A committee in the Connecticut General Assembly is considering a bill that would create a tax on sugar-sweetened beverages in the state.
HB 7314 was proposed this March to combat rising rates of obesity and diet-related health disorders, while also raising revenue for the cash-strapped state. Opponents of the bill have voiced concerns that it would disproportionately target the poor, but state Rep. Josh Elliott, D-Hamden, vice chair of the Finance, Revenue and Bonding Committee, which is considering the bill, said it could benefit the health of state residents.
“I see this not as a way to raise taxes but as a way to really reduce use of sugar if at all possible,” he said.
The legislation seeks to specifically tax beverages that contain “caloric sweeteners,” which it defines as sugar or any other sugar-based ingredient such as glucose, sucrose, high-fructose corn syrup, honey or maple syrup, according to Section 1.1A. Later parts of the bill clarify that the tax would not apply to nutritional drinks, sugar substitutes or milks of any kind, including those that are plant- or formula-based. The tax itself would be imposed on the retail purchase of the beverages that fall under the bill.
Many lawmakers are hoping that such a tax, dubbed a “soda-tax,” will incentivize consumers to veer away from sugar-sweetened beverages in favor of healthier options. According to the Centers for Disease Control and Prevention, frequent consumption of sugar-sweetened beverages is linked to obesity, Type 2 diabetes, heart, kidney and liver disease, dental problems and gout.
David Katz, the director of the Yale-Griffin Prevention Research Center, said he believes the bill could deliver a number of health benefits.
“Based on precedent in other locations, the bill has the potential to reduce [sugar-sweetened beverage] intake by 10 percent and perhaps more over time, and preferentially in those populations most adversely affected by high intake now,” he said.
Elliott, who is co-sponsoring the bill, expressed similar hopes. He also likened the tax to analogous efforts intended to curb cigarette usage.
Once cigarettes were identified as being detrimental to health, lawmakers launched a campaign against them and their usage subsequently declined. The hope is that similar efforts against sugar-sweetened beverages, which have largely been identified as contributing to poor health, would yield similar results, Elliott said.
The revenue generated by the tax would first be used to fund Care 4 Kids, a program that provides affordable child care services for working families. Because Care 4 Kids will not need nearly as much money as the tax is expected to generate, the remaining revenue would be put into the general funds.
Elliott conceded that those opposing the bill have legitimate concerns. Some representatives worry that the tax would essentially function as a regressive tax, in that it would disproportionately affect disadvantaged socioeconomic groups. Soda consumption is also higher among low-income populations, Elliott added.
In his testimony before the Connecticut Legislature, Katz said “obesity and diabetes are regressive” in that they disproportionately affect the socioeconomically disadvantaged more than other groups. Elliott added that any increase in expenditure among lower-income groups could be offset by an increase in the earned income tax credit, which supplements the incomes of low-income workers.
“The reason it takes so long to get legislation passed through is there’re a lot of issues and [representatives] are dealing with issues constantly, and not everyone knows the whole scope of the taxing structure, and so it takes a lot of conversations,” Elliot said. “If the concern is regressivity, there’s ways to address regressivity, but it requires many people to be way more informed.”
Because of these concerns and the lack of awareness around potential solutions, Elliott had a dim outlook on the bill’s potential of being passed, saying that he expected it to die in committee.
New Haven restaurant owners interviewed also voiced concern that the tax would increase the price of their beverages. George Kouroutakis, the owner of Yorkside Pizza, said that the tax could affect beverage prices, noting that overall the end result on business is not entirely clear now.
“We’ll absorb it to a point, but a business can only absorb so much,” he said. “We haven’t changed our menus in five years, because we try to stay competitive and offer a good deal.”
The owner of Chap’s Grille, Alex Elsankary, was similarly concerned, saying that beverages should not be taxed.
The Connecticut General Assembly is composed of a 151-person House of Representatives and a 36-person Senate.