“The Price of Cleanliness,” The Economist,

“Cost of Bottle Law: $20 Million,” The Des September 24, 1983.

Moines Registel; August 5 , 1980.

In September 1983, followini the implementation of New York’s deposit law, The Economist reported, “New Yorkers are paying up to 25% more on some brands of beer. they will be paying $300 milliu a year in deposits alone. Price> increases will add roughly t h e same amount.’15 The story wa:r much the same in the Midwes; One year after forced dep0sit.c became law in Iowa, The Des Moines Register published a story reporting that the “bott, bill” cost Iowans at least $20 million during its first year- and that is a conservative estimate.”6 The Iowa Depart- ment of Environmental Qualitt later concluded that beverage: price increases had cost consumers an additional $36 million to $46 m i l l i ~ n . ~

The dramatic price increase:, felt by consumers in bottle bill states were triggered by substantially higher handling cosll produced by the inefficient forced deposit system. Univer sity of New Hampshire professl Starr F. Schlobohm observed ii his 1983 study of beverage prices in Northeastern states that, “The return flow of bever2ge coIlt2inel3 in states with mandatory deposit requii ments costs the consumer between 12% and 13.5% more for soft drinks and malt beven age purchases.” He added, ‘‘T resulting higher prices. , .can best be described as an ‘inefficiency tax’ levied on am efficient channel of distributii designed to deliver products from producer to consumer.”s3

Where forced deposits are enacted, the efficient beverag distribution system is practica

Beverage Price Survey, Iowa Department of’

1982-3 Beverage Price Study, Starr F. Schlob) 1 Environmental Quality, February, 1981.

Ph.D., March 3, 1983.

i

dismantled and saddled with a two-way container distribution and retrieval network. The network is both inefficient and costly. Billions of used containers are forced back through the retrieval network from consumers, to grocers, to soft drink bottlers, and beer wholesalers. At each step, substantial costs are incurred, which adds to the price of the beverage product. (See Graphs 3a & 3b.)

Under the burden of forced deposits, grocers must purchase new equipment, expand costly storage space, and spend more money for sanitation. In its first report to New York’s Temporary State Commission on Returnable Beverage Containers, the Nelson A. Rockefeller Institute of Government found that it costs retailers about 2.6 cents to handle an empty container returned under the state’s deposit law.g That’s 62 cents in added handling costs, just for retailers, for a 24-unit case of soft drinks.

Under forced deposits, bottlers and wholesalers must purchase trucks, employ more drivers and pay for additional warehouse space. An economic impact study focusing on soft drink bottlers found that in 1984, it cost New York bottlers an average 2.2 cents per returned container to meet the requirements of the forced deposit system!O A similar study in Massachusetts reports that from 1983 through 1987, total soft drink bottler costs linked to forced deposits amounted to $94.4 million!’ And a 1987 report prepared by the Legisla-

The New York Returnable Beverage Container Law: The First Year (Report of the Nelson A. Rockefeller Institute of Government to The Temporary State Commission on Returnable Beverage Containers), March 15, 1985.

niifarti~ren Institute

Economic Effects of the New York Returnable Container Law on Soft Drink Bottlers, Temple, Barker & Sloane, Inc., February 7, 1985. l1 Soft Drink Bottler Costs Under the Massachusetts Bottle Bill, Temple, Barker & Sloane, Inc., April 12, 1988.

1979-83 retail price surveg show that beer prices increase after enactment forced deposits.

Retail price surveys have c o n f i m d that soft drink prices increase following enactment of forced depositt The surveys were conducteu during the period 1979-83.

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tive Research unit of the Oregon state legislature estimates that in the nation’s first bottle bill state “. . .combined retailer and distributor costs of $54.8 million result in increased consumer costs of as much as $17 per person annually.’ ’12

The fact that consumers in forced deposit states continue to shoulder the burden of hefty beverage price increases has not gone unnoticed. In 1984, a Washington Post correspondent reported, “Proponents of the so- called bottle bill may be well- intentioned, but the proposal is a hodge-podge of half-baked ideas that have been tested and proven costly and ineffective in states where they have been adopted.”13 Some three years later, Washington, D.C. voters soundly defeated a proposed bottle bill initiative. Consumers and lawmakers in 41 states have consistently rejected efforts to impose forced deposits on their communities.

JOB LOSSES

sumers not only feel the pain in their pocketbooks through higher prices, but some also lose good-paying jobs. Rot.t!e hi!! supporters claim that the deposit system creates jobs for unskilled workers. That’s true. Retailers and distributors are forced to hire can and bottle sorters to process containers returned for deposit. These artificially created jobs add to consumer costs. But there is another side to the story. The deposit system extracts a high price for the creation of minimum wage jobs by eliminating higher-paying positions in the beverage container manufacturing industry.

With forced deposits, con-

According to the U.S. Depart- ment of Commerce, 82,000 good-paying jobs would be lost if Congress enacted a national deposit lawJ4 But there is no need to rely on government studies to demonstrate the impact of forced deposits on skilled workers. Plenty of real-life evidence exists to prove the point.

bottle bill became law, the Rockland County Journal-News reported, “There’s a cool, comfortable breeze wafting around much of the Glenshaw Glass bottle plant these days. Unfortunately, it’s blowing through the big glass furnace. Thanks to the ‘Bottle Bill’. . . there’s virtually no chance that 228 workers laid off by the Orangeburg plant will return this year.”15

New York deposit law, 471 workers at the Owens-Illinois glass bottle manufacturing plant in Brockport were informed that they would lose their jobs in 1985.16 In Elmira, New York, two of three glass furnaces at the Thatcher Glass Company were shut down, leaving some 250 :...=rkers merr.p!ey;.ed. The company filed for bankruptcy, citing a loss of more than $65 milli~n!~ (See Graph 4.)

The job-loss legacy of forced deposits has been felt by workers throughout the country. Some 800 skilled workers lost their jobs as a direct result of Michigan’s beverage container deposit In 1980, Connecticut taxpayers were told that at least $532,000 would be

Two months before New York’s

On the first anniversary of the

12 Oregon’s Bottle Bill: A n Overview, Melanie Zermer, Legislative Research, February 9, 1987. 13 “Maryland’s Bottle-Return Bill Is a Misguided Idea,” The Washington Post, January 23, 1984. 14 Stuff Study, U.S. Department of Commerce (A-01-75), October, 1975.

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15 “Adoption of Bottle Bill Seals Fate of Laid-Off Glenshaw Employees,” Journal News (Rockland County, New York), July 17, 1983. 16 “Plan to Shut Factory,” The New York Times, November 14, 1984.

“Bottle Law Smashing the Glass Industry,” Evening Press, (Binghamton, New York), January 9, 1985.

would be required to aid 556 workers who lost their jobs during the first year of Conne ticut’s deposit law.l9 Tragicall8 the story did not end there. In early 1983, one of northeaste! Connecticut’s largest employe the Glass Containers Corpora-. tion, announced plans to lay c c more than 220 workers due tcc the impact of deposit laws throughout New England.20

To hundreds of Massachusell consumers, 1983 also brought, unemployment. Forced deposj shut down a glass manufacturing plant in Mansfield, whi at full production provided livelihoods for 372 workers.21

The destructive impact of forced deposit laws on skilled manufacturing jobs has spreacc beyond the borders of states that have enacted them. In 1984, Brockway Incorporated announced it would shut its Rosemount, Minnesota contaiii manufacturing plant due to reduced demand for glass bot tles in deposit law states. Som 450 workers were affected. Ironically, the Minnesota legislature had investigated forced deposits in 1977 and concluded: “A mandatory depmit l2w ir? Klnnesnt2 wna have a negative impact on employment. . . the potential J losses would significantly disrupt the economic security7 hundreds of families.”22

The severe employment loss produced by forced deposit lat have been confirmed time ancc time again. In 1985, the Ganni

18 Fact Sheet, Owens-Illinois, Inc., 1979. la New Haven Registel; January 10, 1981. 20 “Glass Containers Laying Off 220,” The BOP: Globe, January 14, 1983.

22 Interim Report, Minnesota Senate Employn Impact Subcommittee, 1977.

The Boston Herald, April 7, 1983.

News Service reported that the cumulative effect of forced deposit laws throughout the country may force the shutdown of 11 plants employing more than 5,000 workers.23

have forced many skilled workers onto unemployment lines has not escaped the attention of groups representing millions of American workers. For example, the AFL-CIO actively opposes forced deposits: “This approach would result in the loss of 60,000 permanent, well-paid jobs in the bottle and can industries.”24 This is one issue where business and labor are in total agreement.

INCONVENIENCE

the primary economic burdens facing beverage consumers under the forced deposit system. However, there are other, less tangible hardships that merit consideration. Commenting on a proposed bottle bill in the District of Columbia, The Washington Times observed, “For D.C. consumers, the idea of storing used beverage containers in kitchens and food stores is vexing. Insofar as the dried sugar syrup that lines empty soda bottles is the next best thing to a cockroach aphrodi- siac, passing a law to move the sanitation problem indoors is a dubious blessing. Moreover, having to save and carry empty bottles, cans and plastic containers, merely a nuisance for some people, can be a hardship for the elderly and the handicapped .’ ‘25

The fact that forced deposits

Higher prices and lost jobs are

23 “Bottle Law Smashing the Glass Industry,” Gannett News Servicq January 9, 1985. 24 Kenneth Peterson, AFL-CIO, Senate Commerce Committee, November 5, 1981. 25 “Deposit Law Offers No Return,” The Washington Times, December 8, 1987.

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Beverage consumers who do not have the storage space in cramped apartments for bags of used containers, or are perhaps too frail to carry their empties back to the store, pay a heavy price under the forced deposit system-a nickel, or more, for every container they are unable to return, regardless of the circumstances.

The New York Times identified yet another bottle bill drawback when it reported that “Consumers are finding their choice of beer, soft drinks and sparkling water significantly reduced.”26 Under forced deposits, retailers are required to make room for literally thousands of returned empty beverage containers. They are often forced to discontinue slower-selling beverage product lines to conserve storage space. In the end, the consumer is the loser as the range of products available for purchase is restricted.

In Massachusetts, where it was necessary for the state to finance a special bottle law consumer hotline, the Medford Mercury summed up consumer attitudes about the forced deposit system: ‘‘Confusion and frustration. Those are the two emotions most often expressed by consumers and merchants alike when they talk about the bottle

Law,” The New York Times, September 17, 1983. 2T “Consumer Unit Says Bottle Bill Confusing,” Mercury (Medford, Massachusetts), February 21, 1983. 28 The Fate of Used Beverage Containers in the State of New York, Franklin Associates, Ltd., July, 1986.

Law, (Rockefeller Report), March, 1985. 30 Economic Effects, Temple, Barker & Sloane, Inc., January, 1985. 31 Soft Drink Bottler Costs Under the Massachusetts Bottle Bill, Temple, Barker & Sloane, Inc., April 12, 1988.

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Businesses Lose SALES LOSSES

Consumers aren’t the only victims of forced deposit laws. Beverage retailers, distributors and bottlers also lose under the deposit system. Huge cost increases, translated into higher prices, seriously harm beverage sales. Many consumers respond to higher prices by reducing their beverage purchases, or by traveling to non-deposit states to buy lower-priced beer and soft drinks.

In a 1986 study focusing on the New York deposit law, Franklin Associates, Ltd., found that, “Overall packaged beverage sales decreased 5.6 percent in the first full year following the implementation of the law.”28 This finding is supported by earlier research conducted by the Rockefeller Institute which concluded that beer sales plummeted by 7 percent following enactment of the New York bottle bill,2g and by Temple, Barker & Sloane, Inc., which found that when lost growth was considered, New York soft drink bottlers experienced a 6.4 percent loss in

under forced deposits.30

deposit states. A 1988 study by Temple, Barker & Sloane, Inc., which focused on the impact of the Massachusetts’ deposit law, concluded: “Bottlers have also been affected by decreased sales as a result of the bottle bill with current sales trailing $28 million per year behind where they

3aic;3 --l-- r--h-mn VWULLLC thn UCL fimt L I I U ~ XTAOV J ~ ’ U I

New York is not unique among

would have been without th bottle bill .’ ’31 While beverage sales were plunging in Massa chusetts, beer sales were up1 percent in neighboring New Hampshire, a state which prefers voluntary recycling c: forced deposits.32

A 1983 research report on impact of forced deposit law2 concluded that consumers fleeing high deposit law pric in Vermont purchased the equivalent of 7.9 million, 12-ounce containers of beer New Hampshire stores durirr 1981, while residents of Maiii deposit state since 1978, bou some 22 million, 12-ounce containers of beer in New Hampshire during the periocc 1978-81. In 1981 alone, New. Hampshire collected $510,4E additional excise taxes as a result of these out-of-state purchases. The study predic: Massachusetts consumers wfl purchase some 14 million gal of beer a year in neighborini non-deposit states after theii state imposed forced deposii 1983.33 The Boston Globe latL reported, ‘‘Massachusetts licc store owners complain their business has halved since t h law went into effect.”34

Because their livelihood depends on profits from hig: volume packaged beverage f f

small neighborhood grocery. package stores are particulai hard hit by deposit law sale:: losses. Two weeks after forc deposits became law in Massachusetts, package storr owner William H. Manzi toht Associated Press, “It’s just ruining me. I’m right on the New Hampshire border. I dici think it would be this bad.”’

32 New Hampshire Wholesale Beverage Association, 1983. 33 New Hampshire’s Solid Waste Manageme“ Problem, Starr F. Schlobohm, Ph.D., Janualr 34 “N.H., R.I. Merchants Pleased as Punch (( Massachusetts Bottle Law,” The Boston Gloll February 2, 1983. 35 Ibid.

In Connecticut, packaged beer sales dropped 10.6 percent the first year of forced deposits.36 In Iowa, border area sales dropped as much as 20 percent right after forced deposits became law.37 Vermont beer sales fell 9.1 percent,38 and in Maine, beer sales declined 6.8 percent.3g (See Graph 5.)

In the wake of Michigan’s deposit law, border area retail stores lost 50 percent to 80 percent of their pre-deposit soft drink sales to neighboring states. Soft drink sales in Michigan are reported to have plunged 33 percent from 1978 to 1980.40 Virtually every link in the beverage production chain is weakened by forced deposit sales losses. Wholesalers are forced to make tough decisions that often lead to layoffs and shutdowns. According to Newsday, eight beer wholesalers on the Michigan border were forced out of business by bottle law sales cuts.41

wholesalers also lose sales when retailers stop featuring slow- selling beverages to conserve costly storage space for returned empties. The New York Times surveyed retailers when forced deposits hit the Empire State and discovered that many retailers had removed products from the shelves. “Zabar’s has taken out all of its soft drinks, reduced its variety of sparkling waters from four to two and its selection of beers from about 50

Brewers, bottlers and

to 11.”42

Deposit-induced pr ice increases have resultE signtyicant beverage SF losses. Sharp losses OCC~ during the first year ‘15 the forced deposit systt

I 36 New Hampshire’s Solid Waste Management Problem, Starr F. Schlobohm, Ph.D., January, 1983. 37 Iowa Wholesale Beer Distributors Association, July, 1980. 38 Forced Deposit Laws: THEY AREN’T WORKING!, Can Manufacturers Institute, 1984. 39 Ibid.

40 “Living with a State Deposit Law,” Stuart Giller (Speech), International Beverage Industry Exhibition and Congress, Atlanta, November 30, 1982. 41 Newsday, March 29, 1982. 42 “Beer Prices Soar,” The New York Times, September 17, 1983.

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COST INCREASES Adding insult to the injuries

suffered as a result of dramatic sales losses are the sizeable cost increases the beverage industry sustains when bottle bills become law. “Most beer and soda manufacturers, wholesalers and retailers contacted say the bottle bill has been an economic disaster, hiking product and handling costs, creating storage and hauling problems, and reducing business,’ ’ reported the Gannett Westchester Newspapers one year after the New York bottle bill became

For retailers, forced deposits mean storing literally billions of empty bottles and cans on high priced floor space. Payroll costs soar when unskilled workers are hired to process the returns. According to the Oregon legislature’s own research department, “Estimated annual statewide

retailer costs are approximately $31 million based on an annual sale of 1.15 billion beverage containers.’ ’44

Sanitation expenses also increase under forced deposits as store owners attempt to protect customers from the vermin and rodents that often accompany the return of dirty empties. Modern Grocer; a food industry trade publication, reports that “retailers have told of 12 to 15 vermin jumping out of cans, and both dead and living animals of all sorts poking out of returned containers.”45 In Oregon, for example, 42 percent of the sanitation warnings issued to food stores during the period July 1985 to June 1986 involved the handling of returned container^.^^

A 1981 Owens-Illinois survey of 425 retail stores in deposit states estimated that handling costs per returned container averaged about 2.4 cents each.47

43 “The Bottle Bill: A Bottleneck or Business Boom?” Gannett Westchester Newspapers, April 22, 1984. 44 Oregon’s Bottle Bill: A n Overview, Melanie Zermer, Legislative Research, February 9, 1987. 45 Modern Grocer (Editorial), November 23, 1984. 46 Oregon’s Bottle Bill: An Overview, Melanie Zermer, Legislative Research, February 9, 1987.

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47 Cost of Handling Returned Beverage Containers in Supermarkets, Owens-Illinois Glass Container Division, March 31, 1981. 48 Cost of Handling Returned Beverage Containers in Supermarkets, Food Marketing Institute, October, 1980.

A similar study commissioned the Food Marketing Institute, and indexed to 1984 dollars, estimated that food retailers spend up to 3.2 cents to proce each container returned unde. the forced deposit system.4s

For bottlers and wholesale distributors, forced deposits mean new warehouses to holc empties, expensive machinery/ process them, and trucks and drivers to handle them. A 198 survey of Massachusetts soft drink bottlers found that tota, bottler costs to carry out the provisions of the deposit law amounted to $21.9 million in 1987. (See Table 1.) When the: costs are offset by income fro) recycling, bottler costs in Massachusetts still totaled $1k million.49 A 1984 survey of 32 New York bottlers found thein net monthly costs under the deposit system amounted to nearly $1 million.50

in New York made a capital investment of $80 million to meet deposit law require- m e n t ~ . ~ ~ The wholesalers spen $22 million for new trucks, processing equipment, and mi than 1.5 million square feet 0) additinna! warehowe spare 522

Have the millions of dollars; expended in bottle bill states been justified? The facts speaa for themselves. Litter control1 has consistently been cited a!: the primary justification for government-imposed forced deposits. But when industry costs are compared to New Yii State expenditures for litter control, the fallacies of the forced deposit system becomcc crystal clear. New York spent, only $2.6 million on statewidl litter control during pre-depc year 1982.53 That means the beverage industry was forcec

Franchised beer wholesaler.

49 Soft Drink Bottler Costs Under the Massachusetts Bottle Bill, Temple, Barker & Sloane, Inc., April 12, 1988. 50 Economic Effects of the New York Returnable Container Law on Soft Drink Bottlers, Temple;, Barker & Sloane, Inc., December 11, 1984. 51 Modern Brewery Age, February 20, 1984.

Ibid.

spend several times as much just handling empty bottles and cans that account for no more than 20 percent of rural litter and little more than 10 percent of urban litter.54

roadsides? Has total litter been reduced in New York? Not according to the Rockefeller Institute. The Institute’s findings show the change in total litter in New York has been inconclusive and savings to the state have been “minimal.” More proof that under forced deposits there are no winners!

FUTURE THREATS Beverage businesses have

discovered that new and oftentimes costly problems surface long after bottle bills become law. For example, fire safety officials in Massachusetts have warned businesses that the deposit law’s requirement that they store large numbers of pallets and containers creates a potentially serious fire hazard. 55

And consider this item from the Schenectady, New York, Gazette: “It came down to a matter of your-bottle-deposit-or-your-life for an Arbor Hill shopkeeper late Friday, when a man pulled a gun and forced him io redeem $1.05 in dirty soda bottles.”56

Businesses also have discovered that when bottle bill advocates realize that forced deposits aren’t working, they attempt to tinker with the law in ways that often spell even higher costs for consumers and the beverage industry. Several states have unsuccessfully tried to offset revenue losses under the costly forced deposit system by forcing bottlers and distributors to give to the government deposits paid on containers that have never been returned.

But what about results on the

These so-called escheat bills, which may be unconstitutional, are aimed at depriving bottlers and distributors of funds that partially offset higher costs and avoid consumer price increases.

The Worcester, Massachusetts, Gazette pinpointed the real motive behind escheats legislation when it editorialized that escheats “would amount to a new, hidden tax on the price of beer and soda, one that would hit every consumer.”57

Escheat advocates claim that unredeemed deposits create windfall profits for bottlers and distributors. The facts do not support this claim. Industry costs have consistently exceeded unredeemed deposits. For example, a survey of bottle law costs in Massachusetts shows that in 1987, with unredeemed deposits and recycling income taken into account, soft drink bottlers still lost $1.4 million to the costly forced deposit system.58

Lawmakers in virtually every deposit state have been forced to consider comprehensive solid waste management legislation because the promised benefits of the bottle bill they adopted never materialized. Regrettably, by the time the true nature of forced deposits becomes clear, the damage to the marketplace has already been done.

Under forced deposits, dis- putes often erupt between distributors and retailers due to the inequities of the system. Bottlers are required to pay their retail customers a handling fee ranging from 1 cent to 3 cents per container. The fee is arbitrary and may have no relationship to the actual cost incurred, or to local market conditions. The system virtually assures that retailers will

63 The Department of Transportation Ezpenditures Analysis by Function, Litter Pick- up E01, June 29, 1983. 64 A Nationwide Estimate of the Percentages of Beer and Soft Drink Containers in Littel; Institute for Applied Research, May, 1983. 55 “Bottle Law May Pose Hazard,” The Union, (Springfield, Massachusetts), February 26, 1983.

continually return to their state legislature to seek higher handling fees, and that bottlers and distributors will have to oppose fee increases that add directly to the net losses they incur.

By its design, the forced deposit system turns long-time business partners into political adversaries-hardly the climate for the efficient conduct of business. Moreover, handling fee increases produce consumer price increases. In Connecticut, an increase of the 1 cent handling fee to 2 cents was estimated to result in an additional $8.24 million in product price increases.59 Handling fee increases fail to provide store owners with the flexibility or incentive to control costs. Container handling ineffici- encies, if they exist, are passed on to the consumer through higher beverage prices. In the end. there are no winners.

AB 2020: THE CALIFORNIA EXPERIMENT

ture enacted AB 2020-the California Beverage Container Recycling and Litter Reduction Act. AB 2020 was the result of a compromise between beverage industry, retail and environmental groups, and crafted to reflect conditions unique to California. The goal of AB 2020 is to achieve an 80 percent recycling rate for plastic and glass bottles, and metal cans.

In 1986, the California legisla-

66 “Bottle Deposits Given at Gunpoint,” Gazette (Schenectady, New York), June 23, 1987. 67 “That Hidden ?ax,” Gazette (Worcester, Massachusetts), March 1, 1988.

Massachusetts Bottle Bill, Temple, Barker & Sloane, Inc., April 12, 1988.

Soft Drink Bottler Costs Under the

~

~ Association, October 27, 1982. John H. Downs, Jr., National Soft Drink

~

I

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Unlike traditional deposit laws, AB 2020 does not require consumers to place a deposit on each beverage container they purchase, nor does it require &ai!erc, btmes and whesesa!erS to collect and process returned containers. Instead, the beverage industry pays the state a redemption value on each beverage container sold in California. The size of the redemption value, which can range from 1 cent to 3 cents, depends on whether a container type (aluminum, glass, plastic) has achieved at least a 65 percent recycling rate by deadlines estab- lished in the law.

The funds collected from the industry are distributed to recycling centers that must pay consumers the full redemption value for each container they return for recycling. Container manufacturers must also guarantee recycling centers a minimum scrap value for the material used in their containers. The minimum scrap value is set by the state. Surplus funds resulting from unredeemed containers are used to finance state operating costs, special bonuses paid to consumers, and to subsidize recycling center operations.

Since retailers need not take back used containers, AB 2020 requires the creation of recycling centers within one-half mile of major grocery stores to assure convenience for those consumers wishing to redeem their beverage containers.

The jury is still out on AB 202(( The program is not without flaws; Implementation of the law has required the creation of a large bureaucracy. As of this writing, tlt legislature continues its attempts to work out the bugs in this experimental alternative to forceci deposits.

AB 2020 was tailored specifi- cally to California’s unique recycling environment. Its year-long moderate climate and its estab- lished recycling infrastructure are key factors that may ultimately produce an AB 2020 success story. Only time will tell.

m a y e m Lose REVENUE LOSSES

Bottle bill advocates have succeeded in convincing some! state legislatures that the forco deposit system is good public policy, although some 2,000 forced deposit bills have been defeated at the local, state am federal levels. But it’s difficultt to identify which segment of the public they’re referring tor. Under forced deposits, it’s clea that beverage consumers and businesses are hurt. And there also is strong evidence that taxpayers, in general, suffer when a bottle bill becomes law

The enactment of beverage container deposit legislation hi resulted in sizeable losses in

14

state and federal tax revenues during a time of serious budget deficits. For the average taxpayer, that spells either higher taxes or reduced government services.

Can Manufacturers Institute found that deposit states lost millions of dollars in malt beverage excise tax revenues when consumers cut their beer purchases in the wake of deposit- induced price increases. The researchers projected the total state revenue loss experienced by the nine deposit states during the period studied at some $28 million. (See Graph 6.) The federal government is estimated to have lost $48.2 million.60

In a study prepared for the Florida legislature, professor Richard Sjolander projected that the state would lose $11 million annually in malt beverage tax revenues if Florida enacted a bottle

confirmed this tax drain impact in his study of New England bottle laws. Schlobohm calculated that during the first full year of forced deposits, Vermont lost $185,750 in tax revenues solely as a result of consumers crossing the border to purchase beer in deposit-free New Hampshire.62 And The Dallas Morning News provided further evidence that taxpayers are being taken to the cleaners by mandatory deposits when it reported that Massachusetts beer tax revenues were down 7.5 percent during the first year of forced deposits.63 Even when sales losses are stabilized, these lost tax revenues are never recaptured.

Research commissioned by the

Dr. Starr F. Schlobohm

Plant shutdowns resulting from the enactment of bottle bills also produce severe consequences for taxpayers in local communities. For example, taxpayers paid dearly after the closing of a container manufacturing plant in Brockport, New York, created an immediate $40,000 shortfall in village franchise tax revenues and a 13.5 percent loss in the property tax base. Brockport had an annual budget of only $2.5 million at the time of the plant

This story has been repeated time and time again throughout the country.

HIGHER TAXES When it comes to sales taxes,

forced deposits put taxpayers in double jeopardy. While individual consumers are forced to pay higher sales taxes for beverages due to deposit-induced price increases, consumption of packaged beverages declines so dramatically with forced deposits that the net result is lost sales tax revenues to state governments. In the end, taxpayers get soaked coming and going.

of forced deposits spell disaster for citizens concerned about higher taxes. Excise tax revenues go down as beer consumption plummets. In states that levy a sales tax on soft drinks, sales tax revenues go down as soft drink sales fall. Corporate tax collections dive, as profits are reduced. Unemployed container-industry workers are no longer able to pay taxes. In the final analysis, the taxpayer shoulders a tremendous burden under the forced deposit system.

All told, the tax consequences

Impact of Deposit Laws on FederalBtate Excise lhx Revenues, Can Manufacturers Institute, 1984. 61 Container Deposit, Litter Control and Recycling Study, Richard Sjolander, The University of West Florida, January 21, 1986.

MORE GOVERNMENT SPENDING

As if the revenue drain and tax increases produced by bottle bills are not bad enough, the fact is that forced deposits also mean increased spending for state and local governments. Jobless beverage and container industry workers must be paid unemployment benefits. As mentioned earlier, it cost Connecticut at least $532,000 in 1980 to compensate workers who lost jobs or working days as a direct result of forced deposits.65

Enforcement personnel must be hired to oversee the day-today operation of the forced deposit system and to prevent the mass importation of malt beverages by consumers seeking lower prices in nearby non- deposit states. Governments also may be forced to spend more money on consumer information programs to deal with the confusion and frustration produced by the complicated container deposit process.

for the Florida legislature, offered perhaps the best description of the forced deposit system when he told the Florida ?bday newspaper, “It has been called the most expensive and least effective litter tax in history.”66 When the true costs of forced deposits are understood, taxpayers are added to a growing list of forced deposit losers.

Alex Sokolik, a staff analyst

62 New Hampshire’s Solid Waste Management Problem, Starr F. Schlobohm, Ph.D., January, 1983. 63 “Paying the Price,” The Dallas Morning News, September 11, 1983.

fi4 “Plan to Shut Factory,” The New York Time:. November 14, 1984. 65 New Haven Register, January 10, 1981. fifi “Bottle Bill Well Meaning, But Not Truly WOI Its Cost;’ Florida Tvday (Cocoa, Florida), February 19, 1987.

15

Forced Deposits.. . Voluntary Recycling Crippled 2 The Environmental Each year in the United

Losers

16

States, the independent recycling industry recovers some 110 billion pounds of scrap metal, glass, plastics, paper, textiles and rubber. The industry is estimated to have an annual sales volume of more than $15 billion. Recycled metals account for some $13 billion of total sales. The profits produced by recycled metals allow independent recyclers to process lower profit items such as paper,67 for which the secondary markets are not as strong. Individual consumers benefit from voluntary recycling, too. In 1987, Americans recycled a record 36.5 billion aluminum beverage cans and received $400 million for their efforts. 1.1 billion plastic beverage containers were also recycled by consumers during 1987.68

Bottle bill advocates claim that forced deposits promote recycling. Yet, one of the leading groups opposed to forced deposits is the voluntary recycling industry. The reason is simple.

beverage container scrap away from independent recycling centers to retailers and wholesalers. With the loss of high- profit container material, multi- product recyclers no longer can afford to process low-profit items. They are forced to shut down.

This phenomenon has not gone unnoticed by environmental experts. The Kingston, New York, Daily Freeman reported that Robert Henderson, a recycling expert with the State

n----:+ 1 __._ A ; ~ , ~ & . , , , l I l n h l ~ utfpumb i a v v n U I V G L ~ V ~ L U - W L ~

67 Recycling Resources: Priorities for the 1980s, National Association of Recycling Industries, Inc., 1984. 68 Can Manufacturers Institute, The Society of the Plastics Industry, Inc., 1988. 68 “Bottle Bill Botched, Woodstockers Told,” Daily Freeman (New York), March 23, 1984.

Department of Conservation,, “surprised an audience of Wc stock residents by denouncinL the so-called Bottle Bill as a failure and claiming it actualll deters recycling. Henderson insisted the bill has been a disaster statewide.”69

Two months after the New York bottle law became effec: tive, The Oneonta Daily Star. reported that city and town officials would attempt to provide up to $10,000 to rex: the area’s glass recycling program.7o A faculty sponsor. with the Greenwich, New Yo) high school recycling program told the Greenwich Journal, “Before the law took effect, approximately 20 barrels of g were recycled (by students) in one day. That amount has dropped to 2 to 15 barrels.”71L

Other state and local comm nities fear what a deposit law would do to their voluntary recycling programs. Organiza. tions such as the District of Columbia’s Litter and Solid Waste Reduction Commissiom which plans for resource recovery and litter reduction1 through neighborhood cleann programs and education, woii have been shut down had D.(( deposit law been passed. According to a Howard University study, D.C.’s bottle bill “would conflict with the> initiatives because a deposit would divert valuable bevera container scrap away from tli buy back recycling centers tc retailers and wholesalers.”72

Independent recyclers, sm& and large alike, find their businesses devastated by t h e forced deposit system. The h York deposit law forced

70 Oneonta Daily Star (New York), Novembeii 1983. 71 Greenwich Journal (New York), Decemberr 1983. 72 A Cost Benefit Analysis of Beverage Depos Laws and the District of Columbia’s Propose? Initiative 28, Howard University, Lenneal J. Henderson, September, 1988.

Reynolds Aluminum Recycling Company to close all of its public recycling centers in September 1983. Company officials said that under the container law, public recycling was no longer feasible.73 The eradication of multi-product independent recyclers in bottle law states has resulted in less recycling of non-container material, proving once again that under forced deposits there are no winners.

WATER WASTED Deposit law supporters see

bottle bills as a way to force consumem to purchase beverages in refillable bottles rather than non-refillable containers. While this sounds good in theory, it does not work in prac- tice. Refillables must be cleaned and sterilized each time they cycle through the beverage distribution system. The Mid- west Research Institute reports that processing a refillable bottle requires 15 times as much water as filling a traditional one- way container. 74

Western states are particularly vulnerable to water supply shortfalls. A study conducted at the Chapman College Center for Economic Research measured the potential costs and benefits of enacting a California deposit law and found that forced deposits would result in a 152 percent increase in water usage. According to the study, under forced deposits “water use would increase from 664 to 1,671 million gallons in beverage filling operations.”76

Voters in Arizona and Colorado were sensitive to the effects a deposit law could have on statewide water use and, accordingly, rejected proposed container deposit initiatives by- large margins.

GAS GUZZLED Advocates of forced deposits

consistently promise legislators and voters significant energy savings under the container deposit system. Everyday experience with the system, however, suggests that the promise of energy savings must be viewed with some suspicion. The two-way distribution and retrieval process imposed on the beverage industry has actually proved to be a real gas guzzler.

Bottlers and distributors in deposit law states have been forced to use more and larger trucks to handle the huge volume of empty containers. In Michigan, gasoline and diesel fuel consumption increased by an average of 32 percent for soft drinks and 25 percent for beer during the first year of forced deposits. That means the Michi- gan beverage industry used 4,380,000 extra gallons of fuel in 1979, thanks to the bottle law. 76

Data collected by a large west coast soft drink company dem- onstrated that the company’s gasoline consumption doubled in Oregon after that state enacted mandatory deposits. In addition, the information reflects the actual experience of soft drink distribution operations in Oregon, and in the State of Washington, which has rejected forced deposits. The Washington distribution facility used 47.4 gallons of gasoline per 1,000

73 Hamilton County News (New York), October 12, 1983. 74 Water Use i n Beverage Filling Operations, Midwest Research Institute, November 2, 1981. 75 A n Economic Analysis of the Benefit and Costs of a California Deposit Law, Center for Economic Research, Chapman College, June, 1982.

packaged soft drink cases sold. The Oregon facility consumed 94 gallons for the same amount of product.77 (See Graph 7, page 19.)

Important research was conducted in California to measure the potential impact of forced deposits on energy consumption. The results were eye- opening. The researchers discovered that under a proposed deposit system, California bottlers and distributors would use an extra 17.1 million gallons of gasoline as a result of extra trips to collect empty container^.^^ Assuming that the average car gets about 20 miles to the gallon, and the average driver travels 10,000 miles per year, 17.1 million gallons would meet the annual fuel needs of some 34,000 drivers.

Mandatory deposit advocates claim that a shift to refillable containers means fewer one-way containers and reduced electricity and heating expenses in the manufacturing process. What often is not considered is the energy needed to produce bottle-washing equipment, the large number of bottles needed for a refillable system, and the extra hot water to clean refillables each time they are used.

to consider the type of energy sources tapped by the forced deposit system. The transportation phase of the system relies almost totally on petroleum. The container manufacturing phase uses several energy sources, including electricity generated by coal, nuclear and hydroelec- tric power. The United States controls 30 percent of the world’s coal supply, but must import nearly 50 percent of its petroleum. 79

Bottle s.uppoi“Lei-s aiso fail

76 Michigan Energy Study, Can Manufacturers Institute, 1979. 77 Gasoline Consumption, Mandatory Deposit Legislation, Pacific Coca-Cola Company, May, 1979.

78 Analysis of Cal$fornia Deposit Law, Cente Economic Research, June, 1982. 79 American Public Policy, Kenneth M. Dolbu McGraw-Hill Book Company, New York, 1982;

17

LITTER PROBLEM: UNSOLVED One of the driving forces

behind the deposit law crusade is litter. Bottle law advocates cite "litter reduction" as their primary goal. They promise consumers and legislators that forced deposits significantly reduce litter at little or no cost. They often promise budget- conscious legislators a sizeable reduction in litter cleanup expenditures as well.

While few would deny that litter is an important environmental concern, the forced deposits system has failed to produce significant reductions in total litter or reduce litter cleanup costs.

The Rockefeller Institute study, commissioned by the State of New York, found that under the New York deposit law, the change in total litter has been ''statistically insignificant' ' and the "savings to the state were negligible." The Rockefeller Institute estimated that during June-August 1984, the statewide redemption rate for soft drink containers was about 71 percent and 86 percent for beer containers.sO Thus, some 574 million containers were not returned.s1

The reason the New York deposit law has failed io achieve the primary goal of its supporters is quite simple. Beer and soft drink containers represent only a fraction of the total litter problem. A nationwide study of litter composition revealed that beverage-related litter accounts for little more than 10 percent of total urban litter and no more than 20 percent of litter in rural areass2

In a nutshell, New York consumers have spent more than $600 million to launch a partial solution to their litter problem-a problem that could be eliminated if a mere fraction of that amount were put to

The New York Returnable Beverage Container

Ibid. Law (Rockefeller Report), March 1985.

82 A Nationwide Estimate of the Percentages of Beer and Soft Drink Containers in Littel; Institute for Applied Research, December 1983.

18

efficient use.83 According to the New York Department of Transportation, the state spent $2.6 million for litter cleanup in 1982.84 The following year, New Yorkers spent more than 230 times that amount under forced deposits, yet the impact on litter has been inconclusive!

In Michigan, another urban- industrial state with forced deposits, beer and soft drink containers made up only 7.2 percent of total litter before the state's bottle law took effect in December, 1978.85 Following the imposition of deposits, a special committee of the legislature found that while beverage litter was diminished, non-beverage litter increased 37 percent the first year and total litter may have increased by as much as 10 percent .86 Moreover, the promised reduction in litter cleanup costs failed to material- ize. The Michigan litter control budget actually increased by 30 percent two years after forced deposits became law.u7

In Maine, the State Depart- ment of Transportation studied its highway litter problem before and after the enactment of forced deposits. It discovered that after the Maine bottle law WCILL I l l L U el lCcL 111 l i l I 0 , 85 percent of roadside litter remained, and the amount grew to 90 percent of the pre-deposit total in 1979.88

The story is much the same in Oregon. Consumers and businesses spent millions of dollars with the expectation that the litter problem would vanish. An official government study found that roadside litter was cut by only 10.6 percent one year after container deposits were imposed.89 Another litter study comparing bottle bill Oregon litter with non-bottle bill Wash- ington litter concluded that "At

___-_ C L C - CC--C:- in70

83 Implications for New York City of New York State Beverage Container Deposit Legislation, The City of New York Department of Sanitation, February 1981. 84 New York Department of Transportation Analysis, June 29, 1983. 85 Michigan Litter: Aftel; Institute for Applied Research. 1980.

present, vehicle occupants in1 Washington encounter 27 per cent less litter than in Oregon on a basis of square feet of accumulated litter per averag mile driven. The comparison urban areas is even more sigr cant, averaging 52 percent less."90

With litter cleanup, the primary goal of bottle law adl cates, the facts have demon- strated once again that mandatory deposits have failed tc make significant progress in litter abatement.

SOLID WASTE Deposit law advocates poini

the solid waste crisis as anotli problem that demands the forced deposits solution. As w litter, solid waste consists of much more than beer and sofl drink containers. According tl,l report prepared for the US. Environmental Protection Agency by Franklin Associate Ltd., beverage waste accountt for only 4.5 percent of the so) waste problem. The same rep shows newspapers contributiii 7 percent of the total solid waste problem.g1 The federal Resource Conservation Comm tee spent two years studying

deposit law and found that it; would reduce the country's solid waste by no more than :: percent .92

A Howard University study, the side-effects of a Washingtt D.C., bottle bill confirms that I beverage containers contribull very little to D.C.'s solid waste problem. According to the researchers, "Metal beverage containers were between 1.7 and 2.8 percent of all waste a glass beverage containers wen between 5.4 and 6.3 percent all waste."93

nnccihln hnnnfitc nf 9 ngtinnoi y"""'"'Y "YllULl"" "1 u llu"l"l.ul

86 B i d . Highway Maintenance Division, Michigan

Department of Natural Resources, 1981. New Hampshire's Solid Waste Management

Problem, Starr F. Schlobohm, Ph.D., January, 1983.

Study of the Effectiveness of the Oregon Minimum Deposit Law, Applied Decision Syste for the State of Oregon, 1974.

In New York, the deposit law has induced a slight reduction in municipal solid waste. However, the Rockefeller Institute reports “the law has not resulted in substantive solid waste management cost savings, particularly in the areas of waste pick-up and transportation.” The Institute surveyed 16 solid waste management agencies in New York. Only one agency was able to cite a reduction in solid waste management costs resulting from the law.g4

that under forced deposits the total volume of solid waste would decline by 2 percent, resulting in a cost savings of approximately $38.8 million. The same research study that produced those figures predicted that with forced deposits, consumers would lose “an estimated value of 222 to 416 million dollars in consumer benefits.’ ’95

Michigan solid waste is estimated to have declined 4.5 percent as a result of mandatory deposits.g6 But at what price? According to Michigan food and beverage industry associations, the cost of implementing forced deposits amounted to $250 million in 1979 a l o r , ~ . ~ ~

Voluntary recycling programs have clearly been successful in reducing solid waste, especially when these efforts are supported by an active, environ- mentally-conscious local government. In 1986, the township of East Brunswick, New Jersey was credited with keeping more than 12.3 million pounds from being buried at the regional landfill through voluntary recycling. Township leaders estimated that the East Bruns- wick community was able to reduce their volume of garbage by 25 percent.gs

In California, it was estimated

Litter Reduction Effectiveness, Vol. 11, Daniel B.

Characterization of Municipal Solid Waste in Syrek, Institute for Applied Research.

The United States, 1960 to 2000, Franklin Associates, Ltd., July 11, 1986. 92 Choices for Conservation, Final Report of the Resource Conservation Committee, July, 1979.

93 A Cost/Benefit Analysis of Beverage Deposit Laws and the District of Columbia’s Proposed Initiative 28, Howard University, Lenneal J. Henderson, September 1987. 94 The New York Returnable Beverage Container Law (Rockefeller Report), March 1985. 95 Analysis of Calvornia Deposit Law, Center for Economic Research. June 1982.

O6 A California Bottle Bill, California Public Interest Research Group, Berkeley, 1980. 97 “The Impact of Michigan’s New Returnable Beverage Container Law,” Edward Deeb (speecll Associated Food Dealers of Michigan, May 19791

Newark Star-Ledger, September 25, 1987.

19

On September 12, 1983, New York became the ninth state to impose mandatory deposits on soft drink and malt beverage containers. Because New York is

Forced Deposits.. . The New York 3 Emerience

A. - the largest industrial state to have adopted a traditional “bottle bill,” its experience under forced deposits has been the subject of intense curiosity as well as numerous research studies and investigations by the news media.

More is known about the economic consequences in New York than in any other of the deposit law states. The facts show that New York’s deposit law has been an unmitigated disaster for consumers, skilled workers, the beverage and container industries and the state’s own treasury. To use the words of one New York columnist, “This is the most expensive, least efficient anti- litter tax in world history.”99

New York Deposit Law Legacy HIGH COSTS

the state-funded report by the Nelson A. Rockefeller Institute of Government, soft drink bottlers, brewers and beer distributors spent millions of dollars in the first year alone to implement the New York deposit law. At the same time, as was previously mentioned, the law’s container handling requirements

According to data contained in

cost the retail industry an a“ age of 2.6 cents per returneft container?OO Net handling eo) incurred by New York retail(( amounted to approximately million. lbgether, the beverz industry and retail industrie spent some $166 million to comply with the state’s man1 tory deposit policy during tkr law’s first year.

Even though the deposit 1:; has been in effect for five ycc its costs to the beverage and retail industries have contini to grow. In 1984, New York :: drink bottler costs under fon deposits were estimated to Yr $43.2 million (see ’kble 2 foil details). However, according; 1988 study by National Eco- nomic Research Associates, I1 the costs of implementing tYr returnable beverage containt law to New York soft drink U tlers amounted to $51.4 mill1 in 1985, $55.4 million in 198 and $56.1 million in 1987.101

expenses borne by industry been partially offset by reve earned from recycling and retained deposits, the depos; law has imposed sizeable COP on soft drink bottlers in New York. After offsetting the re: nues obtained from unredee deposits, recycling income ail interest income against depcc law costs, New York bottlers3 a net deposit law cost of apg imately $5.6 million during 1987?02

Soft drink bottlers are not, only ones damaged by the Nl

Although some of the

“The Bottle Bill and the Bottle Bull,” New York Daily News, September 7 , 1983. loo The New York Returnable Beverage Container Law (Rockefeller Report), March, 1985.

20

101 The Economic Effects of New York State’s Returnable Beverage Container Law, National Economic Research Associates, Inc., 1988. ln2 Ibid. ln3 Ibid.

~

I

lo4 Market Basket Surveys, New York City Department of Consumer Affairs, 1983. lo5 Can Manufacturers Institute, May-Novembi, 1983.

York deposit law. The glass industry has been forced to close plants and glass furnaces, leaving hundreds of skilled workers jobless. It is safe to conclude that the human and financial costs associated with deposit-induced cutbacks have been considerable.

While businesses and industry were spending millions to make the deposit system work, New York consumers were feeling the law’s impact where it hurts the most-in their pocketbooks. By the end of the first year under mandatory deposits, $302 million belonging to consumers had been side-tracked through the forced deposit labyrinth.lo3

HIGHER PRICES

confirmed what opponents of the New York bottle law predicted long before its enactment: Cost increases produced by the forced deposit system would result in higher beverage prices for New York consumers.

For example, the New York City Department of Consumer Affairs found that beer prices increased by an average of 20 percent after the New York deposit law took effect.lo4 Price surveys commissioned by the Can Manufacturers Institute, and conducted by an independent survey research firm, found that national brand beer prices for 12-ounce containers increased 16-18 percent during the same period!06 A study focusing on the economic impact of the law on soft drink

Numerous price surveys have

bottlers found khat list prices for canned soft drinks in upstate New York increased by 10 percent in the wake of forced deposits!06 Furthermm-e, it is important to note that these price increases do not include the added cost of the deposit.

These surveys, and other studies conducted following the enactment of the law, provide evidence supporting early news reports of dramatic deposit law increases. Five days after the forced deposit system took effect, The New York Times reported, “The biggest shock comes at the checkout counter:

The price of beer has risen substantially in many stores already-well above the cost of the five cent deposit-especially for the two largest selling brands.”lo7 New York consumers discovered early on that forced deposits cost more than the nickel they pay for each beverage container brought home from the store.

IO6 Economic Effects of the New York Returnable Container Law on Soft Drink Bottlers, Temple, Barker & Sloane, Inc., January 29, 1985. 107 “Beer Prices Soar Under New York Deposit Law,’’ The New York Times, September 17, 1983.

21

LOST SALES The New York deposit law has

unleashed destructive economic forces that have proved disas- trous for the state’s beverzge industry. Higher costs have led to higher prices which, in turn, have resulted in lost sales.

A study of the law’s impact on soft drink bottlers conducted by Temple, Barker & Sloane, Inc., found that “In the first year of the law, statewide soft drink sales dropped about 2.4 percent below their level of the prior year, representing an actual loss in contribution to bottlers’ fixed costs of about $7.5 million.”lo8

However, sales losses proved even more significant when measured against New York’s historical soft drink sales growth

growth was considered, the study concluded that at average retail prices, retail sales losses amounted to approximately $100 million!0s

Data collected by the New York State Department of b t i o n show that while beer sales plummeted during the first year of forced deposits, New Yorkers reduced their beer purchases by 320 million containers that year, a sizeable loss of sales by any measure!1°

t--n,l -F A II\-M---& T T T L - - 1--4 C I C I l U VI Lf p t x L c l L L . V V l l C l L l U > L

lo* Economic Effects, Temple, Barker & Sloane, Inc., January 1985.

22

The New York Returnable Beverage Container Law (Rockefeller Report), March 1985. 111 Economic Effects, Temple, Barker & Sloane, Inc., January 29, 1985.

LOST TAX REVENUES In addition to the costs

incurred by business and consumers, the New York treasury has experienced lo) under the forced deposit syr, Reduced soft drink and mall beverage sales have resultecc significant excise, sales and corporate income tax reveni losses for the state.

Temple, Barker & Sloane, estimates that New York’s treasury is losing approximz $5.7 million to $7.7 million year as a result of soft drinll sales declines linked to the mandatory deposit system. These projections include b+i sales and corporate income losses!ll New York has also forfeited more than $1.5 mii in malt beverage excise tax collections as a result of red beer sales. The state taxes k at a rate of 5.5 cents per g a Following enforcement of tll deposit law, beer sales declii by over 28 million gallons!123

In its final report to the Temporary State Commissio)~ Returnable Beverage Contaii the Rockefeller Institute concluded that the deposit 11 had failed to produce signifii c a t s2vings fer the state. TE report referred to any cost savings that may have accru as “minimal.”113 With depos; law tax revenue losses of up $9.2 million, the law’s impaic state finances has been decidedly negative.

112 The New York Returnable Beverage Contaii Law (Rockefeller Report), March, 1985. 113 Ibid.

LOST FUTURES The New York Deposit Law

has had a particularly devas- tating effect on the glass container industry. The deposit system has failed to produce a major package shift to refillable glass containers. According to the Rockefeller Institute, “refillable containers may show little growth under the law.”l14

The major package shift resulting from mandatory deposits has been away from glass and toward lighter packaging such as metal and plastic containers. As a result, the employment futures of hundreds of skilled workers have been destroyed. In New York, it is estimated that some 1,000 container industry jobs have been lost since the deposit law took effect?16 The Glass Packag- ing Institute estimates that nationwide, 20,000 skilled workers have lost their jobs as a result of statewide deposit measures!l6

ties Metal Cans Refillables plastic Bottles G1

114 The New York Returnable Beverage Container Law (Rockefeller Report), March, 1985.

Forced Deposits: The Hidden Costs, Glass Packaging Institute, 1986.

h i d .

Soft drink sales losses cu malt beverage consump &clines produce luwe I I revenue losses that not u affect government pmgn but also t h taxpayw’s pocketbook.

Forced deposits produce dramatic shifts in the bevwage package mix. j j

New York, the glass container industry fell victim to the forced dep~’ system and several hum skilled workers lost theu jobs as a result.

23

Beverage containers are only a small part of total litter: mat’s why the forced deposit system cannot solve the total litter problem. I n New York, total litter actually increased after forced deposits became law according to a staterfunded report by the Rockefeller Institute.

TOTAL LITTER REDUCTION INCONCLUSIVE

Litter reduction is perhaps single most important goal off citizens and legislators who support bottle bills. No one lii unsightly litter. Few would du that littering is an offense against the environment. Ma. would pay to remove it. The issue is not whether litter reduction is a worthwhile goii Instead, the question is whett the price paid by consumers , , industry under the New Yorkc deposit law has been justifiecc a significant reduction in lith The answer is no.

The Rockefeller Institute conducted a post-law compan tive study of New York and Pennsylvania litter and revie11 other litter studies performecr before and after the enactme of mandatory deposits. In its initial report, the Institute concluded that after a year’s I experience under forced depcc sits, changes in total litter WE found to be ‘‘inconclusive.”ll“

The Institute did measure ZE reduction in beverage contain litter. However, New York’s tc litter problem has not been solved by forced deposits. In repnrt tc! the stzte, the Instit!! acknowledged that even witR 70 percent decrease in contai litter, “the net effect on total1 litter in New York is very slig at best.”l18 In addition, the N York Times reported in 1987 that in New York City, where:

i 117 The New York Returnable Beverage Contaiii I Law (Rockefeller Report), March 1985. ~ 118 Ibid.

24

the streets are routinely graded for cleanliness, that when the grading system started in 1974, 76.6 percent of the streets studied were “acceptably clean.” In the month just past, 75.5 percent were acceptably clean?Ig

Thus, millions of dollars and hundreds of skilled jobs have been spent on a system incapable of producing its promised results.

NO SOLID WASTE MANAGEMENT SAVINGS

New York’s solid waste problems have received widespread attention lately, especially in the wake of the “garbage barge” that could never seem to get rid of the Town of Islip, Long Island’s refuse. The facts show that in New York, forced deposits have failed to deliver promised solid waste management savings that were purported to address problems such as the garbage barge.

The Rockefeller Institute’s findings are worth repeating. In its report to the state, the Institute found that while the deposit law has induced a reduction in municipal solid waste on the order of 3 percent t o 5 percent per month, “the law has not resulted in substantive solid waste management cost savings. . .”lZo

Again, the Institute surveyed 16 solid waste management agencies and only one agency was able to identify a tangible solid waste cost reduction linked to the mandatory deposit law?21

RECYCLING INDUSTRY JEOPARDIZED

Perhaps as disturbing as the law’s failure to reduce total litter, and produce solid waste cost savings, is the impact it has had on New York’s recycling industry.

Hints of a growing problem surfaced soon after the law took effect, Numerous news accounts documented instances of recycling center closings and of communities forced to subsidize recycling operations that had been profitable prior to the law. Recycling centers in the towns of Ogden and Bethlehem were early victims of a forced deposit side effect that few had predicted.

In Albany, an investigative reporter from The Knicker- bocker News published a story reporting that “the deposit law has created a glut of recyclable aluminum, glass and plastic. . .as a result, scrap prices have plummeted to a level that makes recycling far less attractive economically than it was prior to the law.”122

Researchers from the Rocke- feller Institute followed up on these disturbing news reports and concluded that the New York deposit law has resulted in “decreased demand and declining prices for glass cullet and heightened uncertainty over the capacity of the plastics market to absorb increasing

119 The New York Times, December 29, 1987. 120 The New York Returnable Beverage Container Law (Rockefeller Report), March 1985. 121 Ibid.

volumes of recycled beverage containers.”lZ3 It warned that the deposit law’s ability to fulfill its solid waste reduction objective “is exclusively linked to the health of the recycling markets.“lZ4 Furthermore, The New York Times estimates that New Yorkers are presently recycling an unimpressive 4 percent of the state’s trash?26

According to most reports, recycling markets in New York are showing symptoms of ill- health under the forced deposit system, proof once again that under forced deposits there are no winners.

lZ2 “Deposit Law Creates a Plastic Bottle Glut,” The Knickerbocker News, October 15, 1984.

123 New York Returnable Beverage Container E (Rockefeller Report), March, 1985. lz4 Ibid. 1Z5 The New York Times, May 15, 1988.

winning Alternatives to 4 Forced Deposits

126 Washington State’s Model Litter Control and Recycling Act, Some Facts, (law enacted in 1971). 127 American L i t t q Institute of Applied Research, 1986.

26

Anti-Littering And Recycling Laws

Litter and recycling laws have proven to be an effective alternative to forced deposits. They address the litter problem at its source by penalizing the litterer and boosting voluntary recycling efforts.

WASHINGTON Washington State’s Litter and

Recycling Control law has long served as an excellent model for other states. It was the first law of its kind enacted in the United States. While penalizing persons who litter, it promotes voluntary recycling. The Washington program is funded by a voluntary tax on industries that sell, manufacture or distribute products reasonably related to litter. The tax has only a minimal impact on businesses, amounting to about $150 for each $1 million in gross salesJZ6 And what’s more, neither Washington consumers nor the state government foot the bill for this successful program.

According to a study by the Institute of Applied Research, Washington’s litter reduction program has led to an 84 pe’“e1LL Ieuuc;LluIl Ul u ~ v ~ l a ~ c container litter since 1973?27 These results were achieved despite a 77.3 percent increase in Washington’s vehicular traffic since 1972, when the anti-litter law went into effect. The Washington State Department of Ecology reports, “Washington has earned these top ratings, for example, even though we have 65 percent more people than Oregon-all living in a land area 43 percent smaller.’ ’128

--A---&:-- -c L--7,..”‘.rr,.

m k e Our Picture: The Story of Washington’s Model Litter Control and Recycling Law, Washington State Department of Ecology, 1987. lZ9 Ibid.

Ibid.

~

Another study concluded tt motorists in Washington “encounter 27 percent less hi than in Oregon on a basis of accumulated litter per averab mile driven.”lZg

The state also operates twcc toll-free hotlines-one for lit law enforcement and the otlt for recycling information. M(c than 300,000 calls have beer made to the hotline since its: in t rodu~t ion?~~ There are ani estimated 1,000 recycling loa tions throughout Washingtor

VIRGINIA

became law in 1976 and has achieved significant litter reduction-nearly 80 perceni some areas?31 Voluntary recycling is the cornerstone 1 1

the state’s litter control program, which provides promotional support to soma 296 recycling centers.

The Virginia litter control program is funded by voluntl industry taxes. Approximate. $1.2 million is contributed annually by Virginia business The results have been dramz In one year alone, 23.1 millicc pounds of material were ree cled by Virginia consumersJ3

ine state has aiso iaurici~e “Operation Waste Watch,” at unique educational program1 designed to reduce littering. This program now operates ii percent of Virginia’s elemenu schools. More than a million children have been exposed the program’s anti-littering c u r r i c ~ l u m ? ~ ~

The Virginia Litter Controll

m.

131 “A Study of Program Organization and Accomplishments,” Virginia Division of Litter. Control, Appendix B, June, 1984. 132 Ibid. 133 An Idea Notebook for Elementary School Teachers on Litter Control, Virginia Division a Litter Control.

OHIO Since 1981, Ohio’s Division of

Litter Prevention and Recycling has provided financial and technical assistance to more than 300 communities throughout the state-assisting them in efforts to abate litter, promote recycling and stimulate community environmental awareness. In 1986, the Division supervised the recycling of more than 27 million pounds of aluminum, glass, cardboard, newsprint , plastic and Since 1981, the state-funded Division has awarded $49.6 million in recycling grants to 305 Ohio communities.‘35

A 1983 statewide study showed a significant decrease in roadside litter since the program started. The number of metal objects in Ohio litter dropped from 317 items per mile in 1981 to 209 items per mile in 1983?36

Since the onset of the program, over 147 million pounds of recyclable material have been reclaimed in the Division’s 324 centers.

NEBRASKA

Recycling Act funds public education programs that encourage voluntary recyciing. The Act also promotes the enforcement of anti-littering laws and provides grants and technical assistance to organizations and communities involved in recycling and litter cleanup programs. For example, the Nebraska State Recycling Association recently began a toll-free hotline that provides callers with general recycling information.

Nebraska’s Litter Control and

Some 125 recycling centers currently operate in Nebraska. The Nebraska State Recycling Association estimates that in 1987, Nebraskans were paid $8.8 million for 120,000 tons of recyclable material. And what’s more, the Association estimates that Nebraska’s recycling program generated $58 million in economic growth for the state in 1987. The Nebraska program is funded by fees paid by state i n d ~ s t r i e s ? ~ ~

TENNESSEE The lknnessee Safe Growth

Plan for the 1980s is a statewide litter control and recycling program funded by self-imposed taxes paid by the malt beverage and soft drink industries. The program focuses on long-term solutions to litter and solid waste problems, and promotes recycling and litter cleanup activities through public education and funding of community litter abatement programs.

The Committee For A Clean Tennessee, C-FACT, a statewide association of businesses and individuals dedicated to comprehensive litter control, works closely with the state in promoting voluntary recycling aiid the adoption of anti- littering programs at the community level. Tennessee now has about 115 recycling centers and a toll-free recycling hotline.

NEW JERSEY In New Jersey, the Office of

Recycling operates a statewide program with a strong multi- material recycling focus. With grant monies in excess of $2 million a year, the New Jersey program supports more than 500 recycling centers operated by some 567 New Jersey muni- cipalities. In 1988, the Office of Recycling also launched its Clean Community program, a locally-based and -implemented litter pickup and public education campaign, funded by $13 million in grants distributed to each New Jersey county?3s

Anti-litter and recycling law- based programs are also in place in Hawaii, Louisiana and Mississippi.

134 Mary Wiard, Chief of the Ohio Division of Litter Prevention and Recycling, July, 1988 136 Ibid.

136 1983 Ohio Statewide Litter Study, December, 1983

i 137 Nebraska State Recycling Association, July ~ 1988 I

138 State of New Jersey Department of I Environmental Protection, Division of Recyclim

August, 1988.

I 1

I I

I , I

i 27

Beverage or Business Industry Recycling Programs (BIRPs)

Beverage Industry Recycling Programs are an environmental success story that shows how businessmen, consumers and community leaders can voluntarily work together to solve litter and solid waste problems. Designed to support and expand existing statewide voluntary recycling efforts, BIRPs are a successful industry-sponsored alternative to government- imposed forced deposits.

BIRPs or similarly structured organizations are now operating in Florida, Kansas, Kentucky, Maryland, Minnesota, Colorado, New Mexico, Ohio, Oklahoma and West Virginia. In most states, BIRPs provide marketing and administrative support to independently-owned recycling centers.

KENTUCKY

important chapter in the BIRP success story. Since 1980, when Kentucky BIRP was founded, its 36 independently-owned recycling centers have paid Kentuckians $39.7 million for their recyclables and have contributed an overall economic impact of $140 million!39

In 1987 alone, Kentucky BIRP recycled more than 55 million pounds of material.

MARYLAND

its doors in 1984, Marylanders have been paid about $15 million for their recyclables. In 1987 alone, Marylanders were paid $4 million for 26 million

Kentucky represents an

Since Maryland BIRP opened

139 Walter.Anderson, Executive Director, Kentucky BIRP, July, 1988. I4O David Marble, Executive Director, Maryland BIRP, July, 1988.

28

pounds of recyclable aluminum, glass and newsprint. Maryland BIRP has 130 affiliated recycling centers around the state?40

As part of its service to the community, Maryland BIRP operates an around-the-clock toll-free hotline that provides the locations and operating hours of nearby recycling centers.

OKLAHOMA

successful BIRP states in 1982. The Oklahoma BIRP network boasts 50 recycling centers, most of which buy back aluminum, glass, newspaper and other materials. Since 1982, the centers have paid more than $15.7 million to consumers for 225 million pounds of recyclable material!41

In an effort to address the total litter problem, Oklahoma BIRP has joined the state's Department of Education to launch an anti-littering campaign in the public elementary school system. In Oklahoma, recycling and public education are proving to be a winning combination in the battle against littering.

Oklahoma joined the ranks of

17 A h T 0 A 0 n t u y ofio

Launched in May 1983, Kansas BIRP has processed more than 26 million pounds of recyclable material and has paid out $3 million to Kansas BIRP operates 98 affiliated recycling centers and has won national awards for its adver- tising and public relations efforts in support of voluntary recycling. The program uses a cartoon character, Professor M.T. Glassen-Cans, to spread the word about winning with voluntary recycling.

l4I Ken Harwood, Executive Director, Oklahoma BIRP, July, 1988. 142 Chiquita Cornelius, Executive Director, Kansas BIRP, July, 1988.

143 Multi-Material Recycling Manual, Keep America Beautiful, 1987.

I

FLORIDA Florida's Business and Indt

try Recycling Program opena its doors in late 1984. Florid1 BIRP boasts 215 affiliated recycling centers, most of wr collect aluminum, glass, new paper, bi-metal cans and pla (HDPE and PET containers))

In 1987, Florida BIRP reac new recycling highs. By wei;; recycling levels were up 7.5 percent for aluminum cans, percent for glass bottles and and 10 percent for newspapi' over 1986 records.

Florida BIRP raises public, awareness of its affiliated recycling centers through pu service announcements andl speakers bureau.

The Keep America Beautiful System

The Keep America Beautiii System (KAB), originally knt as the Clean Community System, is a national litter control program that seeks I1 make littering socially unacceptable in our society.. program also promotes multt material recycling, organizeE litter cleanup activities, andl supports the strengthening :: eI,f"rcemen~ of comi-n-ui-,~~y- litter laws.

The KAB system operates; more than 400 cities and counties in 40 states. Georgii Louisiana, West Virginia, Virginia, Kentucky, Arizona1 Nebraska and North Carolini have adopted the system statewide.

long-term litter abatement benefits. Litter in KAB

The KAB approach product

communities has been reduced by as much as 80 percent-and has been sustained at these high levels for as long as six years?43

A 1986 study by the American Public Works Association concluded that for every municipal dollar invested in the KAB system, cities gained $2 to $36 in overall benefits due to budget reductions, cost avoidance, revenue from recovered materials and the value of volunteer time, and goods and services?44

In another 1986 survey of KAB programs in communities with populations between 3,000 to 500,000, 85 percent of the responding cities were actively promoting recycling. Of KAB systems currently involved with recycling programs, one-fourth reported receiving income for their efforts. These funds are used for community awareness efforts to promote the benefits of recycling?46

With KAB’s support, one Georgia county saved $1.1 million converting to curbside and once-a-week garbage collection?46 The Georgia Clean and Beautiful program, launched in 1978, is evidence that the KAB philosophy works. The Georgia program started with just nine participating communities and now operates in 48 c0mmunities?4~

Combined with voluntary recycling, the Keep America Beautiful System is an important player in the war against littering. The system has demon- strated time and again that American communities can be clean without over-burdening local government budgets and consumer pocketbooks.

146 Cost Benefit Analysis of Selected CCS Cities, American Public Works Association, 1982. 147 Georgia Clean and Beautiful, updated statistics shared by headquarters, July, 1988.

144 Cost Benefit Analysis of Selected CCS Cities, American Public Works Association, 1986. 146 Multi-Material Recycling Manual, Keep America Beautiful, 1987.

148 Promoting Recycling to the Public, NSDA revision, 1988.

Other Statewide Voluntary Recycling Programs

In addition to the BIRP and Keep America Beautiful programs, there are a number of other statewide organizations that promote voluntary recycling. These industry- sponsored programs, which resemble BIRP in structure, if not in name, are in place in 11 other states.

COLORADO In Colorado, when consumers

are asked about litter control, they’re likely to say. . .RECYCLE NOW! A statewide non-profit organization, Recycle Now! is dedicated to promoting voluntary recycling and

educating Coloradans about the environmental and economic benefits of recycling.

Recycle Now! publishes an annual directory listing some 400 recycling centers in Colorado. It also operates a toll- free hotline providing consumers with locations of recycling centers throughout the state.

Since its creation in 1983, Recycle Now! has produced significant results. The organization has paid Coloradans more than $25 million for 200 million pounds of beverage c ~ n t a i n e r s ? ~ ~

Voluntary recycling pro- g r a m produce winning results at 120 cost to the c o ~ m I n fact, the recycling industry pays or millions of dollars each ye to co72sume~s who voluntarily recycle aluminum and steel beverage cans, gll bottles and jars, plastic containers and old uewspapm I n 1987, US. colzsullzers earned a whop) ping $400 mill ion f o r recycling a luminum beven age cans alone, according the Can Manufacturers Institute. Voluntary recycling p r o g r a m in states highlighted in this sectioru annually recycle some 942 million pounds of materia

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CURBSIDE RECYCLING PROGRAMS AND SOURCE SEPARATION: THE WAY OF THE FUTURE

A number of states and localities are turning to “curbside” recycling and “source” separation programs in an effort to promote recycling and reduce the volume of trash that must be burned or landfilled.

A curbside recycling program is one that schedules pickup of pre- sorted recyclable waste from residential curbsides, either voluntarily or by mandate. Source separation is the simple process of organizing recyclables by material (ag., glass, paper, aluminum, plastic) for pickup.

Once materials are collected, they are transported to recycling centers and eventually arrive at packaging manufacturing facilities for final processing.

separating trash is easy-it takes Studies have shown that

Comprehensive Curbside Recycling, Glass Packaging

fbid.

I I I i

Institute, 1988.

I

only about fifteen minutes a week. According to the Glass Packaging Institute, “If adopted nationwide, curbside recycling could reduce the solid waste stream by at least 15 to 25 percent?49

Successful curbside recycling programs are now in effect in nearly 600 US. cities.150 And with the onset of mandatory recycling laws in states such as New Jersey, Pennsylvania, Rhode Island and Connecticut, the popularity of curbside programs is likely to grow- Curbside program participation varies from place to place, but generally ranges between 10 and 90 percent of households monthly?51 A study on curbside programs in Illinois showed impressive participation rates of 65 percent in Champaign and 40 percent in Urbana?52

Most curbside programs are funded by grants from state and regional governments. In certain

cases, such as in New Jersey, communities are reimbursed fiC their curbside efforts based on recovery volume of recyclable materials. In Minnesota, the stl beverage industry works with ii collection organization, Super Cycle, which services 350,OOa households in the Minneapolis Paul area?53

MINNESOTA Recycle Minnesota Resourcc

is an eight-year-old corporatt associated with the state’s beverage industry that boasil affiliated recycling centers statewide. The program open a toll-free hotline and has px consumers $7.5 million for 7i million pounds of recyclable: material since opening. R e c ~ Minnesota Resources estimal that 62 percent of the beverc containers sold in the State 10,000 Lakes are recycled OH refilled !54

In addition to Recycle Mini sota Resources, Minnesota a:‘ has a successful curbside collection program. The maii collection organization, Supci Cycle, estimates that it has 350,000 households within ii pickup range in the Minnea-- polis-St. Paul area alone. The' two year old Super Cycle estimates that curbside collection programs will be ablu reach as many as 500,000 Minnesota homes in 1989!55’

Other successful industry- sponsored recycling program are in place in Alabama, Delaware, Hawaii, Louisiana North Carolina, Pennsylvanii Montana and Wisconsin.

154 Peggy Wander, Recycle Minnesota Resour

155 John Luoma, Executive Vice-president, II Cycle, August, 1988.

~ July, 1988.

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Summary The soft drink industry

opposes mandatory deposit legislation because ‘‘bottle bills” are an ineffective, outdated and terribly simplistic way to approach a complex issue: litter and solid waste reduction.

UNDER FORCED DEPOSITS, EVERYBODY LOSES:

Consumers lose because beverage prices shoot up and they are inconvenienced when forced to comply with bottle bill requirements;

Laborers lose their jobs due to decreased demand for certain packages;

Businesses lose because of decreased sales-consumers don’t want to pay high prices for beverages and either stop buying or travel across state lines for their beverages;

lhxpayers lose because declining sales ultimately mean less money for the state-money that some legislators look to find elsewhere.

The environment loses because voluntary recycling efforts are crippled-bottle bills divert valuable scrap away from independent recycling centers to retailers and whn!eca!ers.

The New York bottle bill experience best demonstrates the shortcomings of the bottle bill.

FORCED DEPOSITS FAIL TO DELIVER WHAT THEY PROMISE:

Bottle bills have failed to significantly reduce litter, largely because beverage containers are only a fraction of the problem;

Solid waste is not reduced- state’s have been spending a lot of money for minimal gains.

THERE ARE A NUMBER OF SUCCESSFUL, PROVEN ALTERNATIVES TO FORCED DEPOSITS:

Anti-littering and recycling laws, which have had a major environmental impact in Wash- ington, Virginia, Ohio, Nebraska, lknnessee and New Jersey; 9 Beverage Industry Recycling Programs (BIRB) have been effective forces in voluntary recycling in states including Florida, Kansas, Kentucky, Maryland, New Mexico, Ohio, Oklahoma and West Virginia;

Keep America Beautayul Systems have granted localities in numerous states grants to promote recycling and litter control;

Other industry sponsored recycling programs have made important contributions to litter abatement, including programs in Colorado, Minnesota, Alabama, Delaware, Hawaii, Louisiana, North Carolina, Pennsylvania, Montana and Wisconsin.

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Forced Deposit Laws - There Are No Winnerspercent of litter in rural areas2 1 Franklin Associates...

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