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NY legislature rejects soda tax but negotiations continue

By Caroline Scott-Thomas , 06-Apr-2010

Both the New York State Assembly and Senate have rejected a proposed tax on sugary soft drinks in their budget resolutions, but a decision will only be finalized after negotiations with the state governor.

Even though a nationwide levy on sugary soft drinks was dropped from the federal agenda earlier this year, the political will to tax soda on a state level seemed to have rebounded in recent months. New York governor David Paterson, with the support of New York City mayor Michael Bloomberg, resurrected the idea of a penny-per-ounce tax on sugary drinks in January, as the city looked for ways to close a $7.4bn budget gap.

However, the beverage industry – as well as a portion of the American public – has strongly opposed such a tax, with a range of high-profile anti-tax marketing campaigns, and public and political petitioning efforts.

Across the state, opponents to the tax have organized marches and petitions, with beverage industry workers arguing that the tax could cost jobs.

President and CEO of the American Beverage Association Susan Neely said in a statement: "A tax doesn't even qualify as a good start to addressing the rising rates of obesity. We need to move beyond these simplistic ideas and pursue comprehensive, meaningful solutions from all aspects of society if we're really going to reverse childhood obesity.”

If it were to be implemented, Paterson’s proposal for a penny-per-ounce soda tax in New York State would be expected to raise $450m in its first year. The state budget for 2010-2011 is due to be finalized later this month.

In other states, Mississippi’s state representative John Mayo introduced legislation to tax the syrup used to sweeten soda at a distribution level in January. In Philadelphia, Mayor Michael Nutter has proposed a two-cent per ounce tax on sugared beverages. Kansas Senator John Vratil has just put forward a proposal for a penny tax per teaspoon of sugar in soda, and Colorado removed existing tax breaks on sugary beverages and candy.

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