Bills would raise tax on sugary drinks
By HUNTER BISHOP
Tribune-Herald staff writer
Lawmakers are eyeing a new tax on soda and other sugar-sweetened beverages again this year in an effort to raise revenue and curb obesity in Hawaii.
Big Island Sens. Josh Green of Kona and Russell Ruderman of Puna co-sponsored Senate Bill 646, submitted, Jan. 18 that would tax sweetened beverages in sealed containers at the rate of 1 cent per teaspoon of sugar, which would amount to about 15.5 cents on a single 20-ounce bottle of Coca-Cola.
Meanwhile, the state Department of Health is crafting an administration bill that would also tax sweetened beverages. The administration’s bill hasn’t been submitted yet, said a spokeswoman for Gov. Neil Abercrombie on Tuesday.
Hearings and testimony have not been set for either bill, yet opposition is already mounting to any attempt to raise the price of sweetened beverages.
Ruth Limtiaco of the Honolulu public relations firm Limtiaco Company, issued a press release last week on behalf of the “No Hawaii Beverage Tax Coalition,” which she said represents 340 businesses and 2,300 individuals statewide. Limtiaco said the proposed legislation fails to address the cause of obesity and unfairly burdens beverage drinkers with the increased cost.
Limtiaco said the coalition was responding not to the Senate proposal, but to Abercrombie’s intent to unveil a new tax proposal for sugared drinks.
“Everyone knows that obesity is a complex issue requiring a holistic approach that involves healthy and sensible eating and more exercise,” said the coalition’s press release. “Taxing beverages is a tactic that takes our eye off the real problem and hits consumers directly in the pocketbook at the grocery store.
“Calories in the American diet from added sugars in soda have dropped nearly 40 percent since 2000,” Limtiaco said. “In addition, calories from soda and other sugar-sweetened beverages make up just seven percent of the American diet. So it makes no sense to target this industry as the culprit for a growing obesity problem.”
Although the press release does not mention taxes, the coalition’s website rails against the proposed new sweetened beverage tax, calling it discriminatory, regressive, bad for consumers and bad for the economy. “Lawmakers should trim their own wasteful spending—and leave our grocery budgets alone,” said the NHBTC site.
The Senate bill, also co-sponsored by Sens. Maile Shimabukuro and Clarence Nishihara, both of Oahu, would set aside a percentage of the tax collected for unspecified “community health centers” and a “trauma fund,” but the amount going into each fund, and the remaining amount specified to go into the state general fund, were not yet written into the proposal.
The Senate bill says taxing soda will lead to a reduction in overall consumption, according to a study published in the Archives of Internal Medicine in March 2010. The study found adults who drink one or more sodas or other sugar-sweetened beverages each day are more likely to be overweight or obese, and that an 18 percent tax on soda could cut daily intake by 56 calories per person, resulting in a weight loss of five pounds per person per year.
The Senate bill would impose a 1 cent per teaspoon of sugar in sugar-sweetened beverages, about $2.40 more for a case of 24 12-ounce cans.
However, the bill would not just target soda. Beverages sweetened with “any caloric substance that humans perceive as sweet,” including sucrose, glucose, fructose, other sugars and fruit juice concentrates, sold in a closed, sealed container, would be subject to the tax.
Green, a Kona physician, is chairman of the Senate Health Committee, which deferred a similar bill last year for further study.
A task force appointed by the governor issued a report in July, but Abercrombie was still reviewing the report on Tuesday, said Janice Okubo, spokeswoman for the state Department of Health. Later Tuesday she said the bill and the report would be posted online.
“This a critical public health question for states all across the country, especially with childhood obesity and diabetes rates on the rise. I think it is important to look at every different variable that contributes to diabetes and obesity and to address them professionally,” Green said.
Limtiaco said she realizes the government is looking at increasing revenue, but the tax on sugared drinks is not a good way to get it. “The real issue is a healthy diet and the lack of exercise, exacerbated by all the digital toys we see our kids with.”
Although she said the bill would affect jobs, Limtiaco added that the beverage industry wouldn’t necessarily lose business since it also markets many low- and non-caloric beverages.
While the state Department of Health is crafting an administration bill, the governor did not mention the beverage tax in his State of the State speech Tuesday in Honolulu, leading some observers to speculate privately that the measure is not a priority in the governor’s administration.
Green said his concerns stem from the public health question: “Should soda be examined because it contributes to obesity?” The financial aspects of the bill, he said, “I leave to the Ways and Means Committee. I focus on health, because that’s where my expertise is.”
But Green said the costs of diabetes-related treatments cost the nation $300 billion a year. “We pay now or we pay later. If (the bill) decreases consumption, it may be beneficial.
Green was still uncertain whether he would hear his own bill in the Senate Health Committee, however. “I wanted it out for discussion. It’s important for people to weigh in.”
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