A better bag tax

Baltimore has a litter problem in general — trash of all kinds blows down streets, piles up in alleys and parks and clogs streams and the harbor. The company that makes trash-skimming boats uses videos of its products at work clearing massive piles of debris from the Inner Harbor after a rainstorm to advertise the TrashCat. "Has this ever happened to your harbor?" United Marine International's website asks next to a picture of a gigantic floating junk pile. That doesn't speak well of our city or its residents.

City Councilman Brandon Scott admits that his proposal to slap a 10-cent tax on almost every plastic and paper bag provided by Baltimore merchants won't eliminate litter, but he argues that the bags — the plastic ones in particular — factor disproportionately into the trash problem and, moreover, are easy to do something about. Washington, D.C., has a 5-cent bag taxes, and it has seen significant reductions in bag use (and bag refuse) as a result.

We objected four years ago when the council considered a proposal that would have enacted a punitive, 25-cent fee on plastic bags, by far the highest in the nation. Mr. Scott's proposal is certainly more palatable than that, and it appears to be on the inside track for approval in some form. Mayor Stephanie Rawlings-Blake's administration is on board with the concept, having included it in her 10-year plan for improving Baltimore's finances.

But it also comes at a time when city residents are coping already with higher federal, state and local taxes, including a bottle tax that is about to increase and is concentrated on more or less the same industry and much of the same economic activity that would be affected by the bag tax. Moreover, city merchants say they are concerned that the tax would be a burden to administer and would put them at a competitive disadvantage to stores in the suburbs. And finally, early indications about the new bag tax in Montgomery County suggest it has not changed consumers' behavior as much as expected.

None of those arguments against the bag tax are is fatal, but they should give the council pause before rushing to enact it. At the least, Mr. Scott's proposal requires some significant amendments.

The argument that the tax would have disastrous consequences for city businesses is undercut by the evidence in Washington. In a survey, 78 percent of business owners said they had seen either no effect or an improvement in their bottom lines a year after Washington's tax went into effect. Indeed, discount grocers Aldi and Save-a-Lot voluntarily charge for bags — they buy fewer of them as a result and pass the savings on to consumers. Mr. Scott says he decided on a 10-cent fee because that's what those grocers charge, and, he notes, it hasn't stopped lower-income consumers from shopping there.

The administrative burden for businesses could be lessened if a portion of the tax was shared with merchants — a feature of Washington's program — and if the legislation were simplified. As introduced, it calls for bags used to carry fresh produce, meat, fish and dairy to be exempt from the tax, and for merchants to make regular reports on how many bags were subject to the tax and how many were exempt. That would be an administrative nightmare. (What if you put potato chips in the same bag with potatoes?) Mr. Scott says he is amenable to removing that exemption and sharing a portion of the tax with businesses.

The potential for city grocers and other businesses to lose customers to the suburbs points to the advantage of handling the matter on a statewide basis. The General Assembly has considered plastic bag taxes several times, without success. Lawmakers have shied away from adding that to the other taxes they have raised in recent years.

Ultimately, that is the strongest argument against Mr. Scott's bill. Baltimore residents already pay (by far) the highest tax rates in the state, and over the years they've been nickel-and-dimed in a variety of ways. Becoming the second jurisdiction in the state to enact a bag tax is perhaps not the best public relations move at a time when the city is trying to attract more residents. If Baltimore goes ahead with this tax, it needs to do it in as revenue-neutral a manner as possible. Whatever is raised in bag tax fees could, for example, be used to reduce the amount of Baltimore's new stormwater fee. If the goal is really to change consumer behavior, not to raise money for the government, then the legislation should be written in such a way that the government does not, in fact, raise money.

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