State lawmakers look at taxes on soft drinks

WASHINGTON — After effectively quashing discussion of a federal tax on soft drinks last year, Coca-Cola, Pepsi and the fast-food industry are facing a new battle on the state level, where legislators are beginning to consider their own taxes on sweetened beverages to improve public health and generate revenue.

The next showdown could be in California, where legislators last week vowed to pass such a tax in light of new studies linking soft-drink consumption to obesity in children and adults. One study suggests that obesity and related problems cost California $41 billion a year in medical expenses and reduced productivity.

In the past year, proposals to alter the tax treatment of soft drinks have surfaced in 12 states, including a bill that recently passed the Colorado legislature. The city of Chicago currently taxes soft-drink sales.

In Washington, the industry spent $54 million on lobbying and millions more in campaign donations to key officials, effectively derailing any discussion of taxing soft drinks as a means of funding the federal health-care overhaul. The industry also worked with community activist groups — including several in the president's hometown of Chicago — to oppose a federal tax.

But the industry's strategy has begun to fray around the edges. Some of the community and minority groups that worked with the soda lobby last year are under pressure from state groups to sever their ties to the beverage industry.

After the Tribune Washington bureau reported on the industry's efforts to recruit activist minority groups to its anti-tax campaign, one of the most prominent organizations — the National Hispanic Medical Association — dropped its alliance with the industry.

Nonetheless, Kevin Keane, a senior vice president for the American Beverage Association, called the tax idea a "money grab" that will hurt working families.

"When it comes to soda taxes, the idea hasn't gone anywhere for good reasons," Keane said. "People are hurting. Congress understood that a consumer tax would only add to their pain, not help it."