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State May Tax Bottlers For Springs' Water

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By MARY ELLEN KLAS and GEOFF FOX

McClatchy Newspapers The Tampa Tribune

Published: March 6, 2009

LEE - In a rural North Florida town where the water tower bears the motto "Tiny but Proud," residents have a big secret: They give the cold, clear spring water that bubbles up from the aquifer below their soil to the nation's largest bottled-water company - for free.

Every day, Nestle Waters of North America sucks up an estimated 500,000 gallons from Madison Blue Springs, a limestone basin a mile north of town. It pipes the 70-degree water a mile to its massive bottling plant and distribution center, fills 102,000 plastic containers an hour, pastes on Deer Park or Zephyrhills labels, boxes it up and ships half of it out of state.

The cost to the company for the water: a one-time, $150 local water permit.

Like 22 other bottled-water companies in Florida, including giants Coca-Cola and Pepsi Co., Nestle's profit is 10 to 100 times the cost of each bottle.

Payment to the state? Not a dime.

Florida Gov. Charlie Crist wants to change that. He is proposing a 6-cents-a-gallon state tax on water used for commercial water-bottling purposes.

"It's a resource of the state and if you're going to withdraw it for a profit, we should charge you for that use," said Mike Sole, secretary of the Department of Environmental Protection, which has been developing Crist's proposal for six months.

Support In Zephyrhills

Crist's plan has enthusiastic support from Zach Arnold, 56, who can see another Nestle bottling plant from his Zephyrhills home.

"I think it's a wonderful idea," Arnold said. "The water plant shouldn't be getting anything free from us to start with. This is a Swiss-owned company. What's happened to the American-made world? That's one reason the economy is shot to hell now.

"I don't think taxation is enough. I think we should stop them from pumping the water out altogether. They get water from here and ship it all over the world. That water's not coming back into the aquifer. Where's our return?"

That's what Annette Brooks, president of nearby Crystal Springs Community Association, wants to know. She said it makes sense for "the company to be paying something" for water, but she doubted that Zephyrhills or Crystal Springs, a smaller community south of the city, would benefit. Nestle pumps from Crystal Springs.

"It depends on where all that money's going to go," she said. "Crystal Springs gets left out of everything. Our roads are horrible and there are no law enforcement officers out here. If that money's not going to help the city or county it comes out of, I don't care" about the tax.

Some states, including Vermont and Michigan, already impose user fees on bottled-water companies, while Massachusetts has begun debating a ban on extracting water for commercial uses.

The idea isn't completely new to Florida. In 2005, the state's House Democratic leader, Franklin Sands, proposed legislation imposing a fee on bottled water but the measure was killed in the state's Senate.

In Florida, the Department of Environmental Protection estimates the proposed fee would apply to about 5.4 million gallons of water a day - the amount it thinks is pumped from state springs and aquifers by bottlers that include Coca-Cola's Dasani and Southeastern supermarket chain Publix. The estimate does not include the water taken by bottlers from municipal water supplies.

The "severance fee" would be phased in to raise an estimated $56 million the first year, according to the governor's office. The money would be used to finance water projects, such as desalination plants and other alternatives to traditional water supplies.

If the fee is passed on to consumers, the cost of a pint-size bottle of water would increase by less than a penny.

New Approach

Prompted by Crist, it's a major shift in position for the department, which until December had collected no data on bottled-water use in Florida and takes a hands-off approach to its regulation. The Florida Department of Agriculture's Division of Food Safety makes sure bottlers have approval from local water-management districts to withdraw the water, but no state agency tests bottled water. Crist's proposal wouldn't change that.

Instead, Crist's plan would treat water like phosphate, oil or natural gas, all mined from the ground. Companies that extract those natural resources from which they profit pay fees or royalties to the state. Nestle and other bottled-water users say it is unfair to single them out from all the public and private water users.

"I don't see how we're different from the agriculture users which, just a few miles from here, have 30 irrigation pivots draining more water than we are," said Rob Fisher, who runs the Blue Springs plant and is director of operations for Nestle's Southwest region.

Bottled water "isn't a luxury, it's a choice," he argues, "and during times of natural disaster, it's a necessity."

Florida's dire economy has some Republicans also ready to change the rules on bottled water. State Sen. Evelyn Lynn, a Republican from Ormond Beach, has filed a bill to impose the state's 6-cent sales tax on bottled water at the point of sale.

A companion bill is being pushed by Rep. Michele Rehwinkle-Vasilinda, a Tallahassee Democrat. Economists say that if the state applies the 6-cent sales tax to every bottle of water consumed in Florida, it could raise about $42 million.

State Rep. Will Weatherford, the Wesley Chapel Republican whose district includes Nestle's Zephyrhills bottling plant, said he thinks the House will be less open to imposing new taxes on bottled water than the governor and Senate. "We want to be careful not to single out any industry."

In Zephyrhills, City Manager Steve Spina, views the tax as a hard choice that might have to be made. He said the water-bottling plant is the city's largest employer and taxpayer.

"We've got to do something in this state, and we can't all protect our own sacred cows," he said. "If everyone says, 'No, not me,' then we'll stay in the same mess we're in. You have to start somewhere."

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