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Group eyes tax on soda

By Steven Stiefel
The Times-Journal

Published April 16, 2003

A lobbying group for state employees wants to ease the state’s budget problems by requiring consumers to pay an extra tax on soft drinks, beer, wine and most other bottled beverages.

The Alabama State Employees Association is promoting a tax of one-fourth of a cent per ounce, which would amount to 3 cents on the typical 12-ounce soft drink, bottled water or beer. The association estimates the tax would generate $146 million annually for the state.

Dist. 24 State Rep. Todd Greeson, R-Ider, said he isn’t in favor of any tax hike, at least until he can look at specific details on paper, including how much revenue will be generated.

“This is just someone tossing an idea out,” he said.

Sen. Lowell Barron, D-Fyffe, did not have any comment on the plan.

Even with the cost-cutting measures made by Gov. Bob Riley, Greeson fears there may be no choice but to pass some sort of tax. The state employees’ group made its proposals as the Legislature tries to deal with a $500 million shortfall in the new state budgets starting Oct. 1.

“We can either cut programs or come up with revenue, and I am afraid that with the amount of money we’re talking about, you can only cut so much,” he said.

He thinks Riley’s public bean-counting is restoring credibility that tax dollars will not be wasted, but recent stories have also validated previous mistrust.

“Some people feel there has been a lot of irresponsibility out of state government,” Greeson said, “but I hope it is true that isn’t the norm.”

The tax proposed by ASEA would cover soft drinks, bottled water, sports drinks, alcoholic beverages, mixers and juice drinks containing less than 100 percent fruit juice. It would not cover milk, 100 percent juice and baby formula.

ASEA executive director Mac McArthur said the bottled beverage tax could offset the potential layoff of 40 state troopers, the discontinuation of roadside assistance and provide for making prisons safer.

The association also proposed eliminating the sales tax credit that banks get for sales taxes paid on furnishings, equipment, supplies, food and beverages. That would generate $10 million to $12 million, McArthur said.

David Azbell, the governor’s press secretary, said the bottled beverage tax would hurt the poor. “It is more regressive taxes on an already regressive tax system,” Azbell said.

The bank tax would single out one industry, while Riley would prefer a comprehensive tax plan, Azbell said.

Greeson and other legislators are expecting Riley to send them a revenue-raising plan in a few weeks, but the governor has given no indication what will be in it. Greeson remains too ill to travel to Montgomery but he stays in daily contact with fellow lawmakers.

“My roommate tells me I haven’t missed anything because of what is happening in the Senate,” he said.

Oakley Melton, executive director of the Alabama Soft Drink Association, said bottled beverage taxes have been proposed in Alabama before and have never passed the Legislature.

Melton said soft drinks already have the state sales tax levied on them, and it’s unfair to tax them at a higher rate than other items in the grocery store.

“Soft drinks are a legitimate refreshment beverage primarily consumed by children and poor people,” the Montgomery attorney said.

Based on the national consumption figures for soft drinks and bottled water, the average Alabamian would pay an extra $28 per year if the association’s proposal became law.

— The Associated Press contributed to this story

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