Tax vs. fee at issue in Denver bag-ban proposal

By Jeremy Carroll
Assistant Managing Editor

Published: August 23, 2013 2:40 pm ET
Updated: August 23, 2013 2:43 pm ET

Related to this story

Topics Packaging, Public Policy, Film & Sheet, Government & Legislation, Grocery bags

While officials in Denver are expected to debate the merits of a plastic and paper bag fee in early September, opponents of the measure say the fee isn’t a fee at all.

Instead they say it’s a tax.

While sometimes the discussion around bag fees or taxes is one of semantics, the distinction is actually a very important one in Colorado, where a state constitutional amendment forces an election on any potential tax increase. But if the measure is labeled a fee, no vote is needed.

“The state and local governments have taken that fee loophole and just run amok with it,” said Jim Manley, staff attorney with the Mountain States Legal Foundation. “Instead of structuring fees for service, they just label stuff a fee and figure that’s good enough to avoid the voter approval requirements of [the Taxpayers Bill of Rights].”

The Mountain States Legal Foundation is currently suing Aspen, Colo., for a bag fee the city passed in 2011. That ordinance bans plastic bags, but puts a 20-cent fee on all paper bags distributed at grocery stores in the city.

“Whatever the judge decides in the Aspen case is going to be directly relevant to Denver,” Manley said. “If we’re successful in Aspen, then Denver is going to have to step back and take another look at what they’re planning on doing.”

Denver’s city attorney did not return a phone call seeking comment on the issue, but officials did meet in closed session to discuss the legality of the measure.

Council member Debbie Ortega has pushed the measure forward, introducing it in July. According to city documents, there are an estimated 130 million single-use shopping bags used at Denver’s large grocery and convenience stores annually. Those bags turn into 4.3 tons of waste.

The 5-cent fee will be split between the city and the store handing out and charging for the bag, according to the proposal. The city would take 3 cents of the charge and the remaining 2 cents would be given to the stores to help pay for the record-keeping and maintenance of the program.

The city estimates it will earn $1.6 million in revenue from the measure, which it will use for education and reusable bags to be given to lower-income residents.

Ultimately, whether the measure is labeled a tax or a fee does not actually matter, said Phil Rozenski, policy chair for the American Progressive Bag Alliance. Rozenski also is director of sustainability and marketing for Hilex Poly Co. LLC of Harts¬ville, S.C.

“Whether it’s a tax or a fee, the impact is exactly the same,” he said. “It’s a regressive fee or tax on families. The lower the family income, the greater the impact. It will still take the same amount of money out of a family’s pocket whether it’s a tax or a fee.”

Denver’s proposal passed the city’s Health, Safety, Education and Services Committee on Aug. 20 and is expected before the full City Council in early September.

Meanwhile in California, two communities took on the issue of bag bans. Lawmakers in Los Gatos, located just south of San Jose, voted to ban plastic bags while lawmakers in El Cerrito, near Oakland, took a step toward banning plastic bags and polystyrene foam containers.

Los Gatos City Council voted 4-1 to pass a ban on plastic bags and a fee of 10 cents on paper bags to begin in early 2014.

The bans in El Cerrito passed unanimously on first reading, and a final vote will take place Sept. 17, El Cerrito clerk Cheryl Morse told Plastics News.

The debate over plastics bags goes back to 2011 in El Cerrito, with officials approving a plan for a more regional approach to the issue. The City Council took the issue up again after the West Contra Costa Integrated Waste Management Authority adopted a model ordinance for communities to pass and concluded an environmental impact report.

The ban extends to all retail establishments except restaurants and nonprofit resale shops. The ordinance would also charge customers 5 cents for paper bags until 2016, when that fee rises to 10 cents per paper bag.

The polystyrene ban would restrict food establishments from giving customers takeout food in disposable PS. It would then force those establishments to use compostable, recyclable or reusable food containers. The ban would become effective Jan. 1 and enforceable July 1.

With the California state bill banning plastic bags stalling earlier this year, officials with the Californians Against Waste are encouraging more local ordinances.


Comments

Tax vs. fee at issue in Denver bag-ban proposal

By Jeremy Carroll
Assistant Managing Editor

Published: August 23, 2013 2:40 pm ET
Updated: August 23, 2013 2:43 pm ET

Post Your Comments


Back to story


More stories

Image

Alex Brands buys iconic Shrinky Dinks toys

December 19, 2014 3:15 pm ET

First Slinky, now Shrinky Dinks. What will toy and games investment firm Alex Brands buy next?    More

Image

Judge limits scope of jury verdict against JM Eagle

December 19, 2014 2:30 pm ET

A federal judge in Los Angeles said Dec. 18 that last year's jury verdict issued against J-M Manufacturing Co. — now JM Eagle — for...    More

Image

Amcor buys Chinese flexible packaging plant

December 18, 2014 1:47 pm ET

Australian-based global packaging company Amcor Ltd. is buying a Chinese flexible packaging business for 211 million RMB (US$31.4 million).    More

Image

Europe puts its 'Circular Economy' recycling effort on hold, for now

December 18, 2014 12:28 pm ET

The European Commission has withdrawn its Circular Economy initiative from its 2015 work program, and will instead replace it with “a new, more ...    More

Image

Bubbles add some flair to 'Plain Jane' PET bottles

December 17, 2014 1:05 pm ET

Ron Puvak and the folks over at Plastic Technologies Inc. see big things coming from some very tiny bubbles.    More

Market Reports

Flexible Packaging Trends in North America

Our latest RESEARCH report examines trends in FLEXIBLE PACKAGING impacting the North American market including a review of economic conditions, key drivers of growth, materials pricing, M&A activity, sustainability challenges and the outlook for 2015.

Learn more

Plastics in Brazil - State of the Industry Report

This in-depth report examines the Brazilian plastics industry from a historical and geographical context. Our analysts provide insight on economic trends and forecasts, growing manufacturing sectors that utilize plastics, private investment opportunities, market environment challenges, and innovations in R&D.

Data tables and charts on producer prices, trade, plastics production and end market indicators is also included.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events