In Fight For Soda Tax, Stakes Getting Bigger

Jul 29, 2014

Two years ago, Vermont’s House Committee on Health Care became the first legislative panel in the country to approve a tax on sugar-sweetened beverages. The vote triggered a massive response from the beverage industry, which poured more than $600,000 into advertising and lobbying aimed at killing the measure.

“We really got outspent, big time,” says Tina Zuk, director of government relations for the American Heart Association. “I think we got outspent 80-to-1.”

The effort succeeded, and the bill died after a close no-vote in the House Committee on Ways and Means. But Zuk says the financial playing field is about to get more even.

A grant from the Robert Wood Johnson Foundation will fuel the best-funded push yet for the soda tax. Combined with some other smaller grants, advocates will have nearly a quarter-million dollars to work with as they press for a 2-cent per-ounce excise tax on sugar-sweetened beverages.

“And we need whatever we can to start counter-marketing in the way that it was done with the tobacco industry,” Zuk says.

Jim Harrison, head of the Vermont Retail and Grocers Association, says comparisons of soda to cigarettes are “egregious,” and overstate the public health threat posed by drinks like Coke and Pepsi. Harrison says the tax will do more to drive retail business across the border than it will to dent soda consumption.  

“Once we cross the line and start taxing food and beverages, we’re going down a very dangerous, in our estimation, slippery slope,” Harrison says.

Peter Sterling, co-chairman of the group that spearheaded the push for the soda tax in 2013, says comparisons to tobacco are apt.   

“We are on the exact same path I believe where tobacco was in the 1970s and '80s,” says Sterling, who now heads a group pushing for single-payer health care. “People knew it was a public health threat, they weren’t quite aware that a tax was a policy lever used to decrease consumption.”

"Once we cross the line and start taxing food and beverages, we're going down a very dangerous, in our estimation, slippery slope." - Jim Harrison, Vermont Retail and Grocers Association

The push for the sugar-sweetened tax comes as lawmakers prepare to embark on a landmark debate over how to fund single-payer health care, and to curb rising medical costs. Sterling says the soda tax will become an attractive revenue option to legislators looking for ways to accomplish both.

“Half of Vermont’s Medicare and Medicaid expenses today are due to obesity, and the scientific literature is conclusive that excess consumption of these sugary beverages is the number one driver of obesity,” Sterling says. “So I think it’s fairly safe to say that if we can even reduce the consumption of these beverages by 10 percent, we will save the state of Vermont a significant amount of money.”

The Vermont Campaign for Health Care Security – formerly headed by Sterling – will oversee the soda tax campaign. The organization has hired Anthony Iarrapino, a former clean water advocate with extensive Statehouse lobbying experience, to direct the effort.

The composition of the legislative committees to which Iarrapino will make his case next year are subject to the outcome of the November elections. But the soda tax enjoys the support of some powerful House lawmakers, including Calais Rep. Janet Ancel, the Democratic chairwoman of the House Committee on Ways and Means.

"Anyone whose job it is to think about how to improve public health, we have them on our side on this." - Peter Sterling, co-chairman of the group that spearheaded the push for the soda tax in 2013

Prospects for the tax are shakier in the Senate, but Iarrapino says he thinks the urgency of the health care debate will reshape lawmakers’ perspective. The 2-cent per-ounce tax would raise an estimated $36 million annually - a drop in the bucket compared to the $2 billion lawmakers will need to generate if they want to replace private insurance premiums with a taxpayer-funded revenue stream for health care costs.

But Iarrapino says the decrease in medical expenses that would accompany a drop in soda consumption means the proposal would yield more than the sum of its revenues.

“With Vermont poised to lead the nation toward single-payer health care … it only makes sense to maximize the revenue potential of an important precedent-setting public health initiative like this,” Iarrapino says.

Iarrapino and Sterling say the push for the soda tax will also benefit from the support of influential public health organizations – the Vermont Association of Hospitals and Health Systems and Fletcher Allen Health Care among them – that have come out in favor of the plan.

“Anyone whose job it is to think about how to improve public health, we have them on our side on this,” Sterling says. “And I think that’s probably the real reason we’re going to end up succeeding.”

The group faces its biggest obstacle in Gov. Peter Shumlin, who has long opposed the soda tax.

“Every time we ask big policy questions we also have to ask the question, ‘are we asking the folks who make the least money to pay the highest tax?’” Shumlin says. “And in the case of the soda tax, I would argue we are.”

The tax would apply to any beverage with added sugar, including products like Gatorade and Vitamin Water.