‘Bag Tax’ or ‘Bag Ban’ Debate Continues in Chicago Suburb

Published May 13, 2011

The City Council of Evanston, a suburb just north of Chicago, has been weighing the pros and cons of a five-cent tax on each disposable plastic or paper shopping bag used in the city. Now an ordinance to ban plastic and paper shopping bags is on the horizon.

In late April, Evanston’s administration and public works committee recommended the City Council consider enacting a tax of five cents on each disposable shopping bag a person may use. The same ordinance was scheduled to be considered in September 2010, but the proposal was shelved until this spring.

Evanston City Manager Wally Bobkiewicz noted in the late April council meeting minutes that “many discussions have been held, the business community was included and the city government was asked to bring this ordinance in a draft form to get further direction.” He ended the meeting minutes entry by writing “a revised ordinance to ban all bags is possible.”

‘An Opening Salvo’
Alderman Coleen Burrus told fellow council members she wanted consideration of the five cents-a-bag tax as “an opening salvo, to get people aware about the ecology around us, while the five cents is a figure being suggested to get residents to stop using deposable plastic bags.”

“The cause du’jour in the environmental community is plastic bags,” said Illinois Retail Merchants Association President David Vite. “While several municipalities have taken some action in this area, there are several issues of concern to retailers.”

These issues include excise taxes and outright bans, including on paper shopping bags.

Tax In DC
The Evanston ordinance tax ordinance would be based on a similar one that took effect last year in Washington D.C.

“Since January 2010, shoppers in Washington, D.C. have had to pay five cents on most paper or plastic bags at grocery and convenience stores,” said Justin Higginbottom of the Washington, D.C.-based Tax Foundation. He said taxes such as these are designed to “decrease consumption, though it is not clear how much environmental benefit the citizens will receive if fewer bags are used. And with the likelihood of inter-governmental transfers, bag taxes may just be another way for a state or city to grab general revenue.”

Evanston’s Bobkiewicz said the city government plans to “reach out to grocers and others, distribute information and come back” with a third draft of the ordinance.

Alderman Ann Rainey said the draft “should be presented to the City Council when all the information is gathered and a revised ordinance is written banning all bags.” This could happen by early or late summer.

Montgomery County Tax
Meanwhile, Montgomery County, Maryland on May 3 passed Bill 8-11 imposing a “five cent excise tax on carryout bags provided to customers at retail establishments, and requiring those retail establishments to collect the carryout bag tax and remit the tax to the county,” with 20 percent of the tax rebated to retailers to cover their costs. The tax takes effect on January 1, 2012.
Supporters, including County Executive Ike Leggett, say the tax is discretionary.

“If you don’t want to pay the fee, get a reusable bag,” he told The Washington Examiner. “It’s that simple. It’s not revenue enhancement. It’s not like it’s filling county coffers. It’s easily avoidable.”

Opponents cited possible “unintended negative” consequences from the tax. Michael Faden, senior legislative attorney for the county, raised such possibilities in his memo to county officials: “These include contamination of reusable bags, increased costs to consumers (particularly low-income and elderly), and discouragement of plastic bag recycling.”

Regressive Burden
In a guest editorial in the Washington Post, County Council member Nancy Floreen wrote the tax “is regressive, placing the heaviest burden on those with the lowest incomes. The added expense of paying the tax or buying reusable bags may not be much of a problem for the wealthy; not so for families already having a hard time making ends meet. I foresee scenes in which residents, perhaps senior citizens, overload their shopping bags to save money, only to spill groceries all over the sidewalk on the walk home. That’s not saving anybody’s environment.”

She added, “And speaking of environments: The one inside a reusable bag is perfect for growing bacteria and cross-contaminating food, so if you opt against paying for disposable bags, you had better remember to wash your reusable ones. Do you really want to carry home unwashed chicken or seafood in a bag you might be carrying apples in later?”

The American Chemical Council said in a statement, “Plastic bags are fully recyclable, and instead of entertaining recycling partnerships and programs, the county council chose a policy that punishes families by raising grocery costs unnecessarily.”

The county’s department of environmental protection staff reported they considered the option of a ban but rejected the idea because “a ban takes the choice of using plastic bags away from consumers. Taking away consumer choice was not an option that was acceptable to us.”

John Skorburg ([email protected]) is associate editor of Budget & Tax News and a lecturer in economics at the University of Illinois-Chicago.

Internet Info

Tax Foundation Fiscal Fact No. 224, “Bag Taxes Disappointing in Debut”: http://www.budgetandtax-news.org/article/27995