Right-wing think tank Beacon Hill Institute is out with an update to their 2011 report on the DC bag fee. Last year I opted not to respond to their "study" because it seemed so flawed that surely no one would take it seriously. Unfortunately it came up several times during the 2011 and 2012 legislative sessions, so we need to go on record this time about the new misinformation they are circulating.
Patrick Gleason of Americans for Tax Reform, the organization that funded the BHI study, published an op-ed on National Review Online yesterday that takes BHI's already flawed study and adds a whole new layer of bad logic. DCist posted an excellent rebuttal to Gleason's op-ed, so rather than be redundant here, I'm just going to add a few additional points.
Gleason contends that the fee failed because it both didn't raise the revenue projected nor has it reduced bag use as much as it could. Of course if disposable bag use dropped 80 to 90 percent or more, almost no one would be paying the fee and thus almost no money would go toward the Anacostia River Cleanup Fund. And that was the design all along! While the CFO initially projected the bag fee would raise $3.6 million in 2010, that projection assumed that people would be slow to adopt the practice of refusing disposable bags. They weren't. Bag use reductions of 60 percent or more were reported by stores within two weeks of the fee taking effect. That's reason to celebrate.
Ultimately we don't want anyone using disposable bags. That means the fund would be empty--which is why the Anacostia River Cleanup and Protection Act also established a speciality license plate and a donation option on income tax forms, so that there would still be revenue streams to fund restoration projects. But the real impact of the fee isn't the Cleanup Fund at all--it's the lack of bags escaping into the environment and polluting our rivers, streams, and neighborhoods. These bags cost the District millions of dollars a year in cleanup and disposal cost--far more than the $2 million the bag fee generates. They also create blight and contribute to the Broken Window Theory--litter begets more litter, neglect, and even crime.
As far as BHI's claim that the bag fee is killing jobs, it's actually creating them. To see more about how the Cleanup Fund is being used, watch this video from the District Department of the Environment:
Is installing trash traps and rain barrels, planting trees, and teaching kids about how littering is wrong, "corrupt" and "a cash grab"?
Gleason laments that bag use has only declined 67 percent. Honestly, that's higher than the number I use, 60 percent, which comes from a combination of anecdotal reports, cleanup data from the Alice Ferguson Foundation (AFF) and Anacostia Watershed Society (AWS), and a 2010 business survey conducted by AFF. He refers to an "80 percent drop expected by bag-tax proponents." We never set expectations; the legislation's fiscal impact statement suggested a 50-percent drop by the end of 2010 and a 90-percent drop by the end of 2014. The sometimes-reported 80-percent drop comes from the fees collected in January 2010, $150,000, which implies that District shoppers went from using 22.5 million bags per month based on 2009 usage estimates to 3 million bags per month. But the numbers don't really work that way, since not all businesses report their tax and fee collections monthly, they are actually remitting only 3-4 cents per bag distributed, and certainly compliance wasn't great in the early weeks. Hopefully we will get to 80 percent as businesses better understand the law and comply with it more broadly.
And it is in businesses' best interest to comply. That 2010 AFF survey showed that 78 percent of businesses--of all sizes--experienced either no impact or a positive impact since the fee took effect. Only 12 percent expressed any negative feeling toward it. What do businesses like about it? Mostly, they save a whole lot of money. Shoppers may think of those bags as "free," but the stores have to buy them. They are one of the largest expenses in the retailer's overhead, behind rent, payroll, and utilities. If 75 percent of shoppers are using fewer of them, that's a lot of money the stores can put back into employee salaries and benefits.
(Remember that you can report a business for violating the disposable bag law on DDOE's website or by calling 202-407-1277! First they receive a warning and education about the law; they are only fined on the second offense.)
As to the BHI claim that District residents are leaving the city to shop to avoid the fee, Safeway is on record as saying that they have seen no evidence of that. No business reported lower sales in the 2010 survey, either. And if people are willing to pay for gas or transit fare only to go to Prince George's County or Virginia--which charges sales tax on groceries--then I question their logic and math skills.
Gleason himself says in his author's note that he avoids the bag fee at all costs. That's exactly what we were going for. Don't pay it--don't use disposable bags! Or as DDOE so succinctly says, Skip the Bag, Save the River.