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

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.


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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

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