August 04, 2021

O’Day: I want my nickel back

I want my nickel back. I’m not talking about my favorite Canadian rock band that so many Americans love to hate. I mean all the nickels I’ve forked over for Iowa’s five cent deposit on cans and bottles.

The deposit is a regressive convenience tax on lower income individuals who consume more soda than anyone else.

According to a joint study published last year by researchers from Boston University and the University of Michigan, “Our analysis suggests that adults living in the richest 10% of families drink about 2.5 fewer sugary drinks a week than those in the poorest 10%.”

In the spring of 2020 amid coronavirus concerns, Governor Reynolds suspended on-site redemption at retailers that accept containers, most of which are grocery stores. She lifted the moratorium on July 24, 2020. Fareway defiantly refused to resume deposit redemptions at its stores, citing covid risks to employees and customers.

Fareway’s covid excuse seems dubious, especially as more Iowans get vaccinated. But often the returned cans are sticky, smelly and even crawling with bugs. That’s a public health concern generally, and the primary burden should not fall on grocery store employees.

Some grocery store locations stopped taking cans years ago, an Iowa Department of Natural resources rule allows grocery stores to reject the redemptions only if they can refer customers to a redemption center within a 10 minute drive, but the DNR lacks the authority to adequately enforce that rule.

In many cases, the penny that redemption centers and grocery stores receive for sorting each container is no longer profitable. Ten years ago Iowa had 213 stand-alone redemption centers but only 117 today, according to the Iowa Department of Natural Resources. Leonard Walters, who owns one redemption center in Des Moines and another in Boone, said the one cent makes it a struggle to pay utilities and labor costs. The five cent deposit was enacted in a bipartisan 1979 state law to encourage recycling and has never been adjusted for inflation.

State Senator Mark Costello, R-Imogne, said he would like to see the handling fee increased from one to two cents. That’s a worthy proposition if the program is to continue, but Iowa businesses and consumers would be better off if it was simply abolished.

By keeping the deposit at a level low enough that most people have little or no incentive to return their containers, the program encourages the vagrancy of homeless people who collect them. It enables homeless alcoholics and drug addicts by providing them with an inconsistent source of income that’s typically barely enough to fuel their self-destructive lifestyles.

Iowa State University economist Dermont Hayes said if the deposit had been indexed to inflation it would now be 17 cents, and redemption centers would collect a fee of three cents per container instead of one. Hayes told The Des Moines Register Iowans are increasingly recycling the containers or throwing them in the trash, so there’s not much reason to believe the program still reduces littering in a significant way. He said the beverage distributors that collect the deposits from retailers have benefited tremendously from the trend of decreasing redemptions, estimating distributors kept $13.9 million more each year from 2012 through 2017.

Environmental groups claim the deposit sees 1.7 million fewer containers in landfills annually, a figure surely overstated as returns have waned with inflation. There’s no shortage of space for landfills anyway, there never has been. It’s a green fallacy. Anyone who’s driven across Iowa knows there’s no shortage of land.

Many of the dwindling number of Iowans like my mom who still return their cans and bottles waste significant quantities of water rinsing them, so any environmental benefits of the program are probably a wash.

Recycling is a waste of time, money and resources to begin with. According to New York Times science columnist John Tierney, “To offset the carbon emission from one plane to Europe [New York to London], you would have to recycle about 40,000 plastic bottles.” So minuscule is the benefit that rinsing those bottles would erase the carbon savings. In other words, John Kerry only has to take about 40 flights to Copenhagen (probably 39 if you factor in the hot air he spews verbally at these climate summits) to negate any potential climate benefits of the 1.7 million containers supposedly saved from Iowa landfills by the five cent deposit.