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Wiggle room in tax crisis

First published in print: Sunday, November 16, 2008

While Governor Paterson is trying to coax billions in budget cuts from a reluctant Legislature, he also is asking us to stoop for nickels.
     
As in deposit bottles and cans. For the first time in memory, passage seems plausible for a Bigger Better Bottle Bill that would add bottled water, iced tea and other noncarbonated beverage containers to the existing short list of soda and beer containers that require a deposit. In the past, the state Senate has stonewalled any effort to expand the bottle bill, and especially to pry the unclaimed deposits from the fingers of the beverage industry.

Bottlers and wholesale distributors keep $144 million a year in unclaimed deposits, so those beer cans do add up. Industry keeping unclaimed deposits has been a tradition for 25 years. An expanded bottle bill would raise the unclaimed amount to as much as $218 million a year, according to the New York Public Interest Research Group.

But that's purely speculative. In any case, it's a lot of money. Naturally, the industry doesn't want to part with those nickels because, after all, unclaimed deposits have become an established contributor to its bottom line.

But confronted as the state is with a desperate need for new revenue sources, necessity may trump the Senate's traditional defense of the soda and beer folks. The operative word remains "may." In the past, the Assembly has passed the bill, but always when the Senate signaled it would not. Come January, the Republicans will lose their majority grip on the Senate, barring any Democratic defections to their side. Then, in theory, the stars could align in the bottle bill's favor. We'll see. It may come down to how much of a bottle bill we get.

There are two distinct elements to the Bigger Better Bottle Bill. The beverage industry has fought expansion of what qualifies for deposits tooth and nail. But it has fought far more ferociously the notion of turning over the unclaimed deposits to the state. Not surprising.

Given the state's needs for gobs of new money, though, it stands to reason the governor will goad the Legislature into going beyond just expanding what requires a deposit. A mere expansion would offer the benefit of cleaning up the environment and reducing the landfill waste stream. In most years, that would be pretty good. This year, it's not enough.

If the Legislature goes after the unclaimed nickels, as it needs to do, the question becomes whether or not the money is shared with the beverage industry.

Arguably, it should be. Otherwise, taking all the nickels away from Pepsi and Coke and the beer companies is a thinly veiled tax on them, and certainly does nothing for our reputation as a business unfriendly state. So maybe we split it with them, or give them a third. There's wiggle room here............http://timesunion.com/AspStories/story.asp?storyID=740295