Legislature discards soda tax
Dispute over proposal persists
April 05, 2010
The Senate and Assembly both rejected a proposed tax on sugar-sweetened beverages after the beverage industry relentlessly protested against it over the past few months.
Although both houses of the Legislature excluded the proposed tax from their budget resolutions, negotiations with the governor over a final 2010-2011 budget are pending, and the ultimate decision will be known after an agreement is reached.
An anti-tax petition drive organized by the New Yorkers Against Unfair Taxes took place in the Bronx March 30 in Fordham-Bronx Park and last Wednesday in the South Bronx. The state health commissioner, health officials and doctors were perturbed that beverage lobbyists dared to petition in an area that has the state's highest obesity rates.
State Health Commissioner Richard Daines responded in astonishment to the petitions and said "the beverage lobby has the audacity to bring their fight against the sugary beverage tax to a borough that has the city's highest obesity rate and highest rates of sugar beverage consumption. In the Bronx 68 percent of the adults are obese or overweight and have high rates of diabetes and other obesity-related diseases."
The tax, proposed in Gov. David A. Paterson's 2010-2011 Executive Budget, would be expected to raise $450 million in 2010-2011 and would be dedicated to health care spending.
Daines, who practiced medicine in the Bronx for more than 20 years, said he has observed the detrimental effect obesity has on the lives of Bronx residents. Daines said the tax would help encourage Bronx residents to make healthier choice and reduce obesity-related health consequences.
According to the Department of Health, 11 percent of Bronx residents have diabetes, a disease linked to obesity that can lead to further health complications.
The anti-tax petition drive is expected to culminate on April 12 with the delivery of all petitions to state lawmakers in Albany.
The petition drive followed The New York State Conference of Teamsters and the New York State Automatic Vending Association's demonstrations in Albany, where they appealed to lawmakers to reject the tax.
The Teamsters held a rally on March 23 against the tax. Chanting "No more taxes" and "Save my job," Teamster leaders and representatives from the beverage industry, Pepsi Co. and Coca-Cola Co. were present to describe how the tax would hurt their industry and force them to cut their workforce.
"The tax proposed by Gov. David Paterson is the wrong fix," said James P. Hoffa, Teamsters general president. "Not only does soda tax hurt consumers, it will hurt small businesses and result in further job loss."
"The upstate economy is already suffering, so a new tax that kills jobs and hurts working families is the last thing we need. The Legislature has done the right thing to reject this tax, and I know the Teamsters will not forget their support," said Ron Lucas, president of the International Brotherhood of Teamsters Joint Council 46, representing upstate New York.
"Taxes don't change habits," said Kevin Flood, vice president of the New York Unit of Coca Cola Enterprises Inc. "This is not the right time for more taxes." Flood said the soda tax would affect small businesses more, especially those that rely on the beverage industry, making it harder for them to compete.
At an event held by the Automatic Vending Association in The Well of the Legislative Office Building on March 25, beverages and snacks available in vending machines were given out as Mike Esposito, president of the association and legislators spoke against the proposed tax and called for a unified protest until it is rejected.
Sen. Diane Savino, D-Staten Island, who opposes the tax, said, "We have uniformly come to the conclusion that this tax is a bad idea."
Dismissing the argument that the tax would help decrease obesity, Savino said more emphasis needs to given to primary and preventive care instead of "picking people's pocket in an attempt to fight childhood obesity."
The New York State Healthy Eating and Physical Activity Alliance released a study on March 24 that calculated the percentage price increase on popular sugar-sweetened beverages. The alliance's study states that beverage industry intentionally misinterpreted the price increase if the tax is imposed.
Nancy Huehnergarth, director of the alliance, said "Big Beverage and its front group, New Yorkers Against Unfair Taxes, know very well that the proposed penny-per-ounce soda tax will not increase the price of sugary beverages by 50 percent across the board as they've been claiming in ads, press releases and meetings with legislators."
"How much tax consumers pay as a percentage of cost will depend on which product they purchase and how much of it they buy. The tax was designed to encourage consumers to decrease consumption of sugar-sweetened beverages, and that's why large containers of soda such as the 2-liter (68-ounce) bottles would have the highest percentage increase," said Huehnergarth.
The penny-per-ounce tax would apply to drinks with more than 10 calories for every 8 ounces and those containing less than 70 percent fruit juice. It would also apply to powdered drink mixes.