State treasuries around the country are seeking new ways to fill their coffers as federal funding is scaled back, creating a variety of issues of concern to food retailers.
In a recent series of regional meetings among Food Marketing Institute and state industry associations around the country, that topic manifested itself in many ways, Pat Davis, vice president of state government relations at Arlington, Va.-based FMI, told SN.
“There were a myriad of topics that came up around how states are trying to do more with less and collect less federal assistance,” he said, noting that state solutions to budget deficits often involve increasing taxes and fees.
According to FMI, the Center on Budget and Policy Priorities noted that 29 states have already projected shortfalls totaling $44 billion for fiscal year 2013, which begins July 1, 2012.
Among the revenue-generation ideas that are being considered by states, Nevada and Texas are considering a bottled-water tax, and Michigan, Minnesota and Utah are considering a gas tax.
Davis said states are discovering that the proliferation of fuel-efficient vehicles are using less gas and therefore generating less gas-tax revenue, leading to considerations of potential new taxes on electric cars and hybrids and the expansion of toll roads.
“The gas tax no longer covers what is needed to keep highways, bridges and other infrastructure fully repaired and in usable condition,” he explained.
Another issue that has come up in states around the country is what he called “Main Street fairness,” or a new tax on Internet-based sales the would put e-tailers on more even footing with their bricks-and-mortar rivals, while also generating more revenues for state treasuries.
Last year several states agreed with Amazon to collect sales taxes, and this month Indiana and Amazon reached an agreement to begin collecting the state’s 7% sales tax from customers in 2014. That is expected to generate an additional $75 million to $250 million in revenue for Indiana, FMI said.
Other revenue-generating ideas have come disguised as environmental legislation, David noted, including plastic-bag bans and fees and increased bottle deposits.
“The fees and taxes and bans are more and more prevalent, as governments have to cope with financial stress,” he said, noting that Massachusetts is considering including all bottles up to a gallon in size, including water bottles, under its deposit law.
Allowing wine sales in supermarkets is also an issue in several states, and FMI is currently wrapping up a study it commissioned to measure the impact of allowing wine to be sold in supermarkets. Currently 16 states place restrictions on wine sales in supermarkets, and Davis said the topic “is a big issue” in those states.
States are also coping with requirements of some new federal legislation, including the Patient Protection and Affordable Care Act of 2010, which requires states to establish health care exchanges.
Retailers are also pushing for the distribution of Supplemental Nutrition Assistance Program benefits throughout the month, rather than on a single day, Davis said. However, he said such efforts run into challenges because while multiple SNAP distribution days are more cost-effective for retailers, they are costly for the states to implement.
In addition, FMI said a “handful” of waiver requests and legislative efforts to ban certain products from the SNAP program are expected in 2012.
Davis said FMI also is putting together some best practices for state associations to share related to emergency preparedness, modeled on the New Jersey Food Council’s efforts in the wake of the weather disasters that took place in 2011.
“They were right there in the bunker with state officials, and as result they were able to get delivery trucks on the road to supply the key products that were needed,” Davis explained.
