A Refreshing Approach To Bottled Water
March 6, 2009
Although anti-tax sentiment remains strong in Tallahassee, Gov. Charlie Crist is showing leadership by proposing the state begin charging a fee to bottle water companies that each day siphon millions of gallons of Florida's water for free.
It's about time.
Water - whether directly from the ground or Florida's magnificent springs - is a state resource. Yet companies now need only pay a nominal permitting charge before they can tap the resource. They profit handsomely by selling it to the public in and outside the state.
Taxpayers should get a cut too, and Crist is proposing a reasonable 6 cents - the amount of the state's sales tax - for every gallon taken by commercial bottlers, which state officials estimate pump at least 5.4 million gallons a day. The state believes the fee would generate about $56 million the first year and about $70 million a year after that.
The money, appropriately, would be used to continue developing new water supplies, including drought-proof desalination plants and other projects. This is not a desperate effort by the state to find a new revenue stream during a financial crisis.
The revenue for water projects is badly needed. In the Tampa Bay region, drought has strained public supplies. And the state account for water projects, funded by documentary stamp taxes, faces a $15 million deficit due to the severe housing downturn, according to The Miami Herald.
Without question, bottled water is a popular drink. But it is not, as some lawmakers believe, just a luxury or a status symbol. Bottled water is vital during hurricanes and other disasters, and when residents, for whatever reason, cannot use public drinking water or private wells for varying periods. Commercial bottlers, who pay taxes and provide valuable jobs, often donate free water during these times, which is commendable.
Still, it's time for these companies to pay for tapping the state's water, the same way the state charges companies and corporations for mining phosphate and tapping natural gas.
Bottled water companies already are the beneficiary of a major break from the state, one not often discussed. They're exempt from the "local sources first" water law that prevents public suppliers from crossing jurisdictional lines and tapping other communities' water sources unless a strong case is made. That was a major concession made to guarantee passage of local sources first legislation about 10 years ago.
In addition, some company officials have argued it's unfair to single out bottlers when public suppliers, among others, wouldn't have to pay. But these companies aren't being singled out. Public suppliers and ranchers who use large amounts of water aren't turning around and selling their water to the public for profits. Bottlers do - and profit tremendously.
A severance fee is long overdue. The Legislature needs to implement it.
Another proposal - to lift the sales tax exemption on retail sales of bottled water - is not as clear cut. In all likelihood, the severance fee would be passed to consumers, who also would face paying sales tax if the exemption is removed.
Because of Florida's financial crisis, the state needs to seriously examine all sales tax exemptions - the one on bottled water included - and remove those that don't make sense. Bottled water isn't always necessary. It doesn't seem to make sense to exempt it when people have to pay sales taxes on soft drinks, sports beverages and, interestingly enough, carbonated bottled water.
The state could always order collections suspended during times of disaster or other crises.
The sales tax exemption is not a must. The severance fee should be.
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