LANSING, Mich. – Lt. Gov. John Cherry wants to bring back the Michigan Promise Grant scholarship for 96,000 college students by charging a fee on companies that sell bottled water from Michigan.
“That water literally is owned by everybody in the state. … It doesn’t belong” to the bottlers, Cherry told reporters Monday. “This is just one proposal that will enable us to keep our promise to Michigan students despite the difficult times we’re experiencing.”
He estimates a $10-cent-per-bottle fee would raise around $118 million annually. That’s enough to reinstate the scholarship and provide money for wetlands regulation and possibly Great Lakes restoration, he said.
Deb Muchmore, a spokeswoman for Nestle Waters North America Inc., said the proposal would force Nestle to lay off workers and possibly move out of state. If the company can’t produce bottled water in Michigan at a competitive price, it will go elsewhere, she warned. It also is likely to pass the fee along to consumers.
“I don’t think there’s any doubt that Michigan taxpayers are looking for solutions to some of these really difficult issues,” she said. “But I don’t think they’re going to support singling out certain Michigan industries when it’s going to cost jobs and cost them more for products they enjoy.”
Nestle Waters vice president Brian Flaherty said in a release that the proposal was unconstitutional because the state constitution exempts food products from sales or use taxes.
But Cherry compared the bottled-water fee to the severance fee paid on oil extracted in the state, saying it’s not a sales or use tax. The water fee would be 10 cents regardless of the size of the bottle. If the fee does get passed along to consumers, it would mean that buyers in other states will help send Michigan students to college, he added. He wouldn’t apply the fee to companies that buy the water they bottle from municipal water companies.
