Bill targets industry that embraces recycling

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By Stephen Key

For the second consecutive year, Rep. David Wolkins, R-Winona Lake, wants to slap a tax on newspaper publishers.

But this year, only publishers of daily newspapers would be targeted by his newsprint “fee.”

H.B. 1234 would tax every ton of newsprint used by a publisher who prints a newspaper at least five days a week. The tax would be $25 a ton, but it would be reduced by $25 for each ton of newsprint used that has at least 40 percent recycled fiber content.

To gauge the potential impact, let’s look at two Fort Wayne Newspapers publications (Journal Gazette and News-Sentinel), since they are the largest daily newspapers near Wolkins’ hometown. According to the most recent recycled newsprint survey HSPA performed for the Indiana Department of Environmental Management, the two Fort Wayne newspapers used 10,615 tons of newsprint in 2005.

Virgin newsprint accounted for 44 percent of that tonnage. That’s 4,671 tons taxed at $25 a ton, or $116,775.

To try and mitigate that amount, we look at the 5,944 tons of recycled newsprint Fort Wayne Newspapers used. Unfortunately, the average recycled fiber content of that newsprint is 39 percent, a tick under the 40-percent threshold.

If each of those recycled newsprint tons was 39 percent, Fort Wayne gets no relief and each is taxed at $25, or $148,600.

The combined “fee” for both virgin and recycled newsprint would be $265,375.

If half of the recycled newsprint contained 41 percent recycled fiber and the other half was at 37 percent recycled fiber content, Fort Wayne could subtract the above 40 percent tonnage from an equal amount of tonnage not meeting that goal. The offset would reduce Fort Wayne’s tax to that covering the virgin newsprint used, or $116,775.

Now let’s look at The Herald in Jasper. That newspaper used 582 tons of newsprint, all of it recycled.

Oops, the average recycled fiber content from the paper mill they used was only 22 percent, so every ton gets the tax. The bill from the state of Indiana would be for $14,550.

Wolkins’ concern is legitimate. According to the Environmental Protection Agency, newspapers comprise up to 13 percent of the space in U.S. landfills. Wolkins’ bill would put the tax into the state’s Solid Waste Management Fund, which provide grants and loans to promote recycling and the use of recycled materials, waste reduction, and management of yard waste and household hazardous waste.

Indiana newspapers share the goal of reducing the amount of newspapers that go into landfills.

My concern is the selectivity of his tax efforts.

According to the EPA, only lead-acid batteries surpass the 88 percent recycled recovery rate of newspapers.

Why tax an industry that is so successful in having its product recycled?

The EPA reports that containers and packaging make up the largest portion of solid waste generated in the United States at 33 percent. Nondurable goods, which include newspapers, account for 24 percent of the waste, followed by yard trimmings at 13 percent.

H.B. 1234 doesn’t tax any of the products you find on the shelves at Walmart, packaged in cardboard and plastic, even though packaging accounts for one-third of waste generated.

H.B. 1234 doesn’t tax any of the millions of Hoosiers who cut their grass, trim bushes and pick up sticks that have fallen from their trees, even though that accounts for as much landfill space as newspapers.

The Indiana Department of Environmental Management was so pleased with the efforts of state newspapers to increase the use of recycled newsprint that it asked HSPA to stop conducting a survey every other year on recycled newsprint.

Does this sound like an industry that should be singled out for a killer tax?

Stephen Key is executive director and general counsel of HSPA.