There has been a lot of commotion lately over this year’s legislation that would ban plastic grocery bags, and impose a tax on paper bags (read about it here, watch more here).  You’ll recall that it already passed out of the Assembly (barely) with the Speaker’s vote making the difference (this legislation, if passed, would force a manufacturer of plastic bag in his district to lay of a few hundred people).  This bill would outlaw plastic grocery bags, and would then create a mandatory per-bag fee on paper bags of at least five cents.  It is worthy of note that the hundreds of millions of bucks that would be collected through this mandatory fee, according to the current language of the bill, would go not into a government program, but – get this – into the pockets of the grocery store owners (in most cases, very large mega-chains like Safeway, Ralphs, Pavillions and such).  It is no wonder that the California Grocers Association, who has opposed the bag-ban in previous years, suddenly has come out in full support of this bill.  One can picture the sign at the grocery check-out line, “We apologize for this new bag fee, but it is the law!"

Yesterday AB 1998 came up for a vote in the Senate Appropriations Committee.  One might have expected that this bill would pass on a partisan vote, with Democrats (who love to ban things, and play nanny – and who also love to whack people with fees) voting yes, and freedom-loving Republicans voting no – and since there are more Dems than Reps on the committee, AB 1998 should be on its way to the full Senate for a vote, right?  Not so!  I am very pleased to share that it was clear that Democrats are quite split on this bill, because instead of voting out the bill they instead to the unusual step of voting to refer it to the Senate Rules Committee (an exclusive five member committee that is under the firm control of Senate President Darrell Steinberg).  Why did this happen?  And will the bill come back this session?  We did a little “looking under the hood…" to gain some understanding.

Apparently what has happened is that there is a full-scale battle taking place between liberal Democrats in the legislature, and a big split within the grocers association.   It starts with some key Democrat legislators who love the ban, and they love a fee on bags – but they don’t like at all that the money collected from the fee goes into the pockets of grocery store owners.   So they are insisting that as much as four cents of the five cent per-bag fee go to the state in some way.  Word is they are willing to perhaps compromise for “half…" of the fee going to their pet state programs.  Needless to say, this did not go over well with the grocers at all – who undoubtedly see in this bag ban a big financial pay off.   Then I hear that there is a big division within the Grocers Association, with one faction saying that  some of a loaf is better than none, and others saying that the grocers should pull their support of AB 1998 all together if they can’t pocket the full fee.  And there is yet another faction of grocers (the patriots) who never liked AB 1998 to start with.  So there are three factions battling it out among grocers.

The irony here is that this in-fighting may ultimately benefit all of us, the consumers — because it is very likely that this legislation will never see the light of day (and more importantly, never get to the Governor’s desk).  That would be a good thing, because there is no doubt that AB 1998 represents terrible public policy.

This entry was posted on Friday, August 13th, 2010 at 12:00 am and is filed under Blog Posts.