Bill would tax soda to fund Neb. health programs

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Associated Press

Posted on March 16, 2013 at 9:04 AM

Updated Saturday, Mar 16 at 9:04 AM

LINCOLN, Neb. (AP) — The beverage industry and health activists went head-to-head Friday debating whether to tax soda to support health programs.

Lincoln Sen. Bill Avery pitched his proposal and asked the Legislature's Revenue Committee to include his bill in a tax commission study. Senators also discussed Friday creating a tax commission, which would allow lawmakers to research state tax laws and recommend updates.

Avery said Nebraska should tax soda even though the state doesn't tax groceries. He said the bill is an effort to reduce childhood obesity by providing a portion of the more than $11 million generated by the tax for health programs annually.

The bill faces an uphill battle and will likely not be considered this year. Gov. Dave Heineman does not support raising taxes, and Avery said the governor views his bill as a tax increase.

Omaha Sen. Burke Harr, a member of the Revenue Committee, said the Appropriations Committee members made it clear during Friday morning floor debate that they do not like when senators tell them how to distribute funds from a tax. That's the Revenue Committee's job, Harr said.

Avery said it just doesn't make sense that Nebraska taxes soda from a fountain at a gas station, but not a 12-pack of pop. He said 35 other states, including all neighboring states except Wyoming, tax soda.

"This is a tax loophole that subsidizes an industry that contributes to obesity," Avery said. "If it contributes to bad health, it ought to be taxed."

Schools and health programs supported the bill, saying the extra funding could greatly help health initiatives that are already working.

University of Nebraska at Kearney professor Kate Heelan supported the bill, saying it would help fund research on student fitness and overall health. Under the bill, UNK would receive $500,000 per year from soda tax revenue to continue researching student health issues.

UNK has been recognized for its efforts to track health data on students. Heelan presented evidence that obesity rates have decreased by 22 percent since 2006 in Kearney Public Schools.

Kearney has been seeing a decrease in obesity since the district started implementing health programs and tracking health data. Heelan said 12 percent of children in Kearney are obese today, compared to the 17 percent child obesity rate nationally.

Dr. Bob Rauner of the Nebraska Medical Association said if Nebraska could get the lower obesity rates like Kearney, it would save about $113 million per year in health costs spent on obesity each year. He also said sales tax on soda would not impact consumption.

"We are not picking on pop," he said. "The exemption just makes no sense."

The Nebraska Beverage Association, Nebraska Grocery Association, Nebraska State Chamber and farming groups opposed the bill.

Wayne Parks, president of the Nebraska Beverage Association, said pops sales have been declining, while obesity rates continue to climb.

"Singling out one particular product for taxation isn't going to make a difference in a problem as complex as obesity," he said. "If Nebraska citizens want to get serious about this obesity problem, we need to encourage balanced diet, sensible consumption of all foods and beverages, and promote more physical activity and exercise for all citizens."

Steve Ford, CEO of LinPepCo and past chairman of the Nebraska Chamber of Commerce, said he opposed the bill because taxes will not make people healthier.

"We cannot tax our way to better health," Ford said.

Kathy Siefken of the Nebraska Grocery Association said the group thinks taxing an individual product is bad tax policy. She said taxing just one product would be difficult for grocery stores because the stores would have to identify which sugary beverages to tax. She added if the soda tax were to pass, it would create government programs that would continue coming back for more government funding.

"We don't need the government to step in and punish us via tax," she said.

Carl Sousek, chairman of the Nebraska Corn Growers Association, said corn farmers would be negatively impacted because they create high fructose corn syrup, which is a sugar ingredient added to soda pop. He said the tax would reduce demand for soda.

In closing, Avery said the opponents' claims are false and have no merit. He said he and other supporters are not saying soda causes obesity, but that it may contribute to it.

Avery added that the tax would not put anyone out of business.

"It seems to me that people who are opposing this legislation are continuing to mislead and misrepresent the issue," he said.

"Thirty-five other states have seemed to figure out how to do this, but Nebraska can't do it?" Avery continued. "The grocery association would absolutely collapse if they have to do something like this? That was one of the most absurd arguments I heard."

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The bill is LB447.

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