Soda Tax in Doubt (Again) As CT Legislative Session Nears Conclusion; Study Finds Sales Drop When Prices Climb

In February, USA Today suggested that “Connecticut may become the first state in the country to tax sugar-sweetened beverages if Gov. Ned Lamont has his way.”

The publication was referring to the proposed a 1.5-percent-per-ounce tax on sugary drinks, which was expected to generate $163.1 million for fiscal 2021, if enacted.  With two weeks remaining in the legislative regular session, and budget negotiations reportedly within sight of their goal, the tax may be left behind.

If it fails to gain sufficient support, it would not be surprising.  In fact, Governing magazine – another national publication keeping an eye on the proposal – reminded its readers a month ago that “no state has passed a soda tax since 1992.”

Statewide taxes on sugary drinks have been proposed in California, Massachusetts, New York, Rhode Island and Vermont, according to the National Conference of State Legislatures (NCSL). None have become law to date, and opposition from the American Beverage Association has been unrelenting, including the launch of a website in Connecticut supported by 80 “community partners” – small businesses particularly attuned to the price of beverages (grocery stores, pizza restaurants, mini-marts, etc.) from across the state.

“Soda companies and the powerful American Beverage Association (ABA) wage a perennial and expensive fight against taxes on their products nationwide,” Governing reported, even as “public health advocates continue to emphasize the benefits of soda taxes.”

A new study, published two weeks ago in the Journal of the American Medical Association, suggests taxing sugary drinks really can make people buy fewer of them, potentially translating to better public health, TIME magazine reported. The study examined the effects of Philadelphia’s decision to place an excise tax of 1.5¢ per oz. on sugar- and artificially sweetened drinks, starting January 2017, TIME reported. In the year after the policy went into effect, researchers found that sweetened beverage purchases dropped by 38% compared to the year before, translating to almost a billion fewer ounces of these beverages sold.

The study found that “implementation of a beverage excise tax on sugar-sweetened and artificially sweetened beverages was associated with significantly higher beverage prices and a significant and substantial decline in volume of taxed beverages sold. This decrease in taxed beverage sales volume was partially offset by increases in volume of sales in bordering areas.”

Since 1992, Philadelphia is among several municipalities across the U.S. have put similar taxes in place, including Berkeley, Seattle, and Boulder.  Arkansas, Tennessee, Virginia and West Virginia all impose statewide excise taxes on sugary drinks, according to NCSL.  A soda tax in Cook County, Illinois, which includes Chicago, was repealed in 2017, according to published reports.  The last state to enact one was Arkansas.

In 2017, a Politico-Harvard nationwide poll found 57% of respondents support taxes on sugary drinks to help health and education programs. It also found 39% were opposed to it.

Maritza Bond, health director for the city of Bridgeport, told CTNewsJunkie in April that “Bridgeport has the highest obesity rates in Connecticut,” noting that “sugary drinks are one of the single largest reasons.”  Dr. Sandra Carbonari, a Waterbury pediatrician, added that “The health problems this brings cannot be solved in a pediatricians office.” In addition to the often stated symptoms such as obesity and diabetes, there are issues such as dental decay, she pointed out.

Governing reported that the American Academy of Pediatrics and the American Heart Association describe sugary drinks as “a grave health threat to children and adolescents.” In late March, the pair of leading medical groups called on more governments to support taxes, warning labels and advertising regulations for the soda industry. 

“There are better ways to help reduce the amount of sugar people get from beverages than a tax that places an unfair burden on working families and neighborhood businesses already struggling with the state’s high cost of living," the American Beverage Association-backed Keep CT Affordable told The Hartford Courant in March. “It will hurt small businesses, coffee shops, gas stations and corner stores that will lose revenue and may be forced to cut jobs.”

In January, ABA persuaded a federal appeals court that a San Francisco ordinance mandating warning labels on soda advertising violated the First Amendment. In 2014, New York’s highest state court rejected former New York City Mayor Michael Bloomberg’s ban on large sodas. The Pennsylvania Supreme Court, however, upheld Philadelphia's soda tax last year.

A Connecticut law may not even reach a courtroom, if it fails to gain sufficient support among legislators.  The Hartford Courant reported last week that the proposal for a sugary beverage tax may be dropped as part of the ongoing budget negotiations, describing it as among the “most unpopular proposals at the Capitol this year.”