#1Soda Tax in West Virginia Tara Holmes Summer Research Associate West Virginia Center on Budget and Policy August 17, 2016 west virginia Center on Budget & Policy#2- Overview - Current West Virginia Soft Drinks Tax, WV Code §11-19-2 - Other Soda Taxes - Public Health and Soda Soda Consumption in West Virginia - Is a Soda Tax Regressive? - Case for Increasing the Soda Tax west virginia Center on Budget & Policy#3West Virginia Soft Drinks Tax WV Code §11-19-2 • "For the purpose of providing revenue for the construction, maintenance and operation of a four-year school of medicine, dentistry and nursing of West Virginia University, an excise tax is hereby levied and imposed on and after midnight of the last day of June, one thousand nine hundred fifty-one, upon the sale, use, handling or distribution of all bottled soft drinks and all soft drink syrups, whether manufactured within or without this state, as follows..." C rition Facts VERY LOW SODIUM Perving Size 1 Can west virginia Center on Budget & Policy#4What is Taxed? • Bottled or canned soft drinks, soft drink syrup, soft drink dry mixture "Any and all nonalcoholic beverages that contain natural or artificial sweeteners" • Soda water, lemonade, bottled or canned sweet tea, chocolate milk, packets of Kool-Aid • Also includes syrups used for coffee and tea-based drinks . Uncarbonated water, milk with no flavoring, and natural/undiluted fruit and vegetable juice 1 cent on each 16.9 ounces or fraction of the amount of fluid • Soft drink syrup: 80 cents per gallon Dry mixture: 1 cent on each ounce • This includes powdered creamers, iced tea mixes, instant breakfast mixes, Ovaltine, Tang west virginia Center on Budget & Policy#5(AF) ALL FLAVORS THIS IS NOT AN ALL-INCLUSIVE LISTING. - All similar and like products would also be taxable. BRANDS A & W Root Beer Alpenglow Sparkling Cider (AF) Big K (AF) Big Red Pop Caffienated Water (AF) Canada Dry (AF) Canfield (AF) Cappi Iced Coffee (AF) Chocolate Cow Clearly Canadian (AF) Club Soda Coca-Cola (AF) Cott (AF) Cotton Club Country Time Crush (AF) Diet Rite Cola Dodge City Sarsaparilla Double Cola Dr. Pepper Famous Amos Chocolate Drink Fanta (AF) Faygo (AF) Food Club Fresca Generic Brands of all products Ginger Ale Hansen's Natural Soda IBC Root Beer Jolt LaCroix Mineral Water (with flavoring added) Lemon Tree Liptons Iced Tea (canned and/or bottled) Mello Yello Mineral Water (with flavoring added) BRANDS Minute Maid (AF) Mountain Dew Mr. Pibb Nchi (AF) Nestea Iced Tea Nu-Grape Pennsylvania Dutch Birch Beer Pepsi Cola (AF) Perrier Water (with or without flavoring added) Quibell Water (with flavoring added) Quinine Water Rocky Top (AF) Royal Crown Cola (AF) Schwepps Seagrams (AF) Seltzer Carbonated Water (with or without flavoring added) Seven Up Shasta Slice (AF) Sprite Squirt Sun Dance (AF) Sunkist Sure Fine Snapple Iced Tea Tahitian Treat Tonic Water Upper Ten Vernors Weight Watchers White Rock (AF) Yoo Hoo (canned and/or bottled) Welch's Sparkling Grape Juice (AF) west virginia Center on Budget & Policy#6MILLIONS $35 $30 $25 $20 $15 $10 $5 $0 West Virginia Soft Drinks Tax Revenue, 1951-2015 —Actual Revenue -Inflation Adjusted 1951 1953 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 20132015 west virginia Center on Budget & Policy#7BREAKDOWN OF SOFT DRINKS TAX REVENUE, 2015 $750,890 $150,178 $14,116,756 Bottled Soft Drinks ■Syrup Powder west virginia Center on Budget & Policy#8Other states and where the money goes • Arkansas • . Roughly 2 cents per 12 ounce can of soda $631 million in revenue from 2001 to 2014 • Virginia . Gross receipts tax; dedicated to Litter Control and Recycling Fund • Tennessee Gross receipts tax; Litter Grant Program Philadelphia 1.5 cent tax per ounce • Pre-K Education, Parks and Recreation rehabilitation, Community schools . Berkeley • Penny-per-ounce west virginia Center on Budget & Policy#9. Mexico • 2013, country-wide soda tax 2 peso per liter, so about 6 cents Public health programs to prevent obesity and expand clean water access • Drop in soda sales of up to 10 percent Drop in consumption by 9 percent in low-socioeconomic status households west virginia Center on Budget & Policy#10Voting in November • San Francisco • Oakland Albany, California Boulder, Colorado west virginia Center on Budget & Policy#11Public Health and Soft Drinks • Sugar-Sweetened Beverages (SSBS) linked to overweight, obesity, and chronic illness • Americans drink about 45 gallons per person, per year . SSBs linked most notably to obesity and type 2 diabetes High blood pressure, stroke, cardiovascular risk, dental erosion, pancreatic cancer, gout west virginia Center on Budget & Policy#12Sugar-Sweetened Beverages • All calories come from sugars ⚫ FDA suggests limited sugars to 50 grams a day • Completely devoid of nutritional value Liquid sugars • Do not make you feel full More sugary drinks, more calories from any source west virginia Center on Budget & Policy#13Product Serving Size Calories Total Fat (g) Saturated Fat (g) Sodium (mg) Sugar (g) Carbs (g) Protein (g) Coca-Cola 12 ounces 140 0 0 45 39 39 0 Mountain Dew 12 ounces 170 0 0 65 46 46 0 20 ounces 290 0 0 105 77 77 0 Gatorade 20 ounces 130 0 0 270 34 34 0 Starbucks 16 ounces 280 3.5 2 220 59 60 3 Carmel Frappuccino Big Mac 216 g 560 34 11 1070 8 47 24 Lays Potato Chips 28 g (15 160 90 1.5g 170 <1 15 2 chips) west virginia Center on Budget & Policy#14Daily Sugar-Sweetened Beverage Consumption West Virginia vs National Average, 2013 US Average ■West Virginia [VALUE] 45.2 43.3 Age-Adjusted 18-24 63.8 west virginia Center on Budget & Policy#1570 70 68 99 66 99 64 662 60 60 58 59 56 Percent of Overweight or Obese Adults in West Virginia, 1999- 2013 54 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 west virginia Center on Budget & Policy#1616 14 12 10 8 6 4 2 0 National vs West Virginia Prevalence of Diabetes, 1994- 2014 199419951996199719981999200020012002200320042005200620072008200920102011201220132014 WV Diabetes Rate National Diabetes Rate west virginia Center on Budget & Policy#17Diabetes in West Virginia • 2012: Direct medical expenses for diabetes in WV was $1.9 billion • Another $627 million was spent on indirect costs from loss of productivity Estimated total cost spent on diabetes: $2.5 billion west virginia Center on Budget & Policy#18West Virginia High School Obesity Rate, 1999-2015 ■Obesity Rate 17.9 15.6 14.5 14.5 14.6 14.1 13.6 13.2 1999 2003 2005 2007 2009 2010 2013 2015 west virginia Center on Budget & Policy#19Is a Soda Tax Regressive? • While lower-income populations may be disproportionately affected by a soda tax, they are also disproportionately affected by overweight, obesity, and other health conditions • Earmark funds for Medicaid, and to encourage and support physical activity programs in schools, childhood obesity prevention programs, oral health programs, school gardens, and parks and recreation Lower-income populations would be the primary beneficiaries of these programs while also reaping benefits of better health and reduced risk of chronic diseases west virginia Center on Budget & Policy#20Changing the Current Soft Drinks Tax • Takubo and Stollings • Increase to 5 cents . More than $44 million in revenue 40% WVU Medical Schools, 20% Marshall University Medical School, 20% WV Osteopathic School 20% Medicaid Expansion • House Bill • No increase Split revenue evenly between WVU Medical Schools and special Higher Education Fund west virginia Center on Budget & Policy#21. Penny-Per-Ounce Tax • Penny-per-ounce tax on SSBS could result in more than $87 million in revenue Upwards of a $300 million budget deficit; revenue could be directed toward Medicaid expansion May 2016: 550,000 West Virginians were enrolled in Medicaid • 11.8 percent of all spending on Medicaid is attributable to obesity Could reduce adult obesity by 1.5 percent Could drop diabetes incidence rate by 2.6 percent west virginia Center on Budget & Policy#22Estimated Revenue of a Penny-per-Ounce Tax in West Virginia Year Revenue Amount 2013 $90,064,491 2014 $89,456,651 2015 $88,890,303 2016 $88,366,409 2017 $87,886,000#23Questions? west virginia Center on Budget & Policy#24• Works Consulted Pinho, R. (2015, January 16). Soft Drink and Candy Taxes. In Office of Legislative Research Research Report. Retrieved May 23, 2016, from https://www.cga.ct.gov/2015/rpt/pdf/2015-R-0016.pdf Nestle, M. (2015). Soda Politics: Taking on Big Soda and Winning (p. 373). New York, NY: Oxford University Press. Colchero, M., Popkin, B. M., Rivera, J. A., & Ng, S. (2016, January 6). Beverage purchases from stores in Mexico under the excise tax on sugar sweetened beverages: observational study. BMJ, 352. Gortmaker, S. L., Long, M. W., Ward, Z. J., Giles, C. M., Barrett, J. L., Resch, S. C., & Cradock, A. L. (2015). Brief: Cost Effectiveness of a Sugar-Sweetened Beverage Tax Philadelphia, PA. In Harvard Choices Project. Retrieved May 19, 2016, from http://choicesproject.org/brief-cost-effectiveness-of-a-sugar-sweetened-beverage-excise-tax-in-philadelphia-pa/ Blumgart, J. (2016, May 23). A Soda Tax is Fundamentally Regressive. What if It's Philadelphia's Best Hope for Progressive Change? The Nation. Retrieved May 23, 2016, from http://www.thenation.com/article/a-soda-tax-is-fundamentally- regressive-what-if-its-philadelphias-best-hope-for-progressive-change/ Friedman, R. R., & Brownell, K. D. (2012, October). Sugar-Sweetened Beverage Taxes: An Updated Policy Brief. Rudd Report Wang, Y., Coxson, P., Shen, Y., Goldman, L., & Bibbins-Domingo, K. (2012). A Penny-Per-Ounce Tax On Sugar-Sweetened Beverages Would Cut Health And Cost Burdens of Diabetes. Health Affairs, 31(1), 199-207. Choi HK, Willet W, Curhan G. Fructose-rich beverages and risk of gout in women. JAMA. 2010;304(20):2270-2278. Trust for America's Health and Robert Wood Foundation. (2014). The State of Obesity in West Virginia. In The State of Obesity: Better Policies for a Healthier America. Retrieved May 23, 2016, from http://stateofobesity.org/states/wv/ Economic Costs of Diabetes in the U.S. in 2007 American Diabetes Association Diabetes Care Mar 2008, 31 (3) 596-615; DOI: 10.2337/dc08-9017 west virginia Center on Budget & Policy#25• • Chaloupka, F. J., & Powell, L. (2014, January). Revenue Calculator for Sugar-Sweetened Beverage Taxes. In UCONN Rudd Center for Food Policy & Obesity. Retrieved May 19, 2016, from http://www.uconnruddcenter.org/revenue- calculator-for-sugar-sweetened-beverage-taxes? Finkelstein, E. A., Trogdon, J. G., Cohen, J. W., & Dietz, W. (2009). Annual Medical Spending Attributable to Obesity: Payer-and-Service-Specific Estimates. Health Affairs, 28(5). Centers for Disease Control and Prevention (CDC). 1991-2013 High School Youth Risk Behavior Survey Data. Available at http://nccd.cdc.gov/youthonline/. Accessed on May 24, 2016. west virginia Center on Budget & Policy