Tag Archives: sugar-sweetened beverage tax

Look out, here comes the Bee Pollen Brigade

Here’s the topline for today’s developments re: funding for improvements to Vermont’s health care system:

$20 million.

That’s the target figure for new revenue agreed upon by key House leaders. A big comedown from the House Health Care Committee’s $52 million, but enough to make some progress in closing the Medicaid gap*, enhancing access for the working poor, and trying to attract more primary care providers.

*The gap closure is likely to favor primary care doctors, since they’re the front line of health care and also the most financially precarious.

Exactly how the House will get to $20 million is unclear. House Ways and Means is aiming to pass a bill this week*, but it would then face an uncertain fate in the Appropriations Committee. And the House floor. And the Senate.

*Committee vote today postponed due to the absences of two Democratic members.

But $20 million seems etched in stone, at least in the House. So this morning, Ways and Means examined five different tax packages that would raise roughly $20 million per year. The options include: some sort of tax on sugar-sweetened AND diet beverages, removing the sales tax exemptions on candy, sweetened beverages, imposing the rooms and meals tax on vending machiens, increasing taxes on cigarettes and/or tobacco products, and my fave: imposing the sales tax on dietary supplements.

Gasp! Yes, lawmakers might force us to pay sales tax on cranberry extract pills, antioxidants, probiotics, pro-oxidants (is that a thing?), and all those other sundry preparations clogging the shelves of your local food co-op.

I am now counting down to the arrival of the Bee Pollen Brigade with cries of outrage. This could be the next mass invasion of the Statehouse.

But it’s among the least unpalatable options before Ways and Means. As of this writing, there’s no sense of a committee consensus or even a majority behind any of the five tax packages. (Conservative Democrat Jim Condon tried a Hail Mary pass this morning; he floated the idea of selling bonds to pay for some health care reforms. The idea was quickly shot down by the Treasurer’s office, which pointed out that it’s considered improvident to bond for short-term spending. Or, to put it in Treasurer’s terms, “You should make sure the useful life of the asset is at least as long as the life of the bond.”)

Ways and Means is working from five proposed tax packages; all five are outlined, with revenue estimates, on the committee’s website.

So, the details of the revenue package remain unclear, but the bottom line is not.

$20 million for health care.

.House Health Care gets the brown plate special

Recently, the House Health Care Committee passed a health care bill that raised $52 million in new revenue to pay for an array of reforms, including better Medicaid reimbursement for providers and more premium support for the working poor. It proposed raising the revenue through a payroll tax and a sugar-sweetened beverage tax.

Then it went to the Ways and Means Committee, which couldn’t agree on either tax. Technically they have yet to agree, but they did send guidance to the Health Care Committee that it should craft a plan requiring no more than $20 million a year. Ways and Means is reportedly moving toward a smaller version of the beverage tax to raise that money, although nothing is final.

Well, as one of my childhood heroes, Detroit Lions great Joe Schmidt, says, “Life is a shit sandwich, and every day you take another bite.” When the Health Care Committee reconvened this morning with that guidance in mind, they looked like they’d been served the Brown Plate Special. Glum faces all around. As committee chair BIll Lippert said, tongue slightly in cheek, “We can’t do all that we have to do.”

Committee members had no clear idea how to proceed. There were widely varying ideas. Anytime a specific cut of any size was suggested, sound and reasonable objections were voiced.

When they looked at the overall picture, some members wanted to make big cuts here and hold harmless there; but they all had different heres and theres.

At the end of a necessarily brief discussion (before the House convened for the day), Lippert thanked everyone for their input and said he would try to put together a proposal for futther discussion. And he noted that the committee would need to adopt some kind of bill by the end of the day tomorrow. He didn’t sound very happy.

Whatever Health Care comes up with, it’s likely to face the ax down the road. It’s still unclear whether Ways and Means can pass the reduced beverage tax, to say nothing of its fate in the full House and Senate. If I were a betting man, I’d say any new health care initiatives are going to be whittled down to nothing, or nearly so.

Our Leaders will plead fiscal responsibility in tough times, and perhaps start looking for a bone to throw to disaffected liberals.

House Ways and Means at impasse

This afternoon, the House Ways and Means Committee was scheduled to discuss the health care bill. You know, the one with the two-tax solution: the .3% payroll tax and the sugar-sweetened beverage tax.

Well, it didn’t happen.

The committee took testimony in the morning. But after lunch, members did not reassemble. At one point, committee chair Janet Ancel entered the Ways and Means room; I asked her what the plan was.

I don’t have her exact words, but here’s the gist. They’d heard from all the witnesses, but the committee had stalled out on the two tax provisions. Neither tax would get majority support in the committee, if she held votes today. So, no votes.

No witnesses left. (She jokingly asked me if I’d like to testify.) And apparently she feels that more discussion or debate wouldn’t change any minds.

Welp, without those two tax provisions, there’ll hardly be any money for closing the Medicaid gap or any of the other improvements adopted by the House Health Care Committee.

Ancel had no idea what would happen next, or when it might happen.

Of course, either tax (or both) could be added back at a later point. But if Ways and Means can’t agree on a funding mechanism, it’s  certainly a discouraging sign for those of us hoping to redeem a few scraps of the lost promise of single payer health care.

For health care expansion and SSBT, a long road ahead

Last week brought some relatively cheery news for fans of better access to health care and of the sugar-sweetened beverage tax. The House Health Care Committee passed a fairly wide-ranging bill that would help close the Medicaid gap, provide more assistance to working-class Vermonters seeking health insurance and encourage more primary care providers, among other things. To pay for all that, the Committee opted for a two-pronged approach: the revised 0.3% payroll tax proposed by Gov. Shumlin, plus the two-cents-per-ounce tax on sugar-sweetened beverages.

A good package, a nice bill. But is it a meaningful step, or simply a McGuffin? When you read between the lines of Committee chair Bill Lippert’s statement, and see the slightly shopworn look on his face, well, you start thinking the latter.

I have no illusions that what we propose will be a final product at the end of the session, but it was our responsibility… to identify and articulate priorities that could make a difference now and could be investments for the future, even in a time of tight budgetary constraints.

Glass half full, or glass half empty? I hear a guy resigning himself to the inevitable disembowelment of his bill.

Enough inference. The next stop is the Ways and Means Committee, where opinion is split on the SSBT and there’s widespread opposition to the payroll tax. After that, well, there’s a lot of room for pessimism.

There’s little appetite for raising taxes in Montpelier — or should I say “raising more taxes,” since tax increases will almost certainly be part of a budget-balancing deal. (Front runner: Ways and Means chair Janet Ancel’s plan to cap itemized deductions at 2.5 times the standard deduction.) There’s also the EPA-mandated Lake Champlain cleanup that needs funding. In this climate, it’ll be hard to justify funding the health care package as well.

Regarding the SSBT specifically, Governor Shumlin and House Speaker Shap Smith don’t like it. Really, there aren’t many real fans; some just see it as the least bad option. Most lawmakers seem allergic to the payroll tax, even in reduced form. But let’s say, just for the heck of it, that the Health Care Committee’s bill passes the House. What awaits in the Senate, that notorious den of centrism where liberal House bills go to die?

“I wouldn’t predict what a vote today would be,” says Senate Finance Committee chair Tim Ashe (more D and less P with each passing day). “I’d say they both start in difficult places in terms of a Senate vote. Individual committees may be more or less favorable, but in the whole Senate, both would struggle to pass at this time.”

Gulp. Well, I guess I shouldn’t be surprised. So I guess that leaves us with no money for enhancing our partially-fixed health care system?

“That’s an open question,” says Ashe. “There are the resources to pay for new initiatives or increased support for existing initiatives can come from existing sources or new revenues.”

Oh really? You’ve found a pot of money somewhere?

“I’ll mention just one resource. …This year, Vermonters without insurance are going to ship about six million bucks to the federal government in a penalty. Next year that money goes up to 12 to 14 because the penalty basically doubles.

“So 23,000 Vermonters will be shipping all that money to Washington, and they will get nothing for it. Question is, is there a way to help them NOT send the money to Washington and get nothing for it, but to keep the dollars here and give them something for it? I don’t know what the answer to that is, [but] it makes you scratch your head and say, ‘Well, jeez, wouldn’t it be easier if they just had insurance here?'”

Nice to see the Senator thinking outside the box, BUT… he himself admits he doesn’t know the answer to that. And even if we could somehow funnel the penalty money into health insurance, we’re talking “about six million bucks” this year and 12 mill the year after that. That’s a far cry from the Health Care Committee’s $70 million a year.

Six million, or even 12, isn’t going to buy you a whole lot of improvement. The Medicaid gap would remain painfully wide, and good-quality insurance would remain out of reach for many working Vermonters.

But that’s the kind of year we’ve got. Best to ratchet down expectations.

Of course, we’re now looking at budget gaps in the $50 million range for each of the following two years. Substantial health care reform keeps receding further over the horizon. And universal access? Rapidly approaching pipe dream territory.

The Good Ship Two-Tax leaves the harbor

“Yes.”

That’s the one-word answer I got from House Health Care Committee chair Bill Lippert (D-’Burbs). The question? Did he consult with Speaker Shap Smith and Governor Shumlin before proposing a two-tax approach to funding health care?

As you may have heard, Lippert’s committee yesterday passed a health care bill including a .3% payroll tax and a two-cents-per-ounce sugar-sweetened beverage tax. Thus confounding the predictions of low-budget Vermont Political Observers (ahem) who thought the introduction of the lower payroll tax might be the death knell for the beverage tax.

Asked to elaborate on his one-word revelation, Lippert unsurprisingly didn’t offer much:

“…there are different points of view on different parts of the bill. That’s all I can say, really. The Governor’s made clear that he’s a fan of the payroll tax and not a fan of the sugar sweetened beverage tax.”

Of course, in this budgetary environment, the governor’s going to wind up accepting some items he’s “not a fan of.”

On the other hand, the Health Care Committee is a relatively safe harbor for the beverage tax; it approved the tax last time around, only to see it run aground in Ways and Means. So, will it be smooth sailing for the committee’s bill this year?

Nah.

“Sail through? No, it will not sail through. There are waves and shoals and whatever metaphor you want to use. I’m looking forward to it not being a shipwreck.”

At that point, we abandoned the metaphor. Point being, Lippert has no illusions about the permanence of the vessel — oops — he’s built.

He makes a good case for it, from a liberal point of view. Since the Governor reduced his payroll tax plan, the combo tax was an alternative way to fund an array of health care reforms aimed at broadening access, reducing the uninsured, encouraging expansion of primary care offerings, and further bending the cost curve.

The bill would improve available subsidies in the health care exchange for those making between 133% and 300% of the federal poverty level. Even with current subsidies, many of the working poor can’t afford health insurance. Or their coverage has such high out-of-pocket costs that they can’t afford to use it. Kind of defeats the purpose of health insurance, no?

The sugar-sweetened beverage tax, Lippertays, makes sense as a funding source for health care because it “raises revenue, but is also a way to invest in longer-term behavioral changes and better health.”

Of course, he acknowledges diverse opinions about the beverage tax, even on his own committee, and expects more of the same going forward:

I have no illusions that what we propose will be a final product at the end of the session, but it was our responsibility, and I was given the direction, to work with the committee to identify and articulate priorities that could make a difference now and could be investments for the future, even in a time of tight budgetary constraints. We may have exceeded that, but we did our best.

A number of us came into this session saying, we’re not going to be able to move forward on the universal access through single payer, but there is still reason for us to move forward in a significant way in health care.

Moving forward “in a significant way” required more revenue than the Governor’s reduced payroll tax would provide. Problem is, there’s pretty broad disagreement on the relative merits of the payroll tax and the beverage tax — across party lines. At this point, there’s no consensus on how to pay for health care reforms, or how much to pay. The likeliest outcome: a lot of the reform provisions will wind up on the cutting-room floor as legislative compromises eat away at the Health Care Committee’s revenue proposals.

Big Beverage’s Hired Guns pt. 2: Mountain Dew wishes and Twinkie dreams

“When you work in this building long enough, you notice things like thread count.”              — Anonymous Statehouse scribe

The House Ways and Means Committee heard a full morning’s worth of testimony today on the proposed sugar-sweetened beverage tax. The most interesting witness, not in a good way, was one Kevin Dietly of Massachusetts-based Northbridge Environmental Management Consultants, speaking on behalf of the beverage industry. He definitely had the fineest suit in the room, not to mention bright pearly-white teeth. (Oh, and a Google search indicates that he’s a member of the Chautauqua Yacht Club. Must be nice.)

And he acknowledged, in answer to a question from the committee, that he has represented the food and beverage industries since 1986.

That’s a long time serving the same paymasters.

Dietly managed to actually travel to Montpelier, unlike his fellow soulless industry flack Lisa Katic, discussed previously. I don’t imagine it was a sacrifice for ol’ Kev, since he presumably drew full expenses and a fat hourly rate for his visit to Montpelier. (He stuck around for the full morning, billable to “Stop The Vermont Beverage Tax.”)

(This wasn’t his first trip to the Statehouse; in 2013 he testified for the beverage industry against a proposed expansion of Vermont’s Bottle Bill. Surprise, surprise.)

His testimony was a carefully-crafted web of industry-friendly statistics and studies, plus back-handed dismissals of the academic experts who’d preceded him in the witness chair. You know, the economists, doctors, public health experts and nutritionists who have consistently found that…

— Sugar-sweetened beverages are a scourge of the American diet, leading to high rates of obesity, diabetes, and other severe illnesses.

— Taxing a specific commodity invariably leads to lower consumption.

— Lowering consumption of sugary drinks will have a beneficial impact on public health and public-sector healthcare spending.

— There’s no evidence of a significant “border effect”; in fact, there’s quite a bit of evidence that any “border effect” would be minimal or nonexistent.

— The impact on employment is neutral to mildly positive. Consumption of sugary drinks goes down, but people buy other stuff instead.  The equation balances out. Plus, the tax revenue funds jobs in government or the healthcare sector.

Pish-tosh, said Dietly, slamming “academics” who live in “a different world,” a “theoretical world.” When they retreat to their “ivory towers, things get a little wacky.”

Welp, so much for scientific research. Can’t trust anything they say.

As for Mr. Dietly, when you Google his name you get a massive quantity of testimony before various legislative bodies around the country on behalf of the food and beverage industries. Here’s a sampling of The Expensive Wisdom of Kevin Dietly:

He spoke to a New York Senate committee in 2010 in opposition to a proposed beverage tax. His arguments were essentially the same, then and now: a beverage tax would have disastrous economic consequences (but he entirely leaves out the fact that consumers will substitute other items for taxed beverages, thus mitigating the dreaded financial and employment impact), and it wouldn’t have any effect on public health (carefully selected statistics cited, inconvenient ones waved away).

In 2012, California voters faced a ballot measure to require labeling of foods that contain GMOs. (The measure was defeated after a very costly “No” campaign bankrolled by Big Food.) And oh looky here: Kevin Dietly was a hireling of the “No” campaign, and offered a very high estimate of the cost of GMO labeling — as much as $400 per year for each California household. His estimate was based on the assumption that producers would universally switch to costlier ingredients in order to avoid the GMO label (a dubious assumption at best), although he admitted that “We certainly don’t know what will happen.”

Speaking to Nevada lawmakers in 2011 on the subject of recycling and bottle deposits, Dietly positioned the beverage industry as having been “among the leading packaging innovators of the past 100 years,” and touted the industry as supporting a range of programs “to promote recycling.” And then he makes forceful arguments against deposit laws. If you read through his testimony, there are striking parallels in method, style, and type of argument with today’s testimony against the beverage tax.

In 2014 he addressed Connecticut lawmakers about a proposal to expand the state’s bottle bill. He asserts that it would impose unbearable costs on manufacturers and retailers, and had the audacity to depict the deposit/refund system as “counter to the goals of sustainable recycling and materials management.”

In 2002 he spoke before a U.S. Senate committee (chaired by Jim Jeffords) which was considering a “Beverage Producer Responsibility Act.” The concept of “producer responsiblity” has been a mainstay of advancement in environmental law; in Germany, for instance, producers have cradle-to-grave responsibility for their products — from bottles to automobiles. Its economy seems to be getting along just fine, no?

But according to Dietly, such an act would have been costly to consumers and businesses, and had little or no environmental benefit. Hmm, if he thinks there’s a disconnect between the Ivory Tower and reality, I sense a greater disconnect between industry-funded experts and reality.

I could go on, but you get the idea. Kevin Dietly is a well-traveled, amply-compensated spokesflack for the beverage industry, fighting for its interests in legislative halls around the country. His testimony should be judged accordingly.

Beverage tax pipped at the post?

This should have been a good day for the sugar-sweetened beverage tax. State lawmakers were unconvinced by Governor Shumlin’s proposed payroll tax, and many had turned to the beverage tax as a way to help close the Medicaid cost gap. Today, the House Ways and Means Committee is considering the beverage tax, and advocates on both sides are pointing to this hearing as a key moment.

(Last year, the beverage tax passed the House Health Care Committee but died on a close vote in Ways and Means. Things were looking better for the tax this year.)

But wait, what’s this? Shumlin’s posse has come riding over the hill with a revised payroll tax plan that, according to VPR’s Peter Hirschfeld, “looks to have new life” in the Health Care Committee. Fortuitous timing, neh?

The new plan is friendlier to business, cutting the payroll tax rate in half and eliminating an employer assessment on businesses that don’t offer health insurance to their workers.

Chief of Health Care Reform Lawrence Miller says the smaller tax would generate enough money to pay for Shumlin’s plan to close the Medicaid gap. Which makes me wonder how he can now accomplish this with less than half the revenue of his original plan. What got cut?

We’ll find out soon enough, as the Governor’s new plan gets an airing in legislative committees. But its very introduction may well be enough to throw the beverage tax, once again, into the dumpster.