NYC could raise $222 mln by taxing sugary soda

NEW YORK Fri Feb 12, 2010 4:25pm EST

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NEW YORK Feb 12 (Reuters) - New York City could raise $222 million a year from a proposed new tax on sugary soft drinks, a move that could encourage people to switch to healthier beverages, a fiscal monitor said on Friday.

The Independent Budget Office of the City of New York said the new tax could be set at half a cent per ounce of soda.

That is about double a rate New York state's Democratic Governor David Paterson proposed in the $136 billion state budget plan he issued in January.

Paterson's proposal for the state was met with protests from New York bottlers and vendors. Last year, the state legislature rejected a similar tax hike proposal.

New York City Mayor Michael Bloomberg, who this year added a crackdown on the over-use of salt to his public health agenda, has supported the governor's soda tax plan.

A mayoral spokesman had no immediate comment on whether the city should adopt the budget office's proposal and impose its own tax on sugary sodas, which have been linked to obesity. Bloomberg would need the state's permission for a new city soda tax.

About 35 percent of adult New Yorkers are overweight, 22 percent are obese and 9 percent have diabetes, the Independent Budget Office said.

Massachusetts Democratic Governor Deval Patrick also proposed an 8 percent sales tax on sugary sodas.

In response to the tax proposals, Coca Cola (COKE.O) has launched the Coca-Cola Civic Action Network, a nonpartisan group that urges "education not taxation" on food and beverages: www.nofoodtaxes.com/.

New York City's Independent Budget Office issues an annual report on ways the city could cut spending and raise revenue.

The new soda tax was one of nine new suggestions; there are 63 proposals on the agency's list, which includes ones that have been repeatedly rejected by lawmakers, such as making motorists pay tolls to drive over city bridges and tunnels that are currently free.

The other new ways it proposed helping close the city's multibillion deficits over the next few years include: abolishing city-wide runoff elections, replacing 450 police officers with civilians, and doubling the fee for a civil marriage ceremony to $50. The report's web site is: here

Though Wall Street's troubles have cost the city hundreds of millions of dollars of tax revenue, Bloomberg on his weekly Friday WOR radio show repeated his opposition to raising taxes, such as the personal income tax, which he said could drive people to move away.

(Reporting by Joan Gralla; Editing by Andrew Hay)

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