CT News Junkie | OP-ED | Perverse Incentives Will Dog The Plastic Bag Tax

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OP-ED | Perverse Incentives Will Dog The Plastic Bag Tax

by | Apr 7, 2017 5:30am
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Posted to: Analysis, Business, Environment, Opinion, State Budget, Taxes

magnusdeepbelow via shutterstock

A plastic bag in the ocean


In their interminable quest for new revenue sources, lawmakers in recent years haven’t exactly found the Holy Grail. There is no great untapped source of revenue, as there was in 1991, when a certain governor discovered it was possible to tax income.

So they have looked for more sources — some big (casino gambling), some little (handbags costing more than $1,000). Now lawmakers have found another little one: those flimsy plastic bags you get at the supermarket.

The bags are the bane of environmentalists — and for good reason. They’re hard to recycle, they get stuck in trees, they litter the landscape and they’re deadly to the wildlife that have the misfortune of ingesting them. It’s estimated that Connecticut shoppers use up to 1 billion of them per year.

To show you how far we have come on this issue, it appears the debate has focused less on personal liberty and the appropriateness of the tax than it has on what happens to the revenue the tax would generate.

And perhaps that is to be expected. After all, we’ve lived with Connecticut’s bottle law since 1978, when members of the General Assembly were appalled at the state’s litter problem and wanted to do something positive for the environment. Thanks to WNPR’s Patrick Skahill, we now know that system is on the verge of collapse for a whole host of financial and logistical reasons.

But since there’s no deposit required to walk out of the Stop & Shop with a plastic bag, the entire program, if it’s passed and implemented, will be simpler than what guides the deposit-driven bottles-and-cans program. Indeed, that might be the very reason why the legislature is considering a tax on the bags and not a deposit.

Experience has shown us that not all recycling programs work as they were intended to. Besides, the tax is cleaner and more lucrative. The state can keep all of the revenue with no questions asked, whereas a bag deposit would entail the messy matter of compensating the retailers for their troubles.

My concern is that few consumers will be dissuaded by a mere nickel tax from going with plastic bags. The state estimates usage of the bags will be cut by 60 percent. That sounds wildly optimistic to me — at least in the short term. A nickel hasn’t deterred anyone from doing anything for at least 40 years. If plastic-bag consumption is only reduced only by, say 25 percent, then what will we have accomplished beyond collecting the $12 million to $16 million in annual revenues the Office of Fiscal Analysis optimistically estimates will be added to state coffers?

Indeed, it strikes me that the state’s motives are perverse. Lawmakers want us to use fewer plastic bags, but if we bend to their wishes, the state gets less revenue from the proposed tax. I’m reminded of the state urging us to buy fuel-efficient cars, even as bureaucrats in Hartford scratch their heads and wonder why gasoline-tax revenues are underperforming. And forget a statewide ban on the bags. There would be nothing in it for the state treasury.

Then there is the matter of deciding what to do with the revenue. Sen. Ted Kennedy Jr., D-Branford, has been a leader on this effort, working for the past three years on the plastic bag problem and the lack of funding for Connecticut parks. TK2, as he is sometimes known, likes the idea of steering the revenues from the bag tax toward the parks.

“The reality is our state parks are in crisis,” Kennedy said. “We are only one of a few states that rely exclusively on general fund revenue for our parks.”

The problem is that Kennedy’s colleagues in the General Assembly have a less-than-stellar record when it comes to using revenue set aside for specific purposes. The state’s Special Transportation Fund is a great example. It’s been routinely raided over the years by lawmakers.

Things got so bad in 2015 that Gov. Dannel P. Malloy channeled Al Gore and called for a constitutional amendment to create a so-called “lock-box” that would prevent the spending class at the Capitol from snatching the transportation money away to spend on favored constituents and pet projects.

Still, the bag-tax idea got bipartisan support, with Rep. Craig Miner, R-Litchfield, one of the more conservative members of the upper chamber, agreeing that using the revenue to fund state parks enables people to make a connection to the environment and that the tax would make an environmental policy statement.

The bill has been referred to the Finance, Revenue and Bonding Committee. Look for it to become law. Don’t be surprised if down the road, environmentally conscious consumers use far fewer plastic bags, lawmakers raid what remains of bag fund and officials wonder why there’s nothing left in it. It’s the order of the day in Connecticut.

Contributing op-ed columnist Terry Cowgill lives in Lakeville, blogs at ctdevilsadvocate.com and is managing editor of The Berkshire Edge in Great Barrington, Mass. Follow him on Twitter @terrycowgill.

DISCLAIMER: The views, opinions, positions, or strategies expressed by the author are theirs alone, and do not necessarily reflect the views, opinions, or positions of CTNewsJunkie.com.

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