US: In selling Maine's Fresh Waters, Does Maine Get a Cut?

This scenic stretch along Route 26, near where the first water of Poland Spring was discovered and later marketed as restorative, offers a slice of quintessential Maine: towering pine trees, pristine waters, and distant crests. In other words, all the images on the bottled water company's logo.

But these days, instead of evoking Maine's tranquil forestland and waterways, the brand symbolizes a battle over who owns and controls the water that seeps into the state's permeable rock.

A Maine group has launched a citizen's initiative to impose what is believed to be a first-in-the-nation tax on the water that companies extract and sell from the state's aquifers. It's on pace to be placed on the ballot next fall.

As the market grows for bottled water, already a $10 billion industry, the group maintains that access to water is among the most pressing issues of this century, and that the windfall reaped by bottling companies should be more evenly distributed. After all, they say, water belongs to everyone, and more controls would ensure sustainability.

But critics worry that the initiative unfairly targets Poland Spring, the largest bottler in the state. Some worry the move will push the company out and leave hundreds of unemployed in its wake. Others say the initiative could set a precedent for "use taxes" that could have a ripple effect on any number of industries.

"This is going to hurt Maine an awful lot," says Henry Shaw, a resident of St. Albans who operated an independent water company that he sold to Poland Spring two years ago. "Water is big in Maine. It's gotten bigger, and it's going to get smaller real quick."

The initiative was shepherded by James Wilfong, a former legislator who also served in the Small Business Administration in international trade under President Clinton. To Mr. Wilfong, water in Maine is as valuable a commodity as oil elsewhere, and residents should be rewarded for the investments they have made to keep their water sources clean.

Dubbed H20 for ME, the group's 20-cent-per-gallon tax would apply to only those companies that extract more than 500,000 gallons a year for containerized resale. They looked to an Alaska fund for guidance, in which oil extraction fees are put into publicly owned trusts. Funds from such a trust in Maine would be invested in the state's future, Wilfong says.

"Water flows under everyone's ground," he says. "It's like a farmer having a tractor in his front yard, and a neighbor comes and starts to drive it away, and you say, 'Hey, at least pay me for that.' "

Up to 10 companies could potentially be affected, but Poland Spring, which draws 500 million gallons of water a year from Maine, would be hardest hit. Poland Spring's parent company is Nestlé Waters North America. Its natural resource manager for the Northeast, Tom Brennan, says that the impact of a $100 million tax per year would exceed their profit and could drive them out of state.

Already, Poland Spring has suspended plans to open a third bottling plant while the tax initiative looms. "It represents a threat to about 600 people [employed by Poland Spring] and their families," says Mr. Brennan.

Those kinds of concerns have residents like Mr. Shaw worried. "If this does happen, people are going to dump their bottles and get out of state," he says.

Wilfong says that in gathering the more than 50,000 signatures required to get the issue on the ballot, some residents expressed concerns about lost jobs. But they also expressed concern that the state's legislation on ground water and sustainability seems unclear. "While the state has good water-quality standards, it has poor ground-water policies," he says. "We don't have any definition for sustainability."

Now state election officials will review the signatures collected to determine whether the issue will make it to the ballot next year.

Some in the state have asked whether the emphasis on sustainability is relevant, since the state water supply is replenished every year, by about 1.5 billion gallons.

"In New England, we have more precipitation than we can use," says John Peckenham, interim director of the Senator George J. Mitchell Center for Environmental and Watershed Research at the University of Maine in Orono. He questions whether the move could set precedents for other water users, such as mill or dam owners.

Some in the industry feel unfairly targeted. Stephen Kay, spokesman for the International Bottled Water Association, says bottled water accounts for less than 1 percent of all water extracted from the ground. Irrigation represents a far greater portion. "All users should be treated equitably," he says.

Many say the debate in Maine has less to do with the state of water and more about the growing pains of a company that has exhibited stunning success. In 1980, Poland Spring was bankrupt. Twenty-five years later, the employee pool has ballooned to 600 and operations continue to expand.

The ballot initiative comes as Poland Spring has proposed more pumping stations, searched for new water sources, and added more trucks. More vehicles are disdained by Scott Gamwell, a resident of Fryeburg, where Poland Spring is proposing a new pumping station. He says more than 50,000 of them already barrel through their rural community every year. "It is not appropriate for a town our size," he says. "This is not the town I've lived in for the past 20 years."

• 183 Environment
• 187 Privatization