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Plan to break Iowa bottle bill logjam to get Senate hearing
Idea captures estimated $48M from unredeemed bottles
DES MOINES — Yet another attempt to break a years-old logjam that has prevented changes to Iowa’s four-decade-old bottle bill will get a hearing today.
“I didn't come to Des Moines to work on the bottle bill, but I'm tired of what I've called the Rube Goldberg fixes to this that fail every year,” Sen. Ken Rozenboom, R-Oskaloosa, said about his proposal, Senate File 2122, that will get a Natural Resources subcommittee hearing at noon.
First elected 10 years ago, Rozenboom says he’s watched a lot of attempts to improve on the bottle bill come and go. Based on comments he hears and polling, the bottle bill that requires customers pay a nickel deposit on carbonated beverage cans and bottles, which they get back when they return empties to stores or redemptions centers, remains popular with consumers. It’s not as popular with grocers, many who no longer accept empties for redemption.
A recent poll by Selzer & Co. found that 84 percent of Iowans say the bottle bill is good for Iowa and 61 percent say it should be expanded to include more beverage containers, such as water and energy drinks.
Some have called for doubling the deposit to a dime to increase the penny-per-can handling fee for redemption centers to 2 cents. Even that may not be enough to support redemption centers, especially in rural Iowa, according to Iowa State University economics professor Dermot Hayes, who has been analyzing the bottle bill for about 10 years.
“I think you're probably looking at 3 cents to cover all the costs,” Hayes said last week during a special edition of The Gazette’s Pints and Politics. Grocers and redemptions centers are getting a penny for doing 3 cents worth of work.
“I am amazed that we have any recycling centers at all,” Hayes said during the discussion hosted by the Johnson County League of Women Voters. “I would say that an urgent need is to get that rate up to at least 2 cents, but, hopefully, a lot more than — maybe as high as 3.”
At the moment, Troy Willard of the Can Shed in Cedar Rapids and neighboring communities, said the price of scrap aluminum is helping him meet overhead. According to Scrap Monster, aluminum cans are worth about 67 cents a pound. But Willard has seen the market much lower in his 25 years in the redemption business.
However, expanding the bottle bill to cover more containers and doubling the deposit are non-starters for Rozenboom.
“In my judgment, if you want to kill the bottle bill, that will probably be an effective way to do it,” he said. “We can have discussions in future years about adding different containers, non-carbonated drinks and that sort of thing, but until we recognize where the logjam is, in my view, we're not going to fix this.”
The logjam, according to Rozenboom, is capturing the estimated $48 million a year in unredeemed containers that the wholesalers hang onto. His bill would involve the state Department of Revenue and Alcoholic Beverages Divisions in redirecting the nickel wholesalers retain on unredeemed cans and bottles to the Taxpayer Relief Fund, which lawmakers created as a way to return surplus tax dollars to Iowans. The fund is estimated to be approaching $2 billion.
His plan has early support from Willard and Michelle Hurd of the Iowa Grocery Industry Association.
“We applaud Sen. Rozenboom and support his efforts,” she said. “I think it creates a more sustainable system for the future while recognizing the sanitation issue that we have with bringing the used cans and bottles back into grocery stores.”
However, wholesalers reject the idea that they’re blocking action on bottle bill legislation and called on grocers and other retailers to accept their responsibility in making the system work.
In a statement from the Iowa Wholesale Beer Distributors Association, they were critical of Rozenboom’s plan as an expansion of government that would eliminate nearly 200 jobs.
“Distributors believe there is a more equitable way to fix the bottle deposit law,” Executive Vice President David Adelman said in a statement. “All money in the system is reinvested into the process to find innovative solutions. Distributors are willing to invest more time and capital if they know the Legislature will allow the process to work.”
He went on to say that retailers “are turning customers away, making it harder to redeem and seem to be unwilling to participate in a fix. “
“We know the process needs to be reformed and are at the table willing to negotiate,” Adelman said.
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