Six months ago, I sat in a Willow Area Community Organization meeting where I listened to a brief presentation by the Mat-Su Zero Waste Coalition (MSZWC). They were requesting money for a campaign designed to educate the Borough about the dangers of plastic grocery bags. I was opposed to giving the group money, but I was in the minority.
It’s not that I am a stanch defender of plastic grocery bags (although my family does reuse them for multiple things before we recycle or put them in the trash filled with garbage) or that I’m against promoting the responsible disposal of the bags. Rather, I was concerned that the money would be used to advocate for regulation and taxation of one-time use bags. I was assured that this would not happen, and the motion was amended and passed. Fast forward to Aug. 15 when an ordinance for the regulation and taxation of plastic grocery bags will be voted on by the Mat-Su Borough Assembly.
As an economics teacher, I understand that the concerns of the MSZWC are legitimate because they see plastic bags as an environmental hazard; what economists call a negative externality. However, most residents in the Valley do not. How do I know this? Basic economics. If a majority of shoppers disliked plastic grocery bags, there wouldn’t be 21 million used every year in the Borough.
Because the perceived cost of negative externalities aren’t the same for everyone, it is difficult to limit their impact on society. While one person might imagine the horrors of a caribou ingesting an improperly discarded plastic bag (a reason actually listed in the ordinance), another doesn’t even notice them at all. This imbalance in the realized costs of negative externalities exists everywhere. For example, most teenage boys turn the rooms that they temporarily borrow from their parents into what my wife angrily calls “disaster areas.” They are perfectly content with living in squalor, but for their mother, the negative externalities are unbearable.
Economists differ on how best to deal with negative externalities. However, most believe that when people work together, they can reduce the damage and create mutually beneficial outcomes. The property of my first home in Anchorage bordered three others with either no fence or wooden fences that were rotting and falling down. Wanting a way to corral our two young boys, my wife and I decided that something had to be done. Being a strong, relatively young man with very little disposable income, I approached my neighbors with a plan. I offered to build the fences, and turn the nice side of the cedar boards toward their yards if they bought the materials. By working together, WE solved the problem, WE built the fences, and most importantly, WE built relationships.
My point here is that the number of solutions for reducing the plastic bag “problem” in the Mat-Su is limited only by the creativity of those working collaboratively to solve the problem. Encouraging businesses to sponsor multi-use bags, offering tax incentives if businesses use alternatives, and educating the public about proper disposal and recycling are just a few. Unfortunately, since the MSZWC doesn’t have the power to ground us and take away our electronics until we clean our rooms, they have decided to use political power to force OTHERS to pay for THEIR perceived cost of this externality.
The ordinance sponsored by Assembly Member Doty is a 10-cent excise tax charged to major retail stores for every plastic bag used. Sadly, the public does not vote on excise taxes, so there is no way for Mat-Su Borough voters to show if the externalities are worth the $1 to $2 million dollars that will be collected from them by this tax.
Make no mistake. If the assembly institutes this tax, the money will be collected from individuals and families in the Borough. Those who truly understand the nature of taxation understand that businesses do not pay taxes, people pay taxes. All of the large retail stores compete in a low profit margin business environment, so this tax and the cost of the regulations that come with it, will be shifted to customers in the form of higher prices. If you were at the assembly meeting two weeks ago, you saw first-hand that higher taxes are the last thing that a majority of Mat-Su residents want during this economic recession.
Todd Smoldon lives in Willow and has been a resident of the state for 30 years. He earned his BA in economics and Master’s degree in teaching from the University of Alaska-Anchorage, and has been teaching high school economics for almost 20 years.