SEATTLE -- When Washington state passed a tax on soda and other sugary beverages in April, it seemed like momentum was building nationally for a new kind of tax, reported The Washington Post. Washington's law, which imposes a tax of 2 cents for every 12 ounces of soda, came on the heels of similar actions in Maine and Colorado.
Politically, the soda tax seemed to pack a perfect one-two punch. It raised revenue in a year when states like Washington were facing enormous budget deficits. And it offered a response to the growing problem of obesity, especially among [image-nocss] children.
Now, the beverage industry has momentum flowing in the opposite direction. Its lobbyists quashed every other state effort to pass a soda tax this year, including bills in Mississippi, New Mexico and New York state. In Washington state, an industry-funded initiative to repeal the new soda tax appears certified to go before voters on this November's ballot. Its sponsors turned in 395,000 signatures, much higher than the 240,000 required.
The American Beverage Association (ABA) is supporting the campaign for Initiative 1107 by funneling money to its Washington state branch, which relies on Pepsi and Coke's Northwest bottling warehouses for most of its revenue. ABA spent more than $1 million just gathering signatures to get the initiative on the ballot. Sandeep Kaushik, a spokesperson for the coalition of children's health groups who advocated for the soda tax, expects the industry to pour as much as $10 million into the election.
In every state where a soda-tax plan has been proposed, it has been met with opposition from the beverage industry, the report said. The tactics are unique to each state, but the message is usually the same: Don't lay the blame for obesity solely on soda.
That message already has worked in Maine. Two years ago, the Maine Legislature passed a soda tax of 42 cents per gallon of soda. The revenues were marked to go toward a state health care program. Last November, the soft-drink industry thwarted the effort with its "Fed up with Taxes" campaign, a ballot initiative that successfully encouraged voters to reject the tax.
In Washington state, the debate began in February when Governor Chris Gregoire proposed a 5-cents-per-can tax on carbonated drinks, which was expected to raise $94 million, in a year when the state was facing a $2.8 billion budget gap. She also proposed repealing a tax exemption for soda syrup. But the plan stalled in the Legislature and soon was gone without a public hearing or vote from either chamber.
During an April special session, Gregoire proposed the soda tax again. This time, she scaled it down to 2 cents for every 12 ounces of soda, and put a 2012 expiration date on it. With the budget situation still pressing, the plan received more support.
The plan, however, included some wrinkles that have become crucial to the beverage industry's fight to overturn it, said the report. Besides soda, the tax applies to candy, as well as some locally processed foods such as canned chili. The beverage industry's campaign included the tagline, "Stop the tax hikes on food and beverages."
The beverage industry sees taxes as taxes, the report said. Robert Gara, a spokesperson for "Yes on 1107," is counting partly on the sheer complexity of the new levies as motivation for voters to overturn them in November. An example: Butterfinger candy bars are taxed but Milky Way bars are not. This is because Milky Ways contain flour, and flour is classified as food, which has been exempt from sales taxes since the 1970s.
A recent University of Washington poll found that the state's residents favor the taxes by a slim margin, leaving a lot of leeway for both sides to change those numbers.
"Yes on 1107" is gearing up plenty of reasons for voters to disapprove the levies.
"This bill was adopted late one afternoon without any public hearing or public input," Gara said, according to the Post. "Those conversations were done behind closed doors."
But perhaps his most convincing argumentone stressed in every state that defeated similar increases this yearwill be the realities of the state's economic environment. "Fundamentally it's not a good idea to be raising taxes," Gara added. "It hurts an already poor economy."
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