Hawaii Soda Tax Proposal Fizzles

But the alcohol tax lives on with a provision seeking to raise alcohol taxes by roughly 50 percent.

February 17, 2011

HONOLULU - Hawaii senators rejected a proposal by Governor Abercrombie to tax soft drinks as much as 25 cents per bottle, though it retained a provision that seek to raise alcohol taxes by roughly 50 percent, the Associated Press reports.

Hawaii's Senate Health Committee voted 4-1 to remove the soda tax from the bill though retained the alcohol provision.

Last month, Abercrombie had proposed the soda tax of 25 cents for each container larger than 12 ounces and 10 cents on smaller containers. Combined with the alcohol tax, the measure was projected to generate about $52 million annually.

The proposal was aimed at reducing a state budget shortfall projected at $800 million over the next two years as well as childhood obesity.

"We have to be careful that in our haste to raise revenues, that we don't inordinately suppress one industry and destroy a large sector of jobs," said Health Committee Chairman Josh Green.

Soft drink companies opposed the tax, maintaining the price increase would not impact childhood obesity or other health problems cited by Abercrombie.

"Sugar-sweetened beverages are a very small part of the diet, and it's clearly unfair to target any one food or beverage as the cause or the largest contributor to the obesity problem," said Bob Phillips, a spokesman for Coca-Cola Bottling Company of Hawaii.

Without the soda tax, the bill is projected to raise roughly $18 million from alcohol taxes.

Hawaii's alcohol tax has remained unchanged since 1998. The proposed increase ranges from roughly 30 cents more per gallon of beer to $3 extra per gallon of liquor.

Tim Lyons with Anheuser-Busch told the AP than any increase in alcohol taxes would impact jobs and hurt consumers.

"Any time you increase the price, it reduces sales," he said. "We know we will lose jobs from this. In this economy, we should be thinking about things that will increase economic prospects."

The bill heads next to the state Senate Ways and Means Committee.

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