Soda Tax Proposal Appears Likely to Fizzle

Soda tax unlikely to pass in state Senate.

By Grace West
|  Monday, Mar 15, 2010  |  Updated 4:30 PM EDT
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Soda Tax Proposal Appears Likely to Fizzle

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The propsed tax would add a penny per ounce to the price of soda and sugary drinks, and is estimated to generate a $1 billion annual revenue.

A widely debated tax on sugary drinks again appears unlikely to pass in the New York State Senate.

For the second year, Governor Paterson proposed a tax on soda and sugary drinks in his budget plan, which he dropped last year after strong opposition against it.

Supporters, including Mayor Bloomberg, have been pushing for the tax as a way of killing two birds with one stone -- saying that it would reduce consumption of sugary drinks, and thus curb obesity and the medical costs associated with it, while providing funding for state health programs.

“In these tough economic times, easy fixes to our problems are hard to come by,” Bloomberg said in his weekly radio address last week. “But the soda tax is a fix that just makes sense. It would save lives. It would cut rising health care costs. And it would keep thousands of teachers and nurses where they belong: in the classrooms and clinics.”

But the tax is not expected to draw the minimum 32 votes needed for its passage. Currently, there is a 31-30 Democrat-Republican split in the chamber.

Opponents of the tax argue that it would not improve public health, but would harm businesses, cost jobs and hit low-income residents harder.

The American Beverage Association, which includes Coca-Cola Co, PepsiCo Inc and Dr. Pepper Snapple Group, has continued to oppose the tax.

The proposal would add 1 cent per ounce to the price of soda and sugary drinks with less than 70 percent fruit juice, and is projected to reduce consumption by 15 percent. Bloomberg said that the estimated $1 billion annual revenue would be directed to the health care budget and would also benefit education.
 

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