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April 13, 2017

Lawmakers hesitant on so-called ‘soda tax’

A proposal to tax certain sweetened beverages at a rate of 1 cent per ounce is being met with opposition from many Republicans on the Finance, Revenue, and Bonding Committee, who say the bill would place another burden on the state’s residents.

The tax would apply to certain carbonated and non-carbonated nonalcoholic beverages that contain added caloric sweetener, and the money raised would go toward a variety of education and outreach programs associated with public health.

Proponents who testified during Tuesday’s public hearing on the measure said the tax has the potential to raise about $145 million in state revenue annually.

Dr. David Katz, the director of Yale-Griffin Prevention Research Center, equated the adverse health effects of sugary drinks with those of tobacco products, arguing the beverages should be taxed similarly.

“In both cases the products are irrefutably linked to major public health harm,” he said, adding that there is a large financial burden attached to diabetes and obesity.

Sen. Terry Gerratana, D-New Britain, who joined Katz during his lengthy testimony said 25 percent of the state’s adults are obese, and children are facing the same threat.

Katz added that certain populations have these products specifically marketed to them.

“There have even been charges rather akin to profiling in the preferential marketing of potentially harmful products to particular communities,” he said, adding that the tax is “an attempt to level the playing field.”

Numerous Republican committee members, including Sen. Len Suzio, R-Meriden, expressed concern that people participating in the Supplemental Nutrition Assistance Program, or SNAP, are using their food stamps for soft drinks and other sugary beverages.

He said he would prefer an attempt to limit public funds that could be used to purchase those products, rather than implementing a tax.

Rep. Gail Lavielle, R-Wilton, said the tobacco tax had a similar intention regarding how the revenues would be spent, but the state did not stick to its plan. She said she is skeptical that lawmakers can abide by the proposal to use the money from a soda tax to assist programs such as the Care 4 Kids program.

“I don’t, today, have a reason to believe that the legislature can be trusted to do that with funds used for this purpose,” she said, adding that if the argument in favor of the proposal is based on raising money, “the whole thing falls apart for me.”

Rep. Holly Cheeseman, R-East Lyme, agreed.

“Politicians view revenue like crack cocaine,” she said. “Once they get it, they’re never going to give it up and they’re going to use it for whatever they want.”

Cheeseman added that after a similar bill was passed in Philadelphia, the city’s soda sales dropped by 50 percent. Because of that, she said she believes “the revenue projections are highly overrated.”

Kevin Dietly, principal of Northbridge Environmental Management Consultants, spoke on behalf of the American Beverage Association and also questioned the accuracy of the revenue projections.

He added the tax could result in as much as a 68 percent price increase for some products and when factoring in deposit and sales tax, that number jumps to 79 percent.

“That’s absurd,” Dietly said, adding that about a third of the tax would be paid for by households that make less than $40,000 per year. “That’s a seriously regressive tax.”

With the potential impact to sales, which proponents say is the point of the tax, Dietly estimates that Connecticut retailers, many of which are small businesses, would lose about $160 million per year in sales.

He added that since there already is no deposit charge in Rhode Island, many would cross the border to purchase all of their groceries, not just sugary beverages.

“There would be a lot of repercussions to this,” Dietly said.

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