The current side-door move to raise the handling fee for bottle redemption will tax small businesses in Massachusetts just as our economy is seeing the light of recovery.
And it will hit consumers in the wallet and pocketbook as costs are driven up on products they purchase every day.
The handling fee is what redemption centers are paid to process bottle and can returns as part of the outdated and inefficient Bottle Bill. The fact that repeated efforts to expand the Bottle Bill to additional beverage products have failed in the Legislature for nearly two decades is a strong indicator of the limited appetite to further subsidize this inefficient system of recycling.
It’s also a signal for what this initiative is really about: another tax by another name.
The Patrick administration wants to tax beer and beverage distributors with a larger handling fee – increasing it from 2.25 cents per container to 3.25 cents — and raise costs on consumers to reward the dwindling number of redemption centers in Massachusetts. But the priority isn’t really about more recycling. It’s about the unredeemed containers — on which the state keeps every 5 cent deposit.
The handling fee will raise costs for consumers and tax small businesses like the craft brewing industry, which has seen exponential growth over the past two years. Last year alone craft brewers contributed $535 million to the Massachusetts economy, but rather than encourage this type of economic expansion, the administration has chosen to penalize it by proposing a hidden tax that will only stunt its future growth.
Furthermore, the handling fee tax will also put good jobs at risk at a time when good jobs are what our economy needs most.
Maybe that’s why the Patrick Administration is attempting to raise the handling fee through a regulatory procedure, without going to voters or the legislators who represent them. Massachusetts consumers will have little voice in this process unless they start demanding to be heard.
The proposed 1 cent increase in the handling fee represents a staggering $14 million in transfer payments from bottlers and distributors to redemption centers. That tremendous cost burden will almost certainly raise the wholesale price of many beverages – and ultimately impact Massachusetts consumers.
Higher costs put jobs at risk, too. Beer distributors alone represent an important industry that provides thousands of quality jobs and already generates tens of millions in revenue to Massachusetts. The industry directly employs more than 1,700 people in Massachusetts, and supports another 3,200 jobs through induced spending, capital investment and indirect input. That amounts to nearly $370 million in annual wages and salaries and $200 million in state, local and federal taxes.
Gov. Patrick wants to portray the handling fee as an environmental initiative. But the truth is that burdening small businesses and consumers by raising the handling fee will not result in a single additional container being recycled.
Massachusetts consumers already have plenty of new taxes to brace for thanks to the Patrick Administration’s expansive and ambitious agenda for more spending. Isn’t $1.9 billion in additional income taxes and fees enough to ask from working families fighting their way toward economic recovery?
Those measures, at least, will get a debate in the light of day with the Legislature representing the interests of Massachusetts voters.
The side-door manner in which Gov. Patrick seeks to raise the handling fee for bottle redemption robs the public of the voice to which it is entitled — and that’s wrong.
John Stasiowski is executive director of the Beer Distributors of Massachusetts.