Sustainability Fee

A sensible, sustainable, long-term funding option for recycling in Michigan

It's time that Michigan residents stand up for recycling. It's time our state stopped the endless stream of waste to landfills, where the millions of recyclable items end their usefulness.

Recycling means jobs for Michigan residents. Every item recycled, rather than landfilled, creates new jobs in the collection, processing and remanufacturing of the recycled product. Landfilling creates only growing mounds of trash. But recycling continues to languish in Michigan. We have long neglected this environment – and jobs – opportunity in our state. Now is the time to change that.

The Sustainability Fee recognizes that everything has a disposal consideration. Therefore, every time an individual makes a retail purchase over $2, he or she would pay a flat fee to help cover the cost of recycling in Michigan. That's  pennies on the entire purchase – and the transaction fee would be the same, whether the purchase was $100, $5, or $500


SUSTAINABILITY FEE DISCUSSION

The concept of what was called the Penny Plan several years ago, and now is being referred to as a sustainability fee, was born out of the acknowledgement that virtually all material, as it is used or consumed, has a certain resource management cost associated with it. Sound, sustainable recycling and resource management is an important part of our quality of life, and has the collateral benefits of reducing pollutants, conserving our resources, and creating jobs. To that end, a sound sustainable source of covering those costs, a transaction fee, would also be appropriate and desirable.

The sustainability fee was designed so that it would be a fee and not a tax. There would be a reasonable nexus between the assessment of the fee and the purpose for which the funds were used. The funds could only be used for recycling and resource management purposes.

Nor could the fee be considered a sales tax. A flat fee of ____ cents is assessed on the total retail transaction, and does not vary based on the value of the transaction. The fee would be assessed on all purchases over $2.00, whether it be a grocery basket with $10 worth of merchandise, a $100 power washer at the hardware, or a $600 suit, tie and shirt at the haberdasher.

The concept uses a broad base of goods to which the fee attaches, in order to keep the rate of the fee as low as possible, and its application consistent with the concepts of resource management.

In the original Penny Plan, certain items were exempted in order to recognize already established public policy considerations, to avoid the potential for double assessment, or to recognize the practical limitations involved in assessment collected at retail. Thus, exempt items included:

  • Utilities
  • Prescription Drugs
  • Fuels
  • Business to Business Transactions
  • Vended Products
  • Services (the sustainability fee would apply to the retail sale of tangible goods, but not to the purchase of services)

Potential collection and assessment complications also were recognized. Consequently, those retail locations with fewer than 24,000 transactions per year were not obligated to assess and collect the fee. This would avoid the potential difficulties to be encountered by not only small business, but also seasonal businesses and start-up businesses. The cash register systems of larger retailers can be better suited for either a relatively simple programming change or a look up key to ease the assessment and collection process. Remittance could simple, and could be piggy backed along with the filing of other state document submissions.

Placing the transaction fee in the Michigan Constitution was also an essential element of the plan. It provided assurances that:

  • The fee was embraced by the public, as it could not go into effect unless approved by vote of the electorate.
  • Even if someone wanted to argue that it was a tax, placing it in the constitution provides full legal legitimacy.
  • Because a cap on the fee would be placed in the state constitution, it would guarantee that the amount of the fee could not later be increased by the legislature or other political considerations. The fee could, however, be reduced by action of the legislature if circumstances changed in subsequent years.
  • It would assure that the public could not also be later hit with a double price tag for recycling by expanding the state’s bottle deposit law.
  • It would guarantee that future legislatures or administrations could not divert the funds intended for recycling and resource management to some other unintended purpose (as we all know sometimes happens).
  • Statewide polling on this topic has shown support exceeding 75%. The economic and quality of life benefits of such a plan have also been thoroughly vetted. More that 12,500 new, permanent jobs could be created; and greenhouse gas emissions (GHG), carbon dioxide, would annually be reduced by more than 1.4 million metric tons (the equivalent of 87 million gallons of gasoline, electricity savings to power 100,000 homes, or the preservation of more than 5.000 acres of rainforest).