Coalition opposes R.I. soda tax

Local food- and beverage-industry groups are stepping up efforts to defeat state legislation that would tax soft drinks despite state health officials’ arguments that it could reduce rampant childhood obesity.
Six industry organizations have formed Rhode Islanders Against Beverage Taxes and launched a website, nobeveragetaxri.com, in hopes of creating a groundswell of opposition to two House bills and a Senate bill that would levy 5-cent to 10-cent taxes on sugared drinks in cans or bottles such as soda, sweetened teas, sports drinks and punches.
The opposition is casting the tax as an effort that threatens hundreds of jobs and is more about plugging gaping budget holes than health concerns.
The American Beverage Association (ABA), a national group that is part of the local coalition, has paid for radio commercials characterizing the so-called soda tax as another financial burden on consumers already struggling to make ends meet in a sputtering economy.
“What’s next? Are they going to tax sugar-covered cereals?” said Steve Arthurs, president and CEO of the Rhode Island Food Dealers Association, which counts supermarket chains Super Stop & Shop and Shaw’s Food Stores among its members. “You don’t know where it’s going to end.”
But R.I. Department of Health officials are backing the measures, saying it would be a step in reducing the state’s obesity problems, particularly among children.
Health department spokeswoman Annemarie Beardsworth said the agency’s statistics show that one out of every five children entering kindergarten in Rhode Island is obese. And over the last 10 years, she said, the number of people suffering from Type 2 diabetes has climbed 60 percent, she said.
Similar taxes on products that lead to unhealthy habits – such as with cigarettes – have shown to be a deterrent, Beardsworth said.
Local health officials understand the concerns of the industry groups, she continued. But “our responsibility is to promote healthy lifestyles, choices and behaviors,” she said. “This is not going to solve childhood obesity, but it is a piece of the puzzle.”
The idea of taxing sugared drinks isn’t unique to Rhode Island, particularly as governments grapple with growing budget problems.
New York Gov. David Paterson proposed a penny-per-ounce tax in his budget package this year. California lawmakers are considering a tax of 1 cent for every teaspoon of sugar in soft drinks. And in Philadelphia, city officials are mulling a 2-cent-per-ounce levy.
Washington, D.C., city council members dropped a proposal for a penny-per-ounce tax for soda earlier this year. Now they are considering a proposal to make soft drinks subject to sales tax. In the state of Washington, officials will impose a two-cents-per-can soda tax starting July 1. The American Beverage Association has considered mounting a repeal campaign.
Meanwhile, ABA spokesman Christopher Gindlesperger said numerous other states have considered but rejected similar soda-tax measures, including New Hampshire and Connecticut.
“It’s a money grab on the part of the government, and people are seeing right through it,” he said.
Rhode Island is garnering attention from industry officials in part because there are three proposed measures in the legislative pipeline, each with slight differences.
So far, the House Finance Committee has held a hearing for one – H-7368, submitted by Rep. Edith Ajello, D-Providence – that would impose a 5-cent tax on bottled or canned soft drinks up to 20 ounces, and 10 cents for anything larger. Diet drinks would be exempt, but the tax would apply to sugared drinks containing less than 50 percent natural fruit or vegetable juice.
Ajello’s measure would send the tax revenue to the cities and towns where the sales took place. The Finance Committee has yet to take action on the bill.
A measure submitted by Rep. Rodney Driver, D-Richmond – H-8120 – would tax soft drinks at the same rate, but place the revenue in the state’s general fund. And a similar bill – S-2779, submitted by Susan Sosnowski, D-South Kingstown – would leave the tax rate up to the individual cities and towns, but not to exceed 20 percent.
The beverage industry employs nearly 900 people in production and distribution in Rhode Island and another 6,170 retail workers have jobs dependent at least in part on drink sales, according to the ABA.
Arthurs said a beverage tax would cut significantly into sales at stores along the Massachusetts border. Right now, bottled and canned soda costs more in the Bay State because of a 5-cent redemption charge. With the proposed Rhode Island tax, “it would go the other way,” Arthurs said.
Gindlesperger said sweetened drinks have caught an unfair amount of the blame for the nation’s obesity problem. Soda sales are down 12 percent in the last decade, but the United States’ weight problem has grown, he argued.
He also cited a National Cancer Institute study indicating that soft drinks make up 5.5 percent of the average person’s daily caloric intake.
“A soda tax won’t even make a dent in obesity,” he said. •