Gov. Ned Lamont’s first budget will include a series of new “sin tax” proposals, including levies on sugary drinks, electronic cigarettes and plastic bags, and deposits on alcoholic beverages.
Lamont, who must submit his first two-year budget proposal to the General Assembly on Wednesday, also will recommend raising the age, from 18 to 21, to purchase both cigarettes and e-cigarettes.
“State government is going to step up,” Lamont said during a taped appearance on Capitol Report, WTNH-TV8’s political affairs program, which airs on Sunday. “These are the sins of the 21st century.”
Lamont released limited details on these taxes and charges, but proposals include a 10-cent tax on plastic bags, a 75 percent on e-cigarettes, a 25-cent deposit on liquor bottles, and a nickel deposit on 50 milliliter bottles of alcohol, sometimes referred to as “nip” bottles.
Lamont did not discuss the rates of the sugary drinks.
His predecessor, Gov. Dannel P. Malloy, proposed a 25-cent-deposit on full-sized liquor bottles in 2018, and his administration projected it would raise $13 million.
In 2017, the legislature’s Finance, Revenue and Bonding Committee considered, but did not approve, a one-cent-per ounce tax on sweetened beverages.
A spokesman for the governor’s budget office, Chris McClure, said the so-called sugar tax would advance an important health policy.
“We can leverage the tax code to accomplish valuable public health objectives, including incenting healthy behaviors and discouraging unhealthy ones,” McClure said. “This proposal is intended to encourage healthier food choices by our state’s residents, mitigate future health costs and, if enacted, would place Connecticut as the first state to do so.”
The sugar tax has been gaining support in recent years among health care and nutrition advocates as a tool to combat obesity and dental disease.
“The liquid sugar in soda, sports drinks, sweet teas, energy drinks and sweetened waters is the single largest source of added sugars in our diets today,” the Connecticut Association of School Based Health Centers testified before state lawmakers in 2017. “Children and adolescents are vulnerable to advertising for sweetened beverages and lack the information to make different choices.”
The association projected that the 2017 proposal, which levied a tax of one penny per ounce, would raise $145 million per year.
The Rudd Center on Food Policy and Obesity at the University of Connecticut also has advocated for the tax.
Roberta Friedman, a public health policy consultant who has worked with Rudd Center and the Connecticut Oral Health Initiative, testified that 19 percent of children in the state’s Head Start school readiness program already have experienced dental decay, a number that climbs to 29 percent by kindergarten and 40 percent by third grade.
In addition, about 9 percent of Connecticut adults — about 250,000 people — have been diagnosed with type 1 or 2 diabetes.
“These drinks contain nothing but empty nutrition-less calories and if drunk at all, should be a rare treat,” Friedman testified. “But instead, soda, sports drinks, energy drinks, sweet teas, and vitamin waters have become the daily go-to drinks in lieu of plain water.
The Rudd Center’s website offers a “Revenue Calculator for Sugary Drink Taxes” that offers a projection similar to that of the school-based centers.
According to the Rudd Center, a tax of one penny per ounce in 2019 would generate $150.9 million based on 117.9 million gallons sold. That estimate is based on an assumption of 90 percent compliance with the tax by distributors. The center warns that a non-compliance rate of 10 to 30 percent of beverage distributors would be “likely.
But the 2017 proposal also drew strong opposition from the beverage industry, related labor groups, and Connecticut retailers.
“We are concerned this new tax would harm our smaller, independent merchants who already operate under small margins,” Tim Phelan, president of the Connecticut Merchants Association, told legislators. “Any decline in sales would have a devastating effect on their bottom line and their ability to remain in business.”
Teamsters Local 1035, with 550 members who work in warehouse and production jobs for Pepsi, Coca-Cola and distribution firms, warned that a sugary drinks tax in Philadelphia triggered the loss of 80 to 100 related jobs in that city.
According to the American Beverage Association, the non-alcoholic beverage industry supports more than 2,600 jobs in Connecticut and has a $2.2 billion impact on the state’s economy.
The finance committee raised the sugary drinks tax bill for a hearing in 2017, but the bill died in committee without a vote.
This story was updated at 10:50 a.m. with details on e-cigarette and plastic bag taxes and liquor deposits.
The question is why does Gov Lamont want to punish our lower income residents with another regressive tax, a tax that has shown, in Philadelphia, to have not reduced intake of soda/sugar.
Findings from a study after two years of the Philadelphia sugar tax:
“We find no significant reduction in calorie and sugar intake,” conclude researchers Stephan Seiler from Stanford University, Anna Tuchman from Northwestern and Song Yao from the University of Minnesota, in a study published this week.”
“The tax does not lead to a shift in consumption towards healthier products, it affects low income households more severely, and it is limited in its ability to raise revenue,” they wrote. As the
obesity epidemic effects the poor disproportionately, they say, the tax “imposes a relatively larger financial burden on low income/high obesity households that are less likely to engage in cross-shopping at stores outside of the city.”
https://www.marketwatch.com/story/residents-of-philadelphia-found-a-novel-way-around-the-citys-unpopular-soda-tax-2019-01-11
So far everything “new” Mr Lamont has offered up as solutions to our fiscal challenges are punishing to our lower and middle class citizens. When are we going to see proposals to reduce our costs?
STM Do you really believe that the tax is to make folks healthier? Like the tax on gasoline is to make you drive less so there are fewer accidents? This is a TAX so they will have more money to give to the labor unions as they do with all the other taxes they impose.
Lamont, of course has “no choice” but to raise taxes now. Because he’s cut expenses and laid off state employees as much as he can.
Wait until UTC and others move out.
This is a tax that makes complete sense. The money raised should be used to fund the medicare/Medicaid costs of diabetes and other obesity related diseases.
We should also have a “Tesla Tax” to make electric vehicles pay their fair share of road maintenance, since they don’t pay the gasoline tax.
As for sales tax on food and medicine – not a good idea.
Taxing the air you breath is next.
Look to the voting records and report on the voting records of the representatives in your districts. Write your representative and let them know you are letting the public know what their record is. This can be challenging because there is no one place to sen their records but stick to the sites and you can piece it together. Write letters to all of your local papers to produce these results. Attend local town meeting to let the democrats you are watching and reporting their records. I can tell you from personal experience they do not like this but it entirely legal and should be more prevalent. Most media outlets only give you the facts that back their opinions.
Ned is on the right track here.. The Center on Addiction studies at Columbia University — CASA — has determined that, on average, states spend about 11% of their budgets in response to substance-abuse related issues, with alcohol being the abused substance generating most of the other drug abuse and related problems ( see link — 4627271-Shoveling-up-ii-the-impact-of-substance-abuse-on-federal-state-and-local-budgets)… If we apply this to Connecticut, we can see that Connecticut is spending about $2 billion per year on substance-abuse related issues (about the same amount as our annual deficit…). Wouldn’t this indicate that we should be collecting taxes on abused substances at a rate that would cover this portion of the budget? (…Rather than taxing the incomes of worker-victims — of a forced commute — per the regressive highway tolls advocated by some?…)