Khalil 1

Ghadir Khalil

Comp 105

Talking About Sustainability

November 14, 2017

Taxing Water Bottle Companies

One important issue regarding the environment that the state of Michigan is

experiencing involves taxing large companies on the water bottles they produce.

Specifically, Peter Lucido, a republican state lawmaker, introduced the Michigan

Bottled Water Excise Tax Act on October 18, 2017 (Ellison). The goal is to impose a

5-cent per gallon fee on each bottled water operator engaged in the business of producing

bottled drinking water in this state" (H. 5133, 2017). Lucido also stated that the tax

would only apply to drinking water used by bottling companies and would not apply

to water withdrawn and sprinkled back into the ground. By doing so the state would be

able to use the revenue to fund infrastructure projects and compensate Michigan for the

loss and sale of a natural resource (Ellison). Lucido also, believes that were giving our

resources out for free and that these companies are making a financial killing off our

water and this bill will help eliminate this problem. After all, based on the information

provided thus far, I believe that taxing large water bottle companies for producing water

bottles would be a proper way for the state to address and pay for certain infrastructure

and environmental issues.

This new bill has sparked some controversy especially with the water company

Nestl. Specifically, Nestl has been known to pay a $200 annual paperwork fee per

facility -in Michigan- but does not pay a tax or royalty on its extraction [of water]
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(Ellison). However, Lucido explains, the proposed tax would end up costing Nestl

more than $20 million a year under its present extraction rate of 1.1 million gallons of

water per day. Nestl fought back by citing the company's in-state economic benefit

through employment and purchasing [and indicating] that bottled water accounts for a

small percentage of total water use in Michigan (Ellison). It is also important to

acknowledge however, that, before the bill was announced, chief sustainability officer

for Nestl Waters North America, Nelson Switzer, said that if Michigan were to consider

a tax, [theyd] be very pleased to be able to sit down and discuss what pricing policy

might make sense (Ellison). These two responses allow me to understand that even

though Nestl was once considering adopting a new tax, the possibility of them agreeing

to this new bill is now very slim. However, it is obvious that this bill will accumulate a

large amount of money for the targeted budget and have positive change within

communities since an estimated $20 million will come from just one water company.

Furthermore, Nestls subordinate brand, Ice Mountain, has made environmental

groups concerned that an increase in the amount of water pumped from the ground might

produce harmful environmental effects overtime. In other words, Ice Mountain is a spring

water brand so, it must be sourced from a spring aquifer [which] are shallow and

connect to the surface, greatly raising the potential for the withdrawal to impact local

lakes, streams or wetlands (Ellison). These harmful effects will most likely going be

prevented with this bill because water companies will most likely limit the amount of

times they extract water from the ground if they have to pay for it. On the same note,

large bottled water companies can pump groundwater for free as long as the high

volume pumping does not harm the environment or dry up neighboring wells (Elliott).
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This makes it very clear that these companies already have leeway when it comes to

when and how much water they are allowed to extract from the ground, in fact, I believe

that the extraction process should be monitored to prevent these companies from

poaching our water, as mentioned by Lucido. This point also makes it important to

recognize that if bottled water companies begin paying for extracting water and

producing water bottles, there will be a great amount of profit that will be going into

solving environmental and infrastructure issues; as mentioned by Lucido bottled water

tax revenue could be a steady funding source to help upgrade and maintain [for

example] the state's aging water and sewer infrastructure.

All in all, I suggest that Lucido carries through with this bill. For one, large water

companies take advantage of what is given to them by extracting millions of gallons of

water daily. Since the process is easy and basically free, these companies are only going

to increase the amount of times they extract water, which in turn will leave negative

effects on the environment overtime. For these reasons, I believe taxing these companies

will allow them to limit the amount of times they extract water or (if they continue

extracting water at the same rate) help fund environmental and infrastructure issues. In

addition, this process (if executed efficiently) will not just pose as a way to solve

infrastructure and environmental issues, but also possibly generate new ways to address

and prevent them. Moreover, I suggest that Lucido and the water companies negotiate to

make the bill suitable for all those involved as well as help this process operate as

smoothly as possible. Overall, it is important for Lucido to have enough supporters and

evidence to get this bill passed and not have it seem as an attack on large water bottle

companies but simply a way to help different communities within the state of Michigan.
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Works Cited

gellison@mlive.com, Garret Ellison |. Bill would hit Nestle with $20M annual state bottled

water tax. MLive.com, MLive.com, 18 Oct. 2017,

www.mlive.com/news/index.ssf/2017/10/michigan_bottled_water_tax.html.

Peter Lucido. Michigan Bottled Water Excise Tax Act. http://www.legislature.mi.gov, 17

October 2017,

http://www.legislature.mi.gov/documents/2017-2018/billintroduced/House/pdf/2017-

HIB-5133.pdf. 10 November 2017