September 30, 2011
Assessing DC's Bag Tax
Posted by Lisa Fairfax

When it was enacted, I blogged about DC's bag tax law which went into effect in January of 2010 and charges customers five cents for each disposable bag they take at checkout.  After well over a year, several studies have emerged assessing the law's impact, with some conflicting results--perhaps reflecting the conflicts inherent in such a law.

On the one hand, at least one study suggests that the law is having a negative impact on DC's economy and jobs in the area.  According to the study, the law causes people to purchase fewer items and avoid shopping in DC, leading to a drop in sales and a corresponding drop in jobs.  The study also points out that the law has not generated the amount of revenue proponents projected, indicating that the revenue collected under the law will be at least $1 million less than expected.  To be sure, this revenue shortfall highlights a potential contradiction of the law--to the extent it successfully encourages reduction in bag use, one should expect a corresponding reduction in any revenues associated with that use.

Advocates of the law appear to insist that the law is a win-win for DC’s economy and environmental efforts.  First, such advocates question these negative studies not only because they fail to pinpoint any actual job loss, but also because they do not seem to account for other studies in which most business owners report that the law has either had no impact or a positive impact on their business.  Proponents also point out that business owners receive one cent out of the five cents collected under the law.  Second, advocates note that the law has led to significant reduction in bag use.  Hence, one study found that after the law's enactment, customers used 3.3 billion bags in one month, compared to an estimated 22.5 billion being used prior to the law taking effect.  Estimates of the overall reduction in bag use range from 50% to 80%.  And this reduction has an impact on bags found in the Anacostia River.  Hence, one cleanup agency reported a 50% drop in the number of bags found in the river, suggesting that the law is having its desired environmental impact of helping cleanup efforts at the river. 

Since the law's enactment I certainly have found myself using less disposable bags and more reusable bags.  There are also many times when I am buying a small number of items where I simply will not use a bag, and this is true both in DC and in places where there is no bag tax law.  So the law has changed my behavior and I was interested to know if it was having its desired impact--but perhaps that depends on your perspective about the desired impact the law was aimed at having.

 

Current Affairs, Economic Development, Environment | Bookmark

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