A tax on sugary drinks?

LINCOLN — Get ready for a debate on sugar-sweetened drinks in Nebraska.

The Nebraska Medical Association — armed with studies that link childhood obesity with consumption of soda pop and sugary energy drinks — wants to remove the sales tax exemption on such drinks at grocery stores, convenience shops and vending machines.

It's part of a national trend to remove tax incentives — or enact higher taxes — on sugary drinks, for public health reasons.

And it'sgetting opposition from lobbyists for the soft drink industry.

Dr. Bob Rauner, a Lincoln physician, said there's no good reason to give pop and energy drinks such as Rockstar the same tax exemption provided to grocery items in Nebraska.

“We're one of the few states in our area that considers Coca-Cola as food,” Rauner said. “We don't think it should be given favorable tax status like home mortgages.”

Colorado recently adopted higher taxes on soft drinks and candy as a way to address the state's budget woes and concerns about obesity.

The State of Washington passed a similar tax, designed to last three years, to help resolve its fiscal problems. The District of Columbia also recently passed a tax on soda pop.

In Iowa, sales taxes are levied on certain candies as well as on carbonated and noncarbonated soft drinks such as cola, ginger ale and root beer, according to the Iowa Department of Revenue website.

Nationally, such taxes have inspired fierce lobbying efforts by the beverage industry, which maintains that its products are being unfairly targeted when there are a number of causes of obesity.

“As an industry, we have been working with schools to make changes to what is provided to young people. And we've made progress,” said Lincoln lobbyist Don Wesely on behalf of the Nebraska Beverage Association.

Wesely pointed to an American Beverage Association report saying that, through a collaboration with the American Heart Association and the William J. Clinton Foundation, shipments of full-calorie soft drinks to schools nationwide have been reduced by 95 percent since 2004.

The calories in those drinks also have declined by 88 percent, according to the report.

Wesely said that shows the problem is being dealt with. He pointed out that removing the sales tax exemption would be a tax increase.

Lifting the exemption on soft drinks in Nebraska would generate an estimated $10 million to $30 million in new revenue.

Gov. Dave Heineman has said that he opposes any tax increases to deal with the state's budget gap, which has reached $751 million.

Heineman said he also opposes removing the sales tax exemption on soft drinks.

“It just sounds to me like another tax increase so we can spend more money,” he said.

The answer to obesity is education, Heineman said, and taking personal responsibility to eat healthful foods and to exercise more — not by taxing soda pop.

At least one state senator said taxing pop and candy might be a good thing.

“Would you classify that as food? Do you need that to survive?” asked Sen. Rich Pahls of Omaha, who has advocated taking a comprehensive look at all sales tax exemptions.

Rauner is chairman of the public health committee for the Nebraska Medical Association and director of a Lincoln effort to fight childhood obesity.

He said he expects the beverage industry to mount an aggressive, well-funded counterattack, based on arguments of fairness and “no new taxes.”

“The beverage industry's tactic is to switch the debate,” Rauner said. “There's no question that they're part of the problem. If the debate is about obesity, they don't have a leg to stand on.”

Nationally, obesity rates have doubled in the United States since 1980.

Two-thirds of U.S. adults are now considered overweight or obese, according to the federal Centers for Disease Control and Prevention. In Nebraska, the obesity rate stood at 26.6 percent as of 2008, according to the CDC.

Childhood obesity rates are harder to determine, Rauner said, but in Lincoln, about 16 percent of elementary school children are considered obese.

Rauner said the medical association is still seeking a lawmaker willing to introduce a bill in the 2011 session that would remove the sales tax exemption on soft drinks. Wesely said he doubted that one would be found.

A similar effort fizzled in 2005, when lawmakers opposed a measure by Sen. Arnie Stuthman of Columbus that would have required schools to sell only healthful snacks and drinks in vending machines.

This time, removing the tax exemption on soda pop would provide revenue that could be used to increase funding for schools or to help balance the state budget, Rauner said.

“It's not like the beverage industry is struggling right now, but the state is.”

Contact the writer: 402-473-9584, paul.hammel@owh.com

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