September 5, 2008

Commentary:

Time to Stuff the Bag Tax

By Jon Coupal

It’s the biggest tax hike you’ve never heard of. In a last ditch effort, California grocers, retailers and environmental groups are attempting to resurrect a fiscally reckless bill to impose a 25-cent tax on all paper and plastic bags Californians get at the grocery store. This bill could cost grocery shoppers billions a year — and come on top of already skyrocketing food, gasoline and energy prices.

When the original legislation imposing the tax, AB 2058, failed to pass through the Senate Appropriations Committee at the beginning of August over concerns about how much it would cost, an eclectic coalition of special interest groups joined together to get another bag tax bill introduced. The “gut-and-amend” bill is even worse because it would subject even paper bags to the list of items taxed.

For grocers and retailers, this new bill would allow them to charge you for your bags, while claiming the government is making them do it (think Cleavon Little holding a gun to his own head in the 1974 classic movie “Blazing Saddles”). The sad reality is this new bill, AB 2769 will only punish consumers and do very little to make the environment any cleaner here in California.

Grocery stores are set to pocket a staggering $150 to $200 million of those funds, grabbed directly from their own customers. So why are grocers so willing to throw their own customers under the bus?

While still a little unclear, it is troubling that the proposal envisions stores being able to recoup five or ten cents from each bag recovered.

But consumers still lose. According to the California Department of Finance, there is a “lack of accountability for the use of the [the balance of the] funds,” which is why the department has opposed this legislation. That’s a polite way to say we really don’t need a massive new state bureaucracy.

In any event, this proposed tax couldn’t come at a worst time. Grocery bills have increased over six percent from one year ago.

Prices for staples such as bread, milk, eggs and flour are rising sharply, surging in the past year with double-digit increases, according to the U.S. Labor Department. California families, already pinched by soaring grocery bills, may take another big hit to their household budgets if the California Legislature and Governor add an additional 1-cent per dollar sales tax increase to close this year’s state budget deficit — ignoring the deficit this action could cause in the monthly budgets of those families who can least afford it.

It should be no surprise that, according to a recent statewide poll, 58 percent of Californians were opposed to this new bag tax.

This legislation is not only harmful to Californians who will pay the additional taxes, but it is unnecessary. Paper bags can already be recycled along with other paper products. (My family takes all our paper bags to a food closet for the poor.) Mid-way through last year, California became the first state to mandate plastic bag recycling at large grocery stores. The year before, in 2006, over 800 million pounds of plastic bags and film were recycled — enough recycled material to build backyard decks for 1.5 million homes.

Even the bill’s author, Assemblyman Lloyd Levine of Woodland Hills, admits these efforts to increase recycling are working, reducing waste and increasing recycling.

The problem is, not everyone knows that grocery bags are fully recyclable. Many people don’t know how or where to recycle bags after a trip to the restaurant, dry cleaner, store or pharmacy. Just like with other recycling efforts, by educating the community and implementing a proactive recycling program, we can positively impact the environment without increasing consumer grocery costs.

If the intent of these groups is to genuinely protect consumers and the environment then they should focus their efforts on further enhancing and promoting California’s current recycling programs, rather than trying to pass huge tax increases that feather their own nests. It would be a winning situation for California families, businesses and the environment alike.

Jon Coupal is President of the Howard Jarvis Taxpayers Association

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