Bottle deposit reform could add $200 million to NY’s coffers
Governor Paterson and legislators in Albany are trying to reach compromises to close the yawning gap in New York’s budget. Although the proposal to sell wine in grocery stores is back on the table, there is another drinks-related area our officials have yet to uncork: bottle deposits.
Last year, a reform bottle bill passed–largely unnoticed–that included significant changes, notably extending the deposit to include water containers and sport drinks. Further, and more importantly, the system for unredeemed deposits was redirected to send 80% of those funds to the state’s Department of Finance; previously, unredeemed funds rested with the deposit initiators (often beer and soda distributors). This long-overdue reform will bring in an estimated $90 million this year to the state.
But at five cents per container, the deposit remains low, unchanged since the program started in 1982. During the first decade of the bottle bill, redemption rates hovered around 80%. As inflation has eroded the value of the deposit amount, the redemption rate has fallen (details in this pdf).
Raising the deposit rate to ten cents (about even with inflation) even twenty cents per container would have the effect of raising recycling rates and raising revenues for the state through unclaimed redemptions. In 2006 (before water and sport drink bottles were included), deposits collected totaled $289 million while $196 million were redeemed, a 67.8% rate. Doubling the per bottle deposit to 10 cents, would mean $600 million in deposits, while raising the rate to 20 cents would gross $1.2 billion. Even assuming that were to bring the redemption rate back to 80 percent, that would still result in an additional $96 million or $192 million in uncollected deposits for the states coffers. (Raising the state’s share of unredeemed deposits to 90% or higher, would boost state revenues even further.)
That’s a kind of win-win we don’t see too often in Albany. And one that legislators and the governor could proudly raise a glass to.
Related: “Should a bigger better bottle bill include wine bottle deposits?”
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On August 1st, 2010 at 3:10 pm ,bob bates wrote:
Why do we not tax bloggers for every mundane word they write – The best way to reduce budget deficits is to stop spending – between fees, taxes,mandated expenses anyone earning over $160,000 will pay over 50% of their income fo some govermentptogram.
Stop and think next there will be a fee on the amount of air breathe.
On August 1st, 2010 at 11:09 pm ,Cat X wrote:
This is a great idea! Washington state doesn’t have a deposit system and my neighborhood doesn’t even have glass recycling. A recent festival had a whole group of wineries just dumping their bottles. This is not a fee–it’s an incentive and it benefits people two ways: they get cash back if they recycle, and if they are too lazy to do it themselves, the state gets the unclaimed funds. Sounds win/win to me.
On August 6th, 2010 at 2:03 pm ,SOLVING BUDGET PROBLEMS WITH WINE wrote:
[...] means the state would have collected $74.4 million! And that’s for only a 5 cent deposit. Dr. Vino’s Wine Blog recommends raising that deposit to 10 or 20 cents with the possibility of adding up to $200 million [...]
On August 7th, 2010 at 10:38 am ,Jenny wrote:
Sounds like a plan that can go to other states as well and be beneficial for the environment.
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