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HomeNewsArchivesOPPONENTS SAY 'TWO CENTS' TAX NOT WORTH IT

OPPONENTS SAY 'TWO CENTS' TAX NOT WORTH IT

June 25, 2003 – "Wicked" is what St. Croix businessman Noel Loftus called the two-cents-a-pound "environmental fee" passed last week by the Legislature.
"We're talking about bureaucracy, ineptness and no public hearings," Loftus said.
The Senate approved the measure — which the governor had proposed as a "tax" but the lawmakers chose to rename a "fee" — as a way to generate revenue for the cash-strapped territory.
Whipping off figures, Loftus said he calculates that the tax would increase the cost of groceries for a family by about $500 to $600 a year. "Milk will go up by 16 cents a gallon," he said.
The St. Croix Environmental Association's executive director, Bill Turner, called the measure a tax against the poor. "The person who is buying macaroni and cheese is really getting pounded," he said.
While grocery costs will rise because businesses paying the tax will pass the expense on to customers, the construction industry will take a bigger hit.
Cement, steel, lumber and sheetrock are exempt from the tax, but many other materials go into building a home. However, Colette Monroe, chief researcher for Sen. Louis P. Hill, said that sand and gravel are also exempt, although they do not appear on the list of exemptions in the bill.
Loftus estimates the tax would add $40,000 to $50,000 to the price of a home on St. Croix, which has the lowest building costs in the territory. And he predicted that his business, the Floor Specialist, will close within a year because people will shop for their floor tiles in Puerto Rico or on the mainland to avoid the tax.
He also predicted that two out of the three concrete companies on St. Croix will be out of business by year's end if Gov. Charles W. Turnbull allows the bill to become law.
Sen. Almando "Rocky" Liburd, who voted against the bill, said it was not well thought out and would hurt the very people the senators are supposed to protect. He said if there is a move to repeal the tax, he will join in.
Turner is upset that while the measure is pegged as an "environmental tax," the money will go into the General Fund. The bill calls for the money to go to the V.I. Waste Management Authority once such an entity is established. Turnbull has been trying from early in his first term to get the Legislature to approve the creation of such an authority.
Turner thinks it's more like if a Waste Management Authority is established than when. And should the authority come into existence, he said, it would only be another layer of bureaucracy.
He said the "environmental fee" does not distinguish between enterprises that add to the waste stream and those that do not. He said that lumber, which will be heavily taxed because of its weight, will last for 30 years when used in a house. However, candy bars, which will have only a minuscule tax, have wrappers that end up almost immediately in the landfill.
Monroe said that the tax is fair to all. "There's no other option, and this is a fair deal," she said. She said if residents had to pay tipping fees to get rid of their waste, it would cost them more. And this way, tourists will pay part of the cost since they buy things like candy bars.
She said the tax on potato chips will run $.0001 — that's one-hundredth of a cent — per bag.
According to the bill, the Internal Revenue Bureau will collect the tax.
"I assume it will be a small line on an excise form or a line on somebody's form," Monroe said.
Loftus said that shippers will be burdened because containers often come packed with both business and personal goods. They will then have to sort the goods so they know which ones must be taxed.
The bill has not yet been sent to Government House for Gov. Charles Turnbull's action. He has 10 days after it arrives to approve it, veto it in whole or in part, or let it become law without his signature.

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