The plastic bag industry may get some unexpected leverage in its battle to keep California communities from banning or taxing bags from the passage of Proposition 26 in the November election.
That measure which requires that any fees, levies, charges and taxes imposed by governments receive a two-thirds majority vote could be critical in many upcoming battles over plastic bags, such as in Los Angeles County, where the board of supervisors is moving forward with a long-delayed plan to ban plastic bags and to tax paper bags handed out at checkouts in unincorporated county areas.
The voters have clearly spoken in California that they are tired of getting hit with what amounts to consumer taxes thinly disguised as fees, said Tim Shestek, senior director of state affairs in California for the American Chemistry Council. Before attempting a vote, it is critical that the board carefully examines how Proposition 26 applies to the bag ordinance.
However, Gail Farber, director of public works for LA County in a letter she sent to the board of supervisors recommending they adopt the ban, effective July 1, 2011, at their Nov. 16 meeting said the fee on bags is not a tax.
The 10-cent charge for recyclable paper carryout bags is not a tax, Farber said in her letter to the supervisors. Taxes are imposed for general revenue purposes [and to] raise revenue to finance general government services and functions and are usually placed into a general fund to pay for a variety of public services.
In this case, no portion of the 10-cent charge is being remitted back to the county, she wrote. The charge is being retained by the affected stores to cover their reasonable costs of compliance with the ordinance [and] only applies if a customer chooses to use a recyclable paper carryout bag, and pay for that benefit or privilege.
Washington-based ACC disagrees.
The fact the stores collecting the fee do not remit it to the county does not appear sufficient to override the intent of Proposition 26, at least in part because the stores are required to act as an agent of the government to implement government policy, said Karyn Schmidt, assistant general counsel for the plastics division of the ACC, in a Nov. 11 letter to LA County.
The clear intention of Proposition 26, and the expressed will of California voters, is to limit the ability of state legislative entities to authorize additional financial burdens on state taxpayers, Schmidt said.
The proposed ordinance achieves exactly the same result as a tax. It involves state action to impose additional charges on consumers.
The proposed ban would prohibit grocery stores with $2 million or more in sales and retail stores with 10,000 square feet or more that have pharmacies from providing customers with singe-use carryout plastic bags and require that those stores charge customers 10 cents for each paper bag, starting July 1, 2011. The ban would go into effect at liquor stores, food marts and convenience stores Jan. 1, 2012.
The plastic bag ban would also apply to biodegradable and compostable plastic bags. The 10-cent fee for paper bags would be waived for people in the California Special Supplemental Food Program for Women, Infants, and Children or the state's Supplemental Food Program.
There are more consumer- and business-friendly ways of reducing bag litter and waste that do not raise grocery costs for families, put manufacturing jobs at risk or require more government bureaucracy, Shestek said.
In January 2008, the Los Angeles County Board of Supervisors said it would pursue a plastic bag ban if the state did not ban or tax plastic bags, and if the industry did not voluntarily reduce plastic bag use in the county 30 percent by July 1, 2010, and 65 percent by 2013.
In her letter to the board of supervisors, Farber stated that the recycling goals had not been met.
Stores in the county's unincorporated areas did not provide data that would enable the Public Works staff to determine if the voluntary program benchmark of 30 percent disposal reduction of plastic bags by July 1, 2010, was met, Farber said. In addition, throughout the course of the voluntary program, not more than eight stores at any given time had met the minimum participation levels.
Although the public education and outreach aspects of the voluntary program raised awareness of the impacts of single-use bags and the benefits of reusable bags, it could not be determined if this awareness translated into a shift in consumer behavior that was significant enough to address the major objectives of the county to reduce plastic bag use, Farber said.
Her letter estimated that the ban would reduce the use of plastic carryout bags in the county from about 1,600 per household in 2007 to fewer than 800 per household in 2013, downsize the number of plastic bags in landfills by 50 percent, and cut local costs for prevention, cleanup, and enforcement efforts to reduce litter by $4 million.
She also said the final environmental impact report conducted by the county concluded that a tax would not cause an adverse environmental impact.
The report also pointed to the effectiveness the proposed ban could have based on the significant reduction in use of plastic and paper carryout bags that has occurred in Washington, D.C., this past January the first month that the city's 5-cent fee on plastic and paper carryout bags went into effect.
The District of Columbia Office of Tax and Revenue estimated that affected establishments issued about 3.3 million bags in January 2010 a significant 86 percent decrease from the estimated 22.5 million bags [previously] issued per month, Farber said.