Remember Governor Paterson's defeated plan to raise a billion dollars by levying a penny-per-ounce excise tax on soda and other sugary beverages? It's still in play, despite repeated cash roadblocks thrown up by the beverage industry. What brought it back from the dead this time is a compromise, floated by Paterson, that would exempt diet sodas and bottled water. The new proposal would mean less revenue for the state ($815 million) but it seems to be Paterson's best last hope to wrench that bottle of Fanta from your cold, diabetic hands. Of course, the beverage industry has a thing or two to say about this latest "compromise."
Soda industry execs say that just because there would be no tax on diet cola, that doesn't mean soda drinkers will buy it. They "worry" that if a liter of soda costs a few cents more, consumers will either abstain from their precious elixir, or cross state lines to get it on the cheap. "Critics make the presumption that people switch, but people have their preferences, which is why companies are constantly trying different innovations on products like Coke Zero and Pepsi Max," Kevin Keane, a spokesman for the American Beverage Association, tells the Times.
Speaking on background, a Paterson administration official tells the Times soda pushers "should embrace this idea. They’re interested in selling product, and this proposal would increase the sale of more diet products. Product is product." And during a radio interview this morning, Paterson himself said, "Somebody said that the soda tax was dead because it hasn't been getting much support. I haven't said that. Listen, a lot of things the legislative leaders, legislators will say are dead on arrival, but I'll tell you what, that borrowing is in the same place, as far as I am concerned. Because I am not going to leave [office] throwing my hands up saying 'Hooray For Me!' when I all I did was create greater problems for the next governor."
But despite studies showing a link between diabetes and diet soda, The Alliance for a Healthier New York is on board with the compromise. State budget estimates suggest that obesity-related ailments like diabetes cost New York taxpayers $7.6 billion a year. "It’s a win-win for New York," says Eric Koch, a spokesman for the alliance. "It’s a proven way to help reduce obesity and encourage people to lead healthier lives."