Gretchen Schaefer
202.833.7311
Consumer Products Use Subsidizes California 's Department of Pesticide Regulation
Products not usually considered pesticides end up financing the majority of DPR's operating budget
SACRAMENTO (June 20, 2003) – An independent study released today confirms that fees on some consumer products (including household disinfectants, disinfectant cleaners and household pest management products) finance more than 50% of costs associated with the California Department of Pesticide Regulation's (DPR) budget. The study, conducted by Sjoberg Evashenk Consulting of Sacramento , was sponsored by the Consumer Specialty Products Association (CSPA), a national trade association in Washington , D.C.
“For years, we believed that fees paid by our members in California have exceeded the actual dollar amounts necessary to process the consumer products registrations and regulatory efforts conducted by DPR,” stated CSPA President Christopher Cathcart. “This study confirms that the current mill tax rate for consumer products is already too high and certainly should not be increased. While we may not agree with the state's efforts to totally fund regulatory agencies with fees, at the very least those fees should not exceed the agency's costs to regulate any category of products.”
The Sjoberg Evashenk study found that current DPR fees on consumer products far exceed the cost of its registration and regulatory activity for those products. It is estimated that consumer products generate approximately $900,000 per mill, hence the study put the cost of DPR activity to regulate consumer product as 10.8 mills. The current assessment is 17.5 mills, and budget proposals currently under consideration by the California Legislature would increase it to 27 mills or higher.
“A number of California and national companies share the burden of the consumer products mill tax that will ultimately be paid by California consumers,” stated Laurie Nelson, lobbyist for CSPA. “Legislators and the governor need to be cognizant of these ‘hidden taxes' that are being suggested through various budget proposals because all Californians will be the ones paying the price.”
The goal of the study was to determine DPR's effort (registration and regulatory tasks) related to consumer products as opposed to agricultural and industrial products. It found that DPR's regulatory efforts represent approximately 69.8 percent of its overall activity, but only 20.24 percent of those efforts are related to consumer products.
Any consumer product that disinfects or sanitizes and all household pest management products are regulated at both the federal and state level. These products are classified as pesticides and must be registered with the U.S. Environmental Protection Agency and each state in which they are sold. In California, companies currently pay a $200 per product pesticide registration fee as well as a special assessment known as the mill tax (currently 17.5 mills or 1.75%) on all pesticide sales.
The study illustrates that the mill tax is a major source of DPR funding, and estimates the consumer products industry pays more than 53 percent of the total DPR mill tax revenue.
Cathcart concluded, “Current budget subcommittee proposals suggest increasing the mill tax for consumer products from 17.5 mills to 27 mills, with two mills designated for a farm worker outreach program. Since each mill raises approximately $1.8 million, our industry would end up not only subsidizing the DPR budget, but also making a substantial contribution to a totally unrelated program. This increase will burden us with millions of dollars of additional costs.”
