Testimony to Senate Environmental Conservation Committee
Expanded Bottle Bill

Presented by
Marcus Ferguson
Director of Government Affairs
March 4, 2009

Chairman Thompson and members of the Environment Committee, my name is Marcus Ferguson and I am the Director of Government Affairs at The Business Council of New York State. I am here on behalf of New York’s grocers and beverage companies.

With the significant economic slowdown adversely impacting both the private sector and government, it is essential to consider the priority and efficiency of activities and programs, and to avoid duplication of efforts. As such, we are even more convinced that the expansion of the bottle bill is a bad idea.

New York State continues to operate two separate state-wide recycling programs: mandated municipal recycling for those post-consumer wastes for which there is an economic market, and mandated store-based recycling for certain beverage containers.

Shifting materials from one mandated recycling program to another will produce limited environmental benefits to the state, while imposing significant additional costs and inconvenience on consumers and businesses alike.

The effect of this bill is to impose an additional $120 million per year cost on New York State consumers. Since the impact of this expanded deposit law will be similar to that of a sales tax on food, the impact will disproportionately affect low and middle income taxpayers.

While purporting to provide financial support to municipal recycling efforts, this proposal will in fact take valuable post-consumer materials out of municipal recycling programs, and divert those materials to store-based recycling.

Many beverage bottles that will be affected by an expanded bottle bill are made from polyethylene terephthalate (PET), which has a current average market value of $360 per ton. Aluminum cans, which are used for some non-carbonated beverages captured by an expanded bottle bill, have a current market value of $1080 per ton.

In contrast, newsprint - a major component of municipal recycling programs - has a current average market value of just $52 per ton, a fraction of the value of material that the bottle bill is siphoning off from the municipal recycling program.

In short, this bill will reduce the average per-ton recovery value of the municipal recycling stream, while necessitating expanded state-taxpayer financial support for those very same programs (data on current scrap material prices are from scrapindex.com)

By increasing the volume of redemptions, this bill will significantly increase the compliance burden placed on supermarkets, convenience stores and other beverage outlets.

The existing bottle bill imposes additional costs on retailers, consumes limited store space and staff resources, and raises sanitation and housekeeping problems in stores.

This bill would exacerbate each of these adverse impacts on the retail sector while at the same time divert valuable resources from the municipal recycling system. It is unclear why we would want to mandate that our food stores play an even larger role in our solid waste management system.

Finally, this bill will have a significant adverse financial impact on the beverage industry, which currently uses unclaimed deposits to partially finance their costs imposed by the existing bottle bill.

Touted as an environmental measure, this is in reality a hidden tax on New York State manufacturers, bottlers, distributors and ultimately consumers. These added costs will eventually lead to higher prices and perhaps sales.

Again, we appreciate this opportunity to provide input on the Executive Budget proposal, and look forward to the opportunity to discuss these issues with members of the State Legislature, and answer any questions you may have on our comments today.

Thank you