Sacramento, Calif. — While sometimes it might seem that it's passion that drive politics, the truth is the real engine is money.
And in the case of the California bag ban, money is something of a double whammy: there are potentially millions at stake in fees for paper bags if SB 270 becomes law and millions more driving the debate on the referendum — not to mention the potential job and revenue loss for the industry if the state-wide bag ban stands.
Opponents of the plastic bag ban, led by the American Progressive Bag Alliance (APBA), already have spent $3.3 million since October 2014, according to state election filings. The bulk of the spending was in late 2014 as APBA attempted to drum up opposition to the bill in the California legislature, and then to gather signatures for the referendum to repeal the law.
The largest contributor to APBA's campaign, by far, is from Hartsville, S.C.-based Hilex Poly Co. LLC, a division of Novolex. The film and bag maker contributed more than $1.7 million last year and another $132,000 so far in 2015, for a total of $1.83 million in monetary and non-monetary contributions.
Novolex ranks No. 13 in Plastics News' most recent survey of North American film & sheet manufacturers, with estimated film sales of $600 million.
Hilex Poly is North America's largest T-shirt bag manufacturer, according to Plastics News estimates. The parent company also operates the world's largest plastic bag recycling facility, in North Vernon, Ind., and does an estimated overall $2 billion in annual sales across its 37 North American facilities. In June 2014, Novolex acquired Duro Bag Manufacturing Co., the world's largest paper bag maker.
In contrast, ban supporters have raised $232,000 over the past year, with the largest contributions from Sacramento-based environmental lobby shop Californians Against Waste (CAW) providing a little more than $86,000 and the California Grocers Association donating $100,000 in February, according to public campaign finance documents.
$55 million price tag?
While it may not seem like a level playing field, the finances must tip even more to the side of APBA if plastic bag supporters want to win next November, according to the latest analyst projections.
One group estimates the plastics industry will have to spend more than $55 million to get the results it wants at the ballot box next year.
According to the Forward Observer, a public affairs and research firm with offices in Washington D.C., and Sacramento, that's how much it will cost for the two ballot initiatives that the plastics industry has underway in California: one pushing for a “no” vote on SB 270, and another seeking a “yes” on the Environmental Fee Protection Act, which would redirect proposed fees on paper bags to environmental efforts, instead of to grocery stores.
“We estimated the 2016 ballot campaign budgets by averaging the successful major ballot committees over the past three election cycles. In total, out of 23 ‘big spender' ballot initiative campaigns in the past three cycles, 15 were successful — a success rate of 65 percent — spending an average of $29.8 million,” the group's Oct. 13 research brief says.
The $3.3 million already spent by the plastics industry would seem like a drop in the bucket compared to the $38.1 million Forward Observer estimates it will take to kill SB 270 with the referendum or the $17.2 million estimated cost of pushing the environmental fee initiative.
Though Forward Observer founder and CEO Joe Rodota is involved with the campaign to make the bag ban California law, he says the algorithm he's spent five years developing to predict how much industry has to spend to win a referendum in California is unbiased.
“These are the real numbers,” Rodota said. “These numbers track. … It's derived out of the history from everyone that has come before.”
Spending on the ballot initiatives is only half the equation. The other side is how much money is at stake for the grocery industry from 10 cent fees on paper bags that are mandated by the law.
The 10-cent fee is actually a minimum charge — individual stores will be able to charge whatever they want for a paper bag, as long as it is at least 10 cents each.
Major paper bag producers sell their wares for between 3 and 5 cents apiece, leaving a 5 to 8 cent per bag profit for grocers.
How much could that add up to? There are vastly conflicting estimates — there's disagreement about how many plastic bags are used each year in California, and how many paper bags will be used if plastic bags are banned. So the estimates range from $700,000 to $400 million, or more, per year.