The same year Academy Award winner Clint Eastwood starred as a no-nonsense San Francisco cop in the 1971 movie Dirty Harry, Oregon passed the nation’s first beverage container deposit-refund law.  Forty-two years later, Minnesota is looking at a similar approach to boost recycling rates, despite the success of innovations like curbside, single sort, and voluntary retail recycling programs.

Following direction from the 2013 Legislature, the Minnesota Pollution Control Agency (MPCA) is tasked with submitting (by January 14) a plan to increase Minnesota’s beverage container recycling rate to 80 percent. In preparation for that submission, on September 16 MPCA released a draft program design for a 10 cent deposit-refund program on beverage containers, up to one gallon. 

The plan calls for the creation of massive infrastructure through non-profit administration of the program. This infrastructure may include as many as 1,100 container redemption sites across the state.

Retailers would be on the front line of the system, responsible for collecting, administering, and remitting the 10 cent per beverage container deposit. And just like with sales taxes, this would be done at the expense of the retailer with no reimbursement of training, point of sale, collection, accounting, and remittance costs. Retailers even end up paying the swipe fees on 10 cent deposits when consumers use a debit or credit card.

The proposed system stands to increase consumer prices at a time when our economy needs spending to fuel our recovery.  Consider a case of water a customer purchases on a summer day. The price of that water could double with the addition of a $2.40 deposit, even more when a retailer is forced to add administration expenses to the price. Arguably a consumer may skip that purchase, or in the case of a retailer operating in a border-state community, the consumer may elect to take the entire purchase across the border.

MPCA is currently working on an assessment of the financial impact of the proposed deposit-refund beverage container program, with a draft report due December 30.  Additionally, MPCA will perform an evaluation of Minnesota’s current recycling infrastructure before May 30. Retailers can follow the program on MPCA’s website.

788,000 jobs across Minnesota depend on the economic viability of job-producing retailers like you. The proposed deposit-refund beverage container recycling program is a decades-old approach threatening these jobs by adding expense to retailers, increasing consumer prices, and dismissing the exploration of modern day alternatives.

MnRA recently submitted comments on the proposed program.  Click here to view all the public comments.

The fundamentals for growth in the U.S. economy are in place for 2014 and 2015, according to Minnesota State Economist Dr. Laura Kalambokidis.

Speaking before retailers at the Minnesota Retailers Association Annual Meeting Thursday, October 24, 2013, Kalambokidis painted a picture of an economy ready to grow, but cautioned that policy uncertainty and deficits could challenge growth in Minnesota and across the nation.

During her speech, Kalambokidis made the following points related to our economy:

• Basic fundamentals for growth in the U.S. economy are in place for 2014, 2015;

• Minnesota's employment has recovered to pre-recession levels;
• Currently, Minnesota employment growth exceeds the national rate;
• Minnesota's unemployment rate is well below nation's;
• Minnesota's per capita income exceeds U.S. level;
• Federal actions create near-term economic uncertainties;
• Policy uncertainty imposes costs;
• Minnesota's labor force growth is slowing sharply;
• In the long run, baby boomer retirements are expected to extend federal deficits;
• U.S. real GDP growth is expected to average just 2.5 percent per year over the next 30 years, well below the 3.1 percent 20-year average prior to the recession; and
• U.S. real GDP growth over next 30 years expected to be well below 20-year pre-reccession average.

In addition to Kalambokidis, Minnesota Senator Terri Bonoff addressed Annual Meeting attendees, thanking retailers for the jobs they provide and for their contributions to the Minnesota economy.

According to a new economic report released today by the Merchants Payments Coalition (MPC), debit card swipe fee reform has accomplished much of what Congress intended when it passed debit reform legislation in 2010 by pumping a significant infusion of savings and jobs into state economies across the country.

The report—The Costs and Benefits of Half a Loaf: The Economic Effects of Recent Regulation of Debit Card Interchange Fees—can be found at www.unfaircreditcardfees.com.

In Minnesota, the lower debit card swipe fee, which the Federal Reserve dropped from 48 cents per transaction to 24 cents, allowed Minnesota merchants to reduce costs, saving consumers nearly $108 million and spurred the creation of 690 new jobs in 2012. 

The report also measured the potential impact on the U.S. economy had the Federal Reserve followed the language of the law.  The Federal Reserve, for example, originally proposed a rate of at most 12 cents per debit swipe.  In Minnesota alone, $51 million would have been generated in consumer savings along with an additional $23 million in merchant savings and this would have been sufficient enough to support an additional 328 jobs.

Had credit card swipe fees been reduced to 24 cents per transaction, Minnesota consumers would have saved an additional $283 million, merchants would have saved another $127 million, and 1,815 new jobs would have been created last year.