Soda tax proposed

The Revenue Committee heard testimony March 15 on a bill that would levy sales taxes on soft drinks.

LB447, introduced by Lincoln Sen. Bill Avery, would amend the definition of food to exclude soft drinks, which would make them subject to sales taxes. Avery said ending subsidies on soft drinks would be a first step toward addressing childhood obesity.

“We cannot ignore the fact that childhood obesity is a staggering epidemic nationwide,” he said. “This is a tax loophole that subsidizes an industry that contributes to obesity and a whole host of related diseases among children.”

The bill would create the Nebraska Healthy Kids Fund and allocate 67 percent of sales tax revenue from the sale of soft drinks to the fund. The first $500,000 would be distributed to the University of Nebraska at Kearney Student Health Initiative Fund to develop and maintain a database for collection of data relating to student fitness.

After that distribution, 70 percent of the Nebraska Healthy Kids Fund would be distributed to the state Department of Education Student Health Initiative Fund, which would be administered as follows:
• the first $100,000 to monitor school compliance and define qualifications for wellness coordinators;
• then $10,000 to each school district; and
• the remaining funds would be distributed pro rata to districts based on most recent fall school membership.

The remaining 30 percent would be distributed to the state Department of Health and Human Services Child Health Initiative Fund, which would allocate $40,000 to each local health department. Any remaining funds would be distributed to local health departments pro rata based on the most recent census data regarding population served.

Representing the Nebraska Medical Association, Bob Rauner supported the bill. He said changes like those proposed in the bill have proven to be successful nationwide, naming a program in Kearney as the most successful example in the country.

Kate Heelan, director of the Human Performance Lab at the University of Nebraska at Kearney, also supported the bill. She agreed that efforts to improve children’s health in the Kearney Public Schools has been incredibly successful.

“Over the last 30 years, obesity rates have doubled for preschool-aged children,” she said. “You won’t see weekly bake sales as fundraisers anymore. Now you can buy from a garden in one of our local greenhouses as a fundraiser.”

Wayne Parks, president of the Nebraska Beverage Association, testified in opposition to the bill. He said it would not solve the problem it seeks to address.

“Childhood obesity is a complex problem with no simple solution,” Parks said. “Singling out one particular product for taxation is not going to solve the problem.”

Representing the state Chamber of Commerce, Steve Ford also opposed the bill, saying it represents an unnecessary broadening of sales taxes.

“We cannot tax our way to better health,” he said. “Additional taxation on soft drinks will not make people healthier.”

LB447 also would create the Evidence-Based Practice Grant Fund, which would distribute 33 percent of sales tax revenue from the sale of soft drinks. The fund would be managed by the Evidence-Based Practice Grant Fund Committee and comprise:
• the director of the Children and Family Services Division of DHHS;
• the director of the Behavioral Health Division of DHHS;
• the chief medical officer;
• the chairperson of the Nebraska Children’s Commission;
• the vice chairperson of the Nebraska Children’s Commission;
• the commissioner of education;
• the probation administrator of the Office of Probation Administration; and
• the director of the Nebraska Center for Research on Children, Youth, Families and Schools.

The committee would provide grants from the fund for evidence-based practices for prevention and intervention services for at-risk children in Nebraska.

The committee took no immediate action on the bill.

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