Regional Report: South Update

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Regional Report: South Update

The bottle bill saga takes a new twist in Tennessee. In Virginia, rising credit card fees prompt a try for action in Washington. In Oklahoma, the conflict with tribal smoke-shops over cigarette taxes unites retailers and wholesalers in the halls of the state legislature. And a shortage of petroleum contamination funds in Florida threatens oil marketers' pocket books.

There are many different types of bottle bills, but the bottle bill up for consideration in Tennessee is an animal all its own.

"It calls for an 8 cent deposit per container, with 5 cents returned to the consumer when he turns it in for recycling," said Marylee A. Booth, executive director of the Tennessee Oil Marketers Association (TOMA). "We're firmly against it. It's just too unpredictable."

Booth explained that if the program generates greater bottle returns, it will reduce revenue to the state, since it would give back 5 of every 8 cents it collects, but if it generates lower bottle returns, it will work against the recycling program, since there will be fewer recycled containers.

"There's also the matter of our eight border states, none of which have a program such as ours," she continued. "That means shoppers will cross the border into Tennessee and turn in their containers to collect the 5 cents, when they paid nothing into the program in the first place."

In the meantime, the state's universal ID program is set to end on July 1, and TOMA is working to have it renewed.

"At one time many people objected to IDs, so there may have been justification for getting rid of the program then," she said. "But today everyone's accustomed to it so there's no reason to let it lapse. We think it's a good program and should be continued, so we're doing what we can to see that it stays in place."

"We're the only industry that puts its prices in numbers three feet high for all the world to see," said Mike O'Connor, president of the Virginia Petroleum, Convenience & Grocery Association (VPCGA). "But the numbers give the wrong impression. They make it look as if gas stations are making enormous profits from the sky-rocketing prices, when, actually, it's the credit card companies that are really making the profits. As prices go up, their fees go up, and they don't even have to lift a finger to earn those extra dollars, except to rake them in."

O'Conner points out that when gasoline was $2.30 a gallon, the credit card fee was around 7 cents per gallon. At $3.60 a gallon, it's over 10 cents. And if (or when) it hits $4, it will be 12 cents a gallon, according to O'Conner.

"When so much of the consumer's dollar goes to the credit card companies, the gas station operator can raise his prices only so much to make a fair profit," said O'Conner. "That's why I'm looking forward to May 14, when the petroleum marketers association meets in Washington. We're going to be lobbying our representatives to pass legislation that gives us and the country, some relief from the burden of credit card fees."

The Washington Conference will meet May 14-16. For more information, call (202) 628-2100.

"In Oklahoma, for years, the cigarette taxes in tribal smoke-shops were 17 cents lower than the taxes in our convenience stores," said Vance McSpadden, executive director of the Oklahoma Petroleum Marketers Association/Oklahoma Association of Convenience Stores. "And even though it put us at a disadvantage, we managed to live with it."

However, a few years ago, the state's cigarette excise tax was increased from 46 cents to $1.03 a pack, which made the situation "really tough," he said.

As if that weren't enough, another wrinkle has marred the picture: The 6-cent border stamp that tribal smoke-shops have been getting to protect them from loss of sales to border states has generated an illicit traffic in cigarettes. Smoke-shop retailers are selling their 6-cent-stamped cigarettes to other retailers, putting a strain not only on retailers but wholesalers that stamp the cigarettes, according to McSpadden.

"As a result we're backing a bill in the state legislature, with the wholesalers' support, to regulate wholesalers more closely, and eliminate the 6-cent stamp," he said. "We think this will dampen the illegal traffic that's taking place and give our non-tribal retailers a better chance to survive in the marketplace."

McSpadden aims to get the bill passed before the session of the legislature adjourns in May.

Florida, like many states, is having a budget problem this year because of revenue shortfalls, and one of the programs running short of funds is for petroleum contamination clean-up.

"We work very hard to protect our environmental trust dollars," said Jim Smith, president of the Florida Petroleum Marketers Association (FPMA). "Those dollars are collected with the expressed purpose of addressing petroleum contamination. In certain areas, however, we run into funding caps that limit the amount of clean-up we can do, which means that some of our members may be forced to spend out-of-pocket dollars to finish the job."

The FPMA found a sponsor for a bill it drafted, which will protect our members when the clean up of a site has reached its funding cap limit. "We're expecting to have the bill heard on the floor of both houses, which we hope will lead to its passage," he said.

On the credit card front where fee revenues are rising as gasoline prices soar, the FPMA joined a national coalition advocating reform in the fee structure. "Credit card companies are making more on a gallon of gas than some petroleum retailers," said Smith. "So we're working on both the state and national level to bring sanity to the marketplace. Our retailers need some relief before prices go completely out of sight."