Beverage Container Fee Increasing by Half-Cent

The deposit fee for beverage containers in Hawai`i will increase by a half-cent to keep the successful HI-5 recycling program in operation for two more years.

The beverage container fee is charged to manufacturers, distributors and importers of beverages in the state to cover administration costs. Consumers pay that and a 5-cent deposit fee that is returned to them when they redeem the containers.

State officials say the increase from 1 cent to 1.5 cents per container will go into effect on Sept. 1 and will keep the HI-5 program in the black beyond 2014.  The change, officials say, is expected to result in an increase of approximately $4.5 million in annual program revenues.

The director of health approved of the change after consideration of the fiscal year 2012 redemption rate of 77% and evaluation of the current deposit beverage special fund balance.

“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,” said Health Director Loretta Fuddy. “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.”

Officials said that without the fee increase, the program would go underfunded in 2014, and would beunable to continue operations.

State law requires the container fee to increase from one cent to 1.5 cents per container if the redemption rate exceeds 70%, unless the director of health, in consultation with the state auditor, determines that a fee increase is not needed.

A decision to postpone the fee increase was made in each of the last four years based on the ability of the program to continue operations by drawing down existing reserve funds.

The statewide redemption rate from July 1, 2011, to June 30, 2012, was 77%; the rate for the previous year was 76%.

Distributors registered with the state were sent a notification letter of the planned changes earlier this week.

Since its inception, the HI-5 program has recycled more than 4.71 billion containers.  Officials say more than 690 million containers were recycled in the last fiscal year, helping to significantly reduce litter and conserve resources.