Seattle voters rejected a 20-cent fee for every paper or plastic bag they get from supermarkets, drug stores and convienence stores.
With about half the ballots counted in the all-mail vote, the bag fee was failing 58 percent to 42 percent in Tuesday's primary.
City leaders had passed an ordinance to charge the bag fee, which was to start in January. But the plastics industry bankrolled a referendum to put the question to voters in Tuesday's election.
Plastic bag makers have lobbied hard to defeat the fee, outspending opponents about 15 to 1.
"I'm not particularly optimistic about the outcome of this vote," said Rob Gala, a spokesman for Seattle Green Bag campaign, which backed the fee. "But this campaign is about much more than just one decision of the voter. It's really about raising the awareness of voters, and we've really accomplished that."
Supporters argue the fee would encourage more reusable bags, cut down on pollution and waste, and reduce greenhouse gas emissions.
Also in Seattle, unpopular Mayor Greg Nickels was narrowly trailing two challengers in his bid for a third term. Sierra Club activist Mike McGinn has a slim lead with 27 percent of the vote. Cell phone executive Joe Mallahan has 26 percent, while Nickels has 25 percent. The top two finishers will advance to the November electon.
Nickels, while prominent nationally for his initiatives to make the city greener, has been dogged locally by criticism of a sometimes heavy-handed style and of the city's response to a December snowstorm that paralyzed Seattle for nearly two weeks.
The election was held entirely by mail, with ballots postmarked on Tuesday considered valid, so close races could remain unresolved until next week.
Observers predicted that a failure for the bag fee in an eco-conscious city like Seattle, such proposals would be an even tougher sell elsewhere.
"I don't agree with it, period," said Myrna Peterson, 68, of Seattle, as she dropped off her ballot Tuesday afternoon. "It's expensive. It's uncalled for."
Jim Reitz, 38, a Seattle cable technician, said he was torn on the issue. He supports the concept and initially planned to vote for the measure, which would add the 20-cent fee at about 575 stores in the city. He ultimately voted against it Tuesday, saying he didn't have confidence in how the city would manage the money it raised.
The city has said it expected to collect $10 million in annual revenue. Under the ordinance, small stores would keep the entire 20-cent fee. Stores with gross sales of more than $1 million a year keep 5 cents, and the rest goes to city recycling and environmental education programs.
A SurveyUSA poll conducted for Seattle TV station KING and released Monday found 45 percent of 644 likely voters would vote for the bag fee. The poll had a margin of error of plus or minus 4 percentage points.
"We are the underdog," said Heather Trim, toxics program manager for the nonprofit People for Puget Sound, who supports the fee. "We're hoping there will be a surge of young voters. All the polling shows we're behind going in, but you never know. It's the first all mail-in ballot."
The plastics industry's aggressive campaign against the fee is part of a national campaign to stave off bag restrictions.
In California, bag manufacturers successfully sued cities that banned plastic bags.
Several states from Colorado to Texas to Virginia debated bag bans or fees this year, but no statewide ban or fee has been enacted. Washington, D.C., passed a 5-cent fee on paper or plastic bags, and the Outer Banks region in North Carolina banned plastic bags this year. But New York City dropped a proposed 5-cent bag fee in June, and Philadelphia rejected a plastic bag ban.
In Seattle, the Progressive Bag Affiliates, an arm of Virginia-based American Chemistry Council, has given the bulk of money to defeat the bag fee.