Lobbying Firm, Local Advocacy Group Battle Over Tax
TELLURIDE – The fight over question 2A, commonly referred to as the soda tax, is heating up.
With less than a month until Election Day, the Colorado Beverage Association, a Denver-based industry lobbying group, recently began purchasing advertisements on behalf of “No On 2A,” an advocacy group comprised of citizens and business-owners who are opposed to the tax measure, which, if passed, would place a one cent per one fluid ounce excise tax on certain sugary beverages sold in Telluride.
2A opponents say it would burden business owners with new tax compliance and impact consumers with higher costs. Opponents also say the tax would infringe on the rights of consumers, and that the government should not attempt to influence consumers.
Kick the Can Telluride, a local citizens group advocating the tax measure, has stepped up its campaign as well. Anticipating outside influence from the beverage industry, the advocacy group hired a campaign manager, rented a Main Street informational and campaign center has begun holding community discussions. The group has also purchased advertisements and has been distributing informational pamphlets to Telluride voters.
Kick the Can supporters say that childhood obesity rates in Colorado are stubbornly high, and that the tax would raise awareness about the health risks associated with consuming the beverages and fund education programs for local youth.
Revenues from the tax, estimated at $400,000 annually, would fund a series of scholarships and youth-oriented educational and physical fitness programs aimed at promoting the benefits of healthy lifestyle choices, similar to the three-year grant the Telluride and Norwood School Districts received from the U.S Department of Education to fund their Physical Education Program, PEP, which will run out in October 2014.
2A is not the first attempt by a local government to tax sugary beverages for the envisioned benefit of public health, nor is it the first time the beverage industry has become involved in trying to influence voters on such a ballot question.
Richmond and El Monte, Calif., cities outside San Francisco and Los Angeles, respectively, asked voters to decide on similar beverage taxes in their November 2012 elections. Local groups advocating the tax battled outside corporate interest groups that purchased advertising and established opposition campaigns against the tax measure.
Voters in both cities roundly rejected the beverage tax; Kick the Can Telluride attributes the losses to the industry campaigns, which it claims vastly outspent the local advocacy groups, even though the two cities have histories of supporting raising local taxes (in El Monte, for example, a half-cent increase in sales tax won 71 percent approval ratings from voters, making their local tax rate among the highest in the nation in 2008).
For his part, Chris Howes, executive director of the Colorado Beverage Association, asks why Kick the Can is targeting sugary beverages and not all food products with high sugar content.
Kick the Can’s website cites a fact sheet from the Yale University Rudd Center for Food Policy & Obesity, which claims that American youth consume far above the daily recommended sugar intake, and that sugary beverages account for most of this intake.
“The reason we’re singling out sugary drinks and not, say Twinkies, is because scientists and doctors believe [these targeted beverages] are uniquely harmful to the body because sugar in liquid form is absorbed so quickly into the bloodstream,” said Elisa Marie Overall, co-founder of Kick the Can Telluride and the director of the local PEP program, Consuming even one sugary drink a day dramatically increases the consumer’s chances of developing obesity, heart disease and type II diabetes, according to Overall.
A recent study from the Colorado Health Institute found that Colorado children’s rates of overweight and obese children, and the second fastest-growing obesity rates in the nation. Overall added that nearly twenty percent of children in Telluride are overweight or obese, and that these children are at risk of developing health problems later in life, due to a lack of education and physical fitness programs, especially when PEP funding runs dry.
“Children today are just not as active as they use to be,” Overall said, adding that because of the increasing availability of televisions, computers and devices, children have become increasingly sedentary.
Overall, who has been approached by citizens in Boulder and other Colorado towns about the measure, says that passage of 2A could lead to a domino effect across the state, resulting in healthier, more informed Coloradans of all ages.
But Howes and members of No On 2A criticize the tax because the funding for the envisioned scholarships and education programs depends exclusively on the consumption of the targeted drinks; funding for the programs, they say, is thus tied to a dwindling revenue stream.
Overall says that the purpose of the tax is to target and reduce overconsumption.
“This tax is projected to reduce overconsumption of these beverages by 8-18 percent,” she said. “We’re just trying to slice off the top percentage of consumption, and help educate kids on making healthy choices at the same time.”
Asked if the Colorado Beverage Association is actively contributing to educational programs to educate Colorado youth on the health risks posed by consumption of sugary beverages, Howes said, “As an industry in Colorado and nationwide, we have been engaged with – and continue to work with – community leaders who are focused on comprehensive and meaningful solutions to obesity. Our work with former President Clinton and First Lady Michelle Obama are good examples.”
While he’s doing his part to encourage healthy Telluride children by offering free pizza slices and cookies in exchange for walking to school, Baked in Telluride owner Jerry Greene remains staunchly opposed to the tax and backs the No on 2A campaign.
“It’s going to create a nightmare for local businesses to collect and remit the tax,” said Greene. “I just see it as an onerous tax on businesses and tourism.”
Howes said that in addition to Greene, he’s heard from many other Telluride businesses about how the tax could adversely affect their businesses.
“If I go into one of the taverns in Telluride and order a diet cola, it will be charged differently than if I had ordered a regular cola,” Howes said. “This is just one example as to the headaches this tax will cause.
“I’m sure that Telluride’s department of revenue is filled with nice people, but if the businesses don’t fully comply with this tax, the owners will be in hot water,” said Howes, adding that while Kick the Can has outlined which beverages should and should not be taxed, business-owners say they’re irritated at the prospect of having to comply with a new tax, and remain uncertain as to how the compliance details will be ironed out.
According to the Kick the Can website, if voters approve 2A, vendors will be taxed based on the amount of sugary drinks they purchase to sell to customers (this includes the syrup vendors buy to make fountain drinks and the beverages sold by food carts and festival booths). To incentivize on-time tax payments, vendors will keep 1.35 percent of the tax they owe, if they pay on time, and can retain ten percent of the excise tax paid to the town to cover the cost of complying with the tax.
While the Telluride Town Council approved sending the sugary beverage tax to the ballot, Councilor Thom Carenvale was one of two “no” votes on the topic. Now, he says, the campaigns for and against 2A upset him. “I believe that the thousands of dollars each side is spending on the sugar tax campaigns should be donated to the kids utilizing the PEP program,” Carnevale told The Watch, “The amount being spent by both sides is an insult to the community of Telluride.”
Similarly, Councilor Ann Brady, a retired Telluride School District superintendent who spent nearly three decades working in the Colorado public school system, joined Carenvale in a dissenting vote.
“It is difficult to vote against any proposal that is purported to support a program for young people, but there are too many disconnects between this proposal and its desired goals,” said Brady, adding that she remains skeptical that Telluride children are as unhealthy as Kick the Can and Overall claims, and that the parents in Telluride are health conscious and pass this knowledge to their children.
“If the revenue from this tax is to support a school district program, it should have been a school district question, not just from the citizens and businesses within the Town of Telluride,” Brady said.