Retailers push to bag a proposed fee
By Neal P. Goswami
Vermont Press Bureau | March 01,2014
MONTPELIER — A proposal to charge a 10 cent fee for plastic and paper bags distributed to shoppers is on a path to be drastically scaled back.
The Senate Natural Resources and Energy Committee heard from retailers and grocers Friday on the hardship the proposal would cause for smaller retailers that face challenges from online competitors and bordering states.
Committee members appeared Friday to be embracing a House proposal by Burlington Democratic Rep. Curt McCormack that would cut the fee in half.
Robert Hartwell, D-Bennington, the committee chairman, sponsored the legislation that would assess a 10 cent fee on all disposable shopping bags beginning in July 2015.
Retailers would retain 1 cent to help cover the administrative costs, and the remaining 9 cents would be sent monthly to the state Department of Taxes and deposited into the Waste Management Assistance Fund.
The bill would also prohibit anyone from “selling, distributing at wholesale, or distributing at retail a disposable carry-out bag made of plastic or paper unless the disposable carry-out bag can be recycled and meets content and label requirements.”
Marc Sherman, chairman of the Vermont Retail Association’s board of directors, told the committee Friday that the fee would hit visitors to Vermont the hardest.
“I feel that a tax on bags is going to really have an impact on our tourists,” he said. “They aren’t traveling with bags, and they won’t be able to opt out of it by having their own bag.”
And small retail shops, like his own Stowe Mercantile, that do not use a computerized point-of-sale system could face costly upgrades to calculate the new tax, Sherman said.
“I’ve avoided going to a point-of-sale system so far. That’s a $20,000 or $30,000 investment minimum,” he said. “A lot of retailers my size and under are still working on that old-style register.”
Sherman proposed a voluntary program where merchants would donate a nickel to a local charity if customers opt out of using a disposable bag. Such a program has already worked in some communities in Vermont, he said.
“That has a ‘wow’ factor for the guests,” Sherman said. “I would love to see Vermont retail and the grocers spearhead a program to make it voluntary.”
Jim Harrison, president of the Vermont Grocers’ Association, told lawmakers that retailers want to reduce the use of bags. The industry made receiving a bag with a purchase part of the shopping experience, but reducing the use of disposable bags is in their interest.
“Retailers have an incentive to help convert to the use of reusable bags,” he said. “Supply costs for paper, especially paper, but paper and plastic, is a major expense for the store. Additionally, it’s the right thing to do.”
Harrison said his group is looking to remain neutral on the legislation but that the idea of a new tax is alarming.
“We have a lot of members who are very concerned about adding a new tax or fee on their customers,” he said.
Sen. Diane Snelling, R-Chittenden, raised the possibility of banning plastic bags but allowing merchants to continue using paper. Harrison pushed back firmly, however, noting that paper bags require more energy to produce and deliver to stores than plastic, and are more expensive for retailers.
“Banning plastic bags and allowing the use of paper bags only would be the absolute worst possible outcome that this committee could come up with,” Harrison said. “If you’re going to do anything, you’ve got to treat them equally.”
Snelling also voiced support for the voluntary program sought by Sherman and Harrison to gauge its success before instituting a fee.
McCormack told the committee that such a voluntary measure would not go far enough. Instead, he pointed out the success of nickel fees in other areas, including Washington, D.C.
“One week after it was implemented usage went down 50 percent,” he said.
McCormack argued that a 5 cent fee rather than 10 cents is “politically easier” for lawmakers. He urged the panel to advance the 5 cent fee with an allowance for retailers to opt out if they can demonstrate a 65 percent reduction in the use of bags on their own.
Hartwell said he expects the committee to vote on the legislation after lawmakers return from a weeklong break for Town Meeting Day. The committee is likely to amend the bill and support a 5 cent fee, he said.