Iowa’s 5-cent bottle deposit law, or “bottle bill,” has been in the news a lot, lately. Legislators have proposed different ideas on how to update the bottle bill for the 21st century. As a redemption center owner, I appreciate that they’re trying to help small businesses like mine. But one bill stands heads above the rest — House File 181.
Proposed by Rep. Andy McKean from Anamosa, this bill would expand the deposit to water bottles, sports drinks, tea, and coffee beverages. It would also double the handling fee paid to redemption centers from 1 cent per container to 2 cents. (Not many outside my industry have heard about the handling fee. Basically, it keeps redemption centers in business.)
Forty years ago, Gov. Bob Ray signed the bottle bill into law, which put a 5-cent deposit on carbonated and alcoholic beverages. It also required that beverage distributors pay redemption centers one cent for every can and bottle we processed. The idea behind the bottle bill was to clean up litter along roads, ditches, and waterways, and to encourage recycling. It worked, and still is extremely popular statewide.
However, just about every year since then, retailers and pop distributors push for repeal. The retailers don’t want to accept returns — even if customers bought the beverages in their stores. And distributors don’t like paying redemption centers the penny for every can we accept — even though they get to keep every nickel deposit that goes unclaimed. They’re making millions of dollars every year on unclaimed deposits.
So we’ve got an annual tradition now: redemption center owners and bottle bill opponents go round and round at the Statehouse, and nothing changes. In the past, that was OK for redemption centers. But after a while, the status quo stopped being good enough. Iowa went from having more than 300 redemption centers to less than 80. When my father started in this business 21 years ago, it was so profitable we wound up opening four Can City centers. Since then, we’ve had to close half of them.
So what gives? The economy.
The cost of living in Iowa has gone up tremendously since 1978, but our handling fee has stayed the same. Recently, Iowa State University economist Dermot Hayes, testifying in front of House and Senate committees, said the biggest mistake the Legislature made was not tying the deposit and handling fee to inflation. If they had, the deposit would be 17 cents, and businesses like mine would be getting three cents per container!
Right now, redemption center owners cannot afford the overhead it costs to stay in business. And it’s next to impossible to start a new redemption center, because you just can’t turn a profit on a penny per can. Most new centers close within months. I myself have lost good employees because I cannot afford to pay them more. Raising the handling fee and adding new deposit containers would allow me and others the opportunity to pay our workers more, open more centers, and ultimately create jobs.
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Some other proposals floating around the Statehouse right now would split the difference between redemption centers and retailers, by allowing grocery stores to opt-out of accepting cans and bottles. On the surface, that seems like a good compromise, but unfortunately doing that would just make a bad situation worse. If you’re living in a city, that’s OK. You probably already have a redemption center nearby.
But for rural Iowans … not so much. If you’re opening a center in a town of 2,000 people and the next biggest town is a 45 minutes down the road, there just aren’t enough cans and bottles in the area to make your business profitable. That’s why return to retail matters, because it’s fair to consumers. If you pay a nickel deposit, you should be able to get it back without taking a hit on gas money. Removing can and bottle return to retail would essentially sunset the bottle bill as we know it today.
Redemption centers need HF 181, and so do Iowans who enjoy seeing roads, ditches and waterways free of bottles and cans. The bottle bill idea isn’t obsolete, it needs updating.
• Mary Ann Renner and owns Can City redemption centers in Maquoketa and Tipton.