Tax on bottled water could raise $100M

An answer to Maine’s current fiscal woes might be inside your office water cooler, according to one former state lawmaker.

Jim Wilfong, a Stow businessman and former state representative, has proposed -with some legislative support, he says – a 20-cent-per-gallon tax on bottled water.

The tax would be paid by companies that bottle and sell water from the state’s aquifers, producing $100 million in new state revenue – a return on Maine taxpayers’ investments in clean water over the years, Wilfong said.

“This is a public resource, a public asset, and the citizens have worked to protect it,” said Wilfong, who likened the tax to a 12.5 percent levy on oil drilled in Alaska. “Why should we just let the water go for free?”

The proposal, floated as the state works to close a $128 million Medicaid shortfall in the fiscal 2005 budget, nonetheless was met with consternation by the governor’s office.

“The governor welcomes any input, but because of the T-word it’s not an option,” said Lee Umphrey, a spokesman for Gov. John Baldacci, who on Wednesday vowed to veto any tax increase. “We need to find other solutions.”

Bottled water companies in Maine were even less enthusiastic about the idea, which they said unfairly targeted the industry while allowing others such as paper mills to use the water for free.

“It seems unusual to single out one user in one of Maine’s few growing natural resource industries,” said Jane Lazgin, a spokeswoman for Maine-based Poland Spring, the nation’s best-selling brand of spring water.

Poland Spring, which has plants in Poland and Hollis, is licensed to withdraw 500 million gallons of water each year, said Lazgin, although it typically withdraws 25 percent less to better sustain its supply.

A version of the plan would exempt companies from paying the tax on the first 250,000 gallons they withdraw each year.

Nevertheless, officials at the relatively tiny Mount Desert Spring Water in Southwest Harbor dreaded the thought of a new tax.

“That’s outrageous,” said Gary Scillia, the company’s manager, who predicted the levy’s devastating effect on the business, which uses only about 500,000 gallons a year. “I’m just going to have to pass it on to my consumer and it’s just going to cost me business.”

Wilfong said he would seek to introduce the plan as an emergency bill this legislative session. Otherwise, he would begin collecting signatures to put the matter out to voters in a citizen-initiated referendum.

Under the plan, half the revenue would be dedicated to K-12 education, and much of the remainder would go into a revolving fund to help young entrepreneurs start businesses.