A large number of these jobs would be in the bottled water manufacturing sector, plus many more jobs in supplier and ancillary industries.
Current US Bureau of Labor Statistics indicate that one out of five private sector jobs has disappeared in Michigan since 2000 – a drop of 783,000 jobs (-19.6%).
Nearly 25% of all private sector job losses in the US have occurred in Michigan during this period – the highest rate of any state. Michigan has consistently led the nation in yearly job losses during Governor Granholm’s administration.
The vast majority of bottled water companies in Michigan and throughout the US are small business; family-owned companies of 5-10 employees with annual sales of $1-10m. These are local entrepreneurs with deep roots and strong ties within their community. The severity of Cherry’s bottled water tax proposal could severely disadvantage most of these small companies against their out-of-state competitors.
It appears that the governor’s bottled water tax proposals will focus only in-state groundwater withdrawals, raising the question as to why companies that are using Michigan municipal water sources for manufacturing food products, bottled water, sodas, beer and other beverages are treated differently.
Bottled water companies use extremely small amounts of groundwater. In fact, the Drinking Water Research Foundation reports that a mere 0.02% of groundwater is withdrawn in the US annually by bottled water companies. Lt Governor Cherry also seeks to strip property rights from Michigan businesses, which is contrary to already settled law and long-standing precedent.
“The bottled water industry has a long history in Michigan of working with the Executive Branch, the Legislature and others on sound and equitable laws and public policy, and we have often gone the extra mile in accepting additional industry-specific regulations as a show of good faith and desire to remain economically viable in Michigan,” said Joe Doss, president and CEO of IBWA. “IBWA’s active involvement in helping to support Senate Bill 857, which established criterion for permitting for large groundwater withdrawals (enacted in 2006) and helping to pass the Great Lakes Compact is proof of that.”
John Cherry’s proposed tax on bottled water also attempts to circumvent the 35-year-old Michigan prohibition on taxing the sale of food products. In1974, the voters of Michigan approved an amendment to the state constitution that exempts food products from any sales or use tax.
Bottled water is a food product regulated by the US Food and Drug Administration and the state of Michigan. Therefore, on top of posing serious damage to Michigan’s economy, Cherry’s proposed tax would be unconstitutional.
The new tax as proposed would raise the cost to consumers for a 24-pack case of bottled water by $2.40. This price hike would place an additional financial burden on struggling Michiganders who purchase bottled water to help them stay hydrated and refreshed.
Bottled water is a safe, healthy, convenient product that doesn’t contain sugar, caffeine and other additives that they may be trying to moderate or avoid. Higher bottled water prices may also cause some Michigan consumers to purchase their bottled water from neighbouring states.
Michigan bottled water businesses are already strained in the current economic crisis – a tax on their products will only add further strain. Furthermore, the bottled water industry has a long history in Michigan of coming to the aid of those in distress during incidents when bad weather, floods, fires and other events have prevented municipal water systems from providing clean, safe drinking water.
For bottled water to be available in emergency situations, there must also be a viable commercial marketplace that supports its production. Reducing the commercial viability of bottled water could seriously threaten its availability during emergency situations in Michigan.
Source: IBWA
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