The deposit beverage container fee will increase in two months to 1.5 cents to help the state’s recycling program, or HI-5, in the black beyond 2014, according to the Hawaii Department of Health.
The fee is charged to manufacturers, distributors and importers of beverages in Hawaii and hasn’t been raised for four years. After consideration of the fiscal year 2012 redemption rate of 77 percent and evaluation of the current deposit beverage special fund balance, DOH Director Loretta Fuddy determined the container fee will increase from 1 cent to 1.5 cents per container beginning Sept. 1.
Distributors registered with the state were sent a notification letter earlier this week.
“The half-cent fee increase was written into the bottle law from its inception to ensure the recycling program could sustain itself and continue to pay back deposits to consumers,” Fuddy said. “We were able to hold off a fee increase for four years by using existing funds; however, the special fund is now too low to continue the program through 2014, and the current fee is not enough to build critical program reserves necessary to conduct essential operations.”
State law requires the container fee to increase from 1 cent to 1.5 cents per container if the redemption rate exceeds 70 percent, unless DOH’s director, in consultation with the state auditor, determines a fee increase is not needed. The statewide redemption rate from July 1, 2011, to June 30 remained strong at 77 percent; the rate for the previous year was 76 percent.
A decision to postpone the fee increase was made in 2008, 2009, 2010 and 2011 based on the program’s ability to continue operations by drawing down existing reserve funds.
The change in the container fee to 1.5 cents is expected to result in an increase of approximately $4.5 million in annual program revenues.
The fee means the deposit plus container fee will increase to 6.5 cents – a 5 cent deposit to be returned to the consumer when the container is recycled and a non-refundable 1.5 cent container fee to cover administrative costs.
Because the law only requires beverage distributors pay the container fee to DOH, there is no guidance on how retailers may decide to pass on the fee to customers. Retailers may choose to round-up or round-down the additional half-cent charge.