Bag Tax Discussion Planned for Nov. 4

The Montgomery County Council’s Transportation, Infrastructure, Energy and Environment (T and E) Committee will hold a work session at 9:30 a.m. on Monday, Nov. 4 to discuss Bill 10-13 that would amend the County’s bag tax law to limit the five-cent fee only to bags distributed at “food stores.”

The T and E Committee, which is chaired by Roger Berliner and includes Councilmembers Nancy Floreen and Hans Riemer, will meet in the Seventh Floor Hearing Room of the Council Office Building at 100 Maryland Ave. in Rockville. The meeting will be televised live by County Cable Montgomery (CCM—Cable Channel 6 on Comcast and RCN, Channel 30 on Verizon). The broadcast also will be streamed through the County Web site at www.montgomerycountymd.gov .

The chief sponsor of Bill 10-13 is Councilmember Berliner. Councilmembers Floreen, George Leventhal and Craig Rice are co-sponsors. The bag tax law in its current form went into effect in January 2012.

The bill defines a food store as any retail store where food consists of more than two percent of the gross sales by dollar value. The tax would continue to cover bags dispensed for non-food items at food stores. Bill 10-13 would repeal the tax on plastic bags distributed with takeout food.

At the Committee’s June 18 public hearing on the bill, the County Executive (represented by Department of Environmental Protection Director Bob Hoyt) and various environmental and civic organizations (such as the League of Women Voters), as well as the District of Columbia’s Department of the Environment, opposed any scaling back of the current bag tax. They emphasized that a bag poses the same environmental hazards no matter its origin, and that the relatively new bag tax law should be given time to prove its worth before its scope is substantially cut back.

Local Chambers of Commerce and other retailer and business organizations (except the Montgomery County Chamber of Commerce) generally supported the modifications to the tax in this bill, and some asked that the tax be repealed completely. They argued that bags from nonfood stores—such as department stores, electronics stores or pet stores—tend not to be thrown away and make up a relatively small part of roadside and stream litter. They also said the current law has resulted in increased shoplifting because it encourages customers to bring their own bags into stores – something retailers generally discourage. 

Total revenue collections from the tax in Fiscal Year 2013 were $2.39 million for 59.7 million bags. The Executive Branch has reported that for the first two months of FY14, collections are ahead of the pace for the first two months of FY13, reflecting that the number of vendors reporting collections has increased from 928 in August 2012 to 1,119 vendors in August 2013. However, information shows that the average number of bags reported per retailer from January 2012 through August 2013 has declined steadily.

 The tax yields a flat 4¢ per bag taxed (one cent goes to the retailer for overhead). The revenue loss to the County, if Bill 10-13 is enacted, would be directly proportional to the reduction in the number of bags taxed. The fiscal impact statement submitted in June by the County Executive estimated the loss at $1.832 million in Fiscal Year 2014, but the accuracy of the estimate is difficult to measure at this stage.

The County does not have hard data on the number of bags from non-food stores (as defined in the bill) found in streams or elsewhere in the environment.

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