Senator Carson, Representative Tucker, and members of the Joint Standing Committee on Environment and Natural Resources, my name is Sarah Lakeman and I am the Sustainable Maine Project Director for the Natural Resources Council of Maine (NRCM). I appreciate this opportunity to speak to you in support of LD 360, which I believe is the best option out of the seven proposals to change the handling fees on beverage containers. We also have some brief additional comments on proposals to change the deposit amounts (LD 575, LD 579, and LD 87).
Based on the best data available, Maine’s “bottle bill” continues to be our most successful recycling program with a return rate of between 75-87%[1]—far outpacing the statewide recycling rate, which was 36.79 % in 2016, and now presumed to be declining. NRCM has been tracking news stories and compiling a list of more than 30 towns covering more than 60,000 people that have reportedly discontinued recycling or cut back significantly, which means the bottle bill program is perhaps the only way those communities can recycle and avoid using taxpayer dollars for disposal. In other words, the bottle redemption model is the gold standard of recycling programs, and it has worked to help Maine municipalities save money and reduce litter in our environment for more than 40 years, all the while creating jobs and providing a steady supply of clean plastic, aluminum, and glass to the recycling markets.[2]
NRCM believes that passage of LD 360 is essential if we are to maintain enough convenient redemption center locations throughout the state; and it will provide crucial support for the small businesses that help our state reap the benefits of the bottle bill program. But, we also see a need to improve data collection so that we can better evaluate the impact of any proposed changes to the system, such as the deposit amounts.
Support for Handling Fee Increase: Redemption centers can increase revenue in two ways: 1) more volume of containers redeemed, and 2) increases in handling fees paid by beverage companies, which are set in statute. According to the Container Recycling Institute, labor accounts about half of the operating costs for a redemption center; and by 2020 these small businesses will experience a 60% increase in costs when compared with 2010, which is when the handling fee last increased. Unlike other businesses that can adjust their prices to cover increased expenses,[3] redemption centers just have to incur the added costs, and as a result many are on the brink of closure. It’s clear that redemption centers provide a great service to our state, and we need to support them through legislating an immediate increase in the handling fees.
More data is needed before any changes to the deposit amounts are made: NRCM is not convinced that an increase in the deposit is necessary at this time. However, if we are able to make improvements in data collection, and if there is clear data showing that our return rates are not as high as we think they are, then we would support an increase in the deposit amount. There is evidence that higher deposit amounts lead to higher return rate. Take Oregon for example, their beverage container law was written with a trigger in it; the 5-cent deposit would go up to 10 cents if redemption rate dropped below 80% for two consecutive years. When this happened, they saw an immediate increase in redemption from 68% to 90%. Oregon was able to have this automatic trigger to increase the deposit because their bottle bill is managed by a stewardship organization made up of beverage distributers and grocery retailers called the Oregon Beverage Recycling Cooperative[4] that provides the state with transparent, detailed reporting on a regular basis. We do not have a similar organization in Maine, and do not have anywhere near this level of reporting and data available for Maine’s program. Before making any changes to the deposit, we suggest that the Committee consider moving forward with a bill to require more reporting by all initiators of deposit and by third party pick-up agents, as proposed in Appendix D of the Department’s 2019 Annual Product Stewardship Report.[5]
In summary, we urge the Committee to pass LD 360 to provide immediate support for our redemption centers. And if there are to be any significant changes to the bottle bill program in the future, such as funding mechanisms, administrative changes, or deposit increases, then NRCM suggests it be based on reliable data and extensive evaluation by a stakeholder group. Mitigating negative impacts to our redemption center owners and their staff, and maintaining convenience and incentives for the public to participate, should be integral parts of the evaluation of any proposal to alter our bottle bill program.
Thank you so much for your time and careful consideration of this bill and my comments. I’d be happy to answer any questions that you may have.
[1] Office of Program Evaluation and Government Accountability Report No. SR-BOTTLE-17, May 2018.
[2] Since these programs are so successful, there are over fifty deposit programs for beverage containers worldwide, including ten in the United States; twenty-one were adopted after 2005.
[3] Consider that Pepsi increased their prices twice in 2018, see letters attached.
[5] Improved data collection and reporting is also the number one recommendation of Office of Program Evaluation and Government Accountability (OPEGA).
