Soft drinks' 'undeserved' tax break may go pop -
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Soft drinks' 'undeserved' tax break may go pop

LINCOLN — Dr. Bob Rauner is the first to acknowledge that obesity has many causes.

Lack of exercise, poor diet, family history and just plain overeating get much of the blame.

But Rauner believes that if Nebraska could take only one step in the war on weight, it ought to remove the state's tax break on soda pop.

Soft drinks and other sugary beverages represent nearly half of the added sugar consumed by ever-plumper Americans, according to a study by the influential American Medical Association.

The medical association states — and Rauner concurs — that reducing the consumption of those beverages, perhaps by raising the price, could cut into the obesity problem and help reduce the gluttony of spending on diseases caused by the drinks.

“If you had to pick one thing to start with, any sane person would start with this,” said Rauner, the director of the Partnership for a Healthy Lincoln, a group promoting wellness programs.

The doctor is a leader in a coalition of Nebraska physicians, nurses, teachers and health organizations that is mounting another effort to change the state's tax policy on sugar-sweetened drinks.

After failing this spring, the coalition is teaming up with State Sen. Bill Avery of Lincoln in an attempt to remove the sales tax exemption now enjoyed by soda pop, sports drinks and other sugary beverages.

The move sets up a debate over regulating personal choice. The “nanny state” argument has helped derail similar proposals in Nebraska dating back to the 1990s.

“Government can't legislate healthy lifestyles, and people are against letting government tell them what they can eat and drink,” said Chris Gindlesperger of the American Beverage Association, based in Washington, D.C. “People can make decisions without government help.”

Gindlesperger said it is unfair to single out beverages for blame when they constitute only 7 percent of all calories consumed.

He pointed out that the voluntary guidelines his organization pushed for the nation's schools — including replacing full-calorie sodas with water, milk and other drinks — had resulted in a 90 percent decrease in calories consumed in schools in the past four to five years. The industry, he added, also has launched a program to better inform consumers about the caloric content of bottled drinks.

“We think what we're doing is a good start,” Gindlesperger said.

What to do about the nation's ever-widening waistline is an issue that has been grabbing more attention in the hallways of power.

In 2011, the federal Centers for Disease Control and Prevention estimated that 28.4 percent of Nebraskans and 29 percent of Iowans were obese.

More than one-third of all adults, 35.7 percent, are now considered obese. A recent Duke University study found that the nation's rate of obesity has more than doubled since the 1970s.

Last month, the prestigious New England Journal of Medicine published the findings of three studies linking obesity in children with the consumption of sugar-sweetened beverages.

One of the reports concluded that because drinking such liquids did not satisfy people's hunger, they would eat just as much as they would if they had not downed a Mountain Dew, causing them to consume even more calories.

It's a money matter, too. In September, a report figured that if Americans as a whole could drop 5 percent of their body fat by 2030, the nation would save hundreds of billions of dollars in fighting obesity-related diseases, such as Type 2 diabetes, coronary heart disease and stroke.

Currently, Nebraska is one of 15 states, including neighboring Wyoming, that do not levy taxes on sugar-sweetened beverages. Iowa and all other neighboring states tax Coke, Gatorade and other such beverages.

In Nebraska, soda pop is defined as “food,” and food is tax exempt when purchased in a grocery store.

Avery said it was an “oversight” that sugary drinks were exempted when the state first began levying a sales tax. He argues that he's not really raising taxes, or telling people what they can or cannot drink, but removing an unjustified tax break.

Rauner said soda pop and other sugary drinks don't have any significant nutritional value, so the tax break is undeserved.

If the tax break were eliminated, the Legislature's fiscal office estimated that $11 million a year in new tax revenue would be realized.

Rauner said such money could be used to create a statewide anti-obesity program like those that have already shown success in the Kearney and Lincoln school systems.

“You've got a huge problem, and a solution that makes sense,” Rauner said. “It's not just theory. We've done this in two cities in Nebraska.”

The Kearney program, he said, has reduced obesity in grades K-8 by 15 percent since 2006 by giving schoolchildren body mass index “report cards” that suggest how to reduce their percentage of body fat and by offering healthier school lunches.

In Lincoln, after two years, the obesity rate in elementary schools in low-income areas dropped from 20.8 percent to 19 percent by allowing more physical activity during school hours and encouraging consumption of fruits and vegetables.

But Rauner said federal grant funding for such programs is running out. State funding, found through a tax on sugary drinks, could be a replacement.

Avery said that is a possibility, but he is concerned because opponents to his soda pop proposal last year called it a “money grab” that would funnel funds to anti-obesity efforts.

The senator said he's still undecided about how to draft his 2013 proposal or how any new revenue should be spent. Any state obesity program would have to come with specifics, Avery said.

While research continues to point to soda pop as a contributor to obesity, voters appear to be turning away from special taxes on the beverages.

During the November elections, voters in two California cities, Richmond and El Monte, rejected proposed excise taxes on sugar-sweetened drinks.

Those votes came only a month after Chicago opted for a new city wellness program rather than a tax on soft drinks.

In 2010, voters in the state of Washington repealed a new tax on sugary drinks and junk food. In 2008, Maine voters did away with a similar tax.

If a measure were to pass the Legislature this session, it would likely face a veto from Gov. Dave Heineman, who believes that promoting wellness, rather than raising taxes, is the better route to a slimmer, healthier world.

North Platte Sen. Tom Hansen shook his head repeatedly as Avery ticked off the reasons to support taxes on pop.

While the new revenue might help the state close a projected $393 million gap in the state budget, Hansen wondered what other foods or products might be targeted next for taxation.

“There's a lot of things that aren't good for you,” he said. “I think it goes back to parental rights. Say 'No.' If little kids want it, say 'No.'”

Last year a bill to start taxing soda pop failed to advance from the Legislature's Revenue Committee.

Avery and Rauner both said that it takes time for some issues to win approval, pointing to the decade it took before lawmakers passed, last year, a bill allowing breast-feeding in public.

Avery said Nebraska's tax exemption for sugary beverages is “indefensible.”

“I can't fix the whole problem of obesity,” he said. “But this one, it seems to me, is the most egregious. It needs to be addressed.”

Contact the writer: 402-473-9584,

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