UPDATE 1-US school drink deal cuts sugar; NY mulls soda tax

* Shipments of full-sugar drinks to schools down 95%

* Plan replaces sodas with milk, water, juice

* New York leaders push for a soda tax (Recasts, adds detail throughout, changes dateline, byline)

By Michelle Nichols

NEW YORK, March 8 (Reuters) - A deal to sell healthier drinks in U.S. schools has slashed the amount of fattening beverages offered to students, former President Bill Clinton said on Monday as New York leaders pushed for a soda tax to tackle obesity and budget shortfalls.

Many health experts say non-diet soft drinks are a key source of excess calories in the U.S. diet and likely helping to fuel the obesity epidemic. Two-thirds of Americans, including one in three children, are overweight or obese.

An initiative by The American Beverage Association --including The Coca-Cola Co (KO.N), Dr Pepper Snapple Group (DPS.N) and PepsiCo (PEP.N) -- the Clinton Foundation and the American Heart Association has helped cut shipments of full-sugar soft drinks to schools by 95 percent compared with 2004, Clinton said.

"There's been a dramatic shift toward lower calorie and more nutritious beverages in schools," Clinton told a news conference. "It could lay the foundation for broader changes in our society."

Although the American Beverage Association said school drink sales make up less than one percent of the total market, Clinton said companies were not asked to forgo revenue, instead "we asked them to make money in a different way."

The guidelines allow 100 percent juice drinks, low-fat milk and bottled water in elementary and middle schools, and diet beverages and calorie-capped sports drinks, flavored waters and teas in high schools.

A report prepared by Keybridge Research LLC said that while the agreement had only been in place since 2006, its progress had been measured against figures from 2004 because that was the most recent data available for comparison.

Keybridge Research president Dr. Robert Wescott said in a statement: "The reduction of calories in schools is real and meaningful. The data truly speaks for itself."

OBESITY PLAGUE

To tackle broader consumption of soft drinks, California and Philadelphia have introduced legislation to tax soda and now New York Governor David Paterson and New York City Mayor Michael Bloomberg are urging state lawmakers to do the same.

Referring to the large numbers of obese and overweight Americans, Paterson told reporters on Monday: "It's not going to be on my conscience, I think we need a sugar tax."

Bloomberg said in a radio address on Sunday that taxing soda would raise nearly $1 billion to help plug the state's shortfalls in health care and education funding.

"And, at the same time, it would help us fight a major problem plaguing our children: obesity," he said.

The U.S. Institute of Medicine says local governments should consider zoning laws to limit access to junk food near schools, and CDC director Dr. Thomas Frieden supports taxes on soft drinks, as does the American Heart Association.

Speaking at Clinton's news conference on Monday, Susan Neely, American Beverage Association chief executive, said a soda tax would not solve "a complex problem like obesity."

Clinton declined to comment, saying: "It's dumb for me to get involved in (the tax) debate when I can save God knows how many kids lives by making other agreements."

The report on the initiative to cut the amount of sugary drinks sold in schools was unable to show if the changes meant children actually consumed fewer calories from the drinks available to them. But it suggested they bought fewer drinks.

And it echoes findings from the U.S. Centers for Disease Control and Prevention, which reported in October that a median of 63 percent of schools limited carbonated soft drinks in 2008, compared to 38 percent in 2006.

The Robert Wood Johnson Foundation and the Center for Science in the Public Interest both praised the results of the initiative, which is part of the Alliance for a Healthier Generation, but said more needed to be done.

"Children drink and eat an estimated 35 percent to 50 percent of their daily calories during school hours," said the foundation's chief executive Risa Lavizzo-Mourey. "Given the central role school plays in our children's lives, we must strive to make every school in the country a healthy school." (Additional reporting by Maggie Fox, Phil Wahba and Basil Katz; editing by Todd Eastham)