WASHINGTON (AP) — Thirsty for new sources of cash, health-conscious lawmakers in cities and states across the country are reaching for the refrigerator, proposing taxes on sports drinks, teas and soda.
Politicians say the taxes will help curb rates of obesity and diabetes and can pay for health programs. But retailers and the beverage industry say the taxes are unpopular, unfair and simply won't work.
Last year, federal lawmakers dropped a proposal to use a penny per ounce drink tax — an extra $1.44 for a 12-pack of soda — to help pay for health care reform legislation. In the year since, however, lawmakers in more than a dozen states and a handful of cities have become the new cola crusaders, proposing similar taxes either to plug budget gaps or fund new programs.
"It's really picked up since the federal fight," said Chris Gindlesperger, a spokesman for the American Beverage Association, which has opposed the taxes, saying they unfairly single out one product and don't change behavior.
Next week, the issue may be back in Washington. The city's governing body, the District of Columbia Council, is mulling extending the city's 6 percent sales tax to sodas and other sugary drinks, which are currently exempt, as part of budget negotiations. Previously Councilwoman Mary Cheh had floated a proposal for a penny-per-ounce hike, but other lawmakers opposed it.
The district isn't the only place to seize the idea of a tax. Approximately 30 states now apply a sales tax to soda. That includes Colorado, which extended its sales tax to cover the drinks as part of packages of new taxes in the past year. Washington state also started taxing soda this year.
Lawmakers in California, New York and Rhode Island are also considering separate drink taxes, like the penny-per-ounce tax initially proposed in Washington, D.C. Similar taxes were proposed but failed to pass in places such as Anchorage and Kansas.
According to one count by Kelly Brownell, director of Yale University's Rudd Center for Food Policy and Obesity and a supporter of a tax for nearly two decades, 17 states and three cities have proposed drink tax legislation in 2009-2010.
"The economy being in such terrible shape has raised the need for revenue, and what better way to raise revenue?" said Brownell, who said he believes drink taxes both reduce consumption and raise revenue for health programs.
Cheh, the councilwoman who proposed a tax in the district, said the idea made perfect sense to her. Her 1-cent-per-ounce tax was expected to generate between $6 million and $9 million its first year. Most of the money would have gone to promoting health programs in schools.
But Cheh said opposition from the beverage industry was too strong. Now the Council may consider a sales tax, though Cheh said that wasn't as attractive to her because it would "be too little" to change behavior and wouldn't be as obvious to consumers.
Ellen Valentino, who heads an area beverage association, said Cheh's original proposal would have made the city an outlier and hurt area retailers by driving shoppers into nearby Maryland and Virginia. Only two other states — Arkansas and West Virginia — have taxes specifically on soda, Valentino said.
As a result, Cheh's proposal was met by radio messages and full-page newspaper ads from local retailers. The council seems to have dropped the penny-per-ounce idea for now, though one member promised to hold a hearing later this summer on the issue.
For now, the Council could consider extending the sales tax to drinks when it votes on the budget next week.