LOS ANGELES (Reuters) - A California lawmaker introduced legislation on Thursday that would tax sodas and other sugar-sweetened drinks and use the proceeds to bankroll programs to fight childhood obesity.
The bill, introduced by Democratic Senate Majority Leader Dean Florez, would slap a 1-cent levy on every teaspoon of added sugar and other caloric sweeteners in commercial beverages sold.
The tax would be paid by companies that bottle soda and make finished beverages or syrup for fountain drinks, sponsors said.
Initial projections from the California Center for Public Health Advocacy estimated the excise tax on beverage distributors could raise $1.5 billion a year, with funds going directly to cities and schools to pay for childhood obesity prevention programs throughout the state.
California has been a pioneer of public health initiatives — it was the first state to pass menu-labeling rules and implemented bans on artery-clogging trans-fats in restaurants and on soda sales in public schools.
Bill Dombrowski, president of the California Retailers Association, said the bill introduced by Florez was more about raising revenue than improving health.
“We view it as the first of what’s going to be a series of attempts to raise revenue by the state, given its current budget crisis.”
Cash-strapped California isn’t the only state turning to soda taxes as the U.S. economy remains weak.
New York Gov. David Patterson, also a Democrat, for the second year in a row has proposed taxing sugary soft drinks.
The American Beverage Association, whose members include Coca-Cola and numerous Coca-Cola bottlers and Kraft Foods, and its allies have strongly, and thus far successfully, opposed efforts to tax soda.
Critics say soda taxes demonize some industries, hurt business, threaten an already weak economy and place an unfair burden on low-income shoppers.
Public health advocates are increasingly vocal in their calls for taxes on soft drinks and other sweetened beverages to offset obesity-related medical costs and to fund public health efforts.
Obesity rates have soared among U.S. children, along with rates of early heart disease, including high blood pressure, high cholesterol and type 2 diabetes. Nearly a third of U.S. children currently are obese or overweight and likely to stay that way for their entire lives.
Obesity-related diseases account for nearly 10 percent of all medical spending in the United States, or an estimated $147 billion annually.
The American Heart Association last year recommended that Americans dramatically cut sugar consumption. The group took aim at the estimated $115 billion U.S. market for soft drinks, which researchers said represented the No. 1 source of added sugars in the American diet.
But, so far, industry is winning the battle.
A soda tax was considered as an option to help pay for U.S. health care reform, but was quickly dropped.
California in 1991 introduced the first snack tax in the United States to help eliminate its budget deficit. The tax legislation was unclear — it applied to doughnut “holes” but not whole doughnuts and salted crackers but not those without salt.
It was unpopular, causing such an uproar that it was repealed a year later.
Reporting by Lisa Baertlein, Editing by Chizu Nomiyama and Dan Grebler