Soda tax could get revote as early as Wednesday

The House Committee on Health Care looks poised to settle some unfinished business tomorrow morning, when members might reconsider their tie vote last Friday on the soda tax.

The committee by all accounts had the votes to pass the penny-per-ounce surcharge on “sugar sweetened beverages.” But when Rep. George Till departed suddenly to tend to a medical emergency (he’s a doctor), he took with him one of the ‘yes’ votes needed to pass the bill.

Committee chairman Mike Fisher proceeded with the vote anyway, which resulted in a 5-5 tie. Following the vote, Fisher declared the bill dead. But it looks like the committee is eager to resurrect the measure, and that someone will make a motion to reconsider, possibly as early as tomorrow.

The likeliest outcome, according to people closest to the issue, is a 6-5 vote in favor of the soda tax, which would raise about $24 million annually. But the provision might not have much of a shelf life.

The bill heads next to the House Committee on Ways and Means, where six of the 11 members look to be opposed, for now at least, to the excise tax on soda. While the 1-cent per-ounce assessment might seem too stiff a hit for some lawmakers, they could be more amenable to a lesser surcharge. Rep. Jim Masland, a Democrat from the border town of Thetford, is in the process of drafting an amendment that would do away with the excise tax, and replace it with language that revokes the existing sales tax exemption on soda and candy bars.

It won’t come close to raising the cash the excise tax would generate. But it would bring in an estimated $6 million. And with so much skepticism of and opposition to Peter Shumlin’s revenue proposals this year (think break-open tickets and earned income tax credit reductions), lawmakers need to find alternatives fast.

While Masland says the excise tax would impose undue burdens on retailers in border towns, he doesn’t think a 6-percent sales tax would have much of an impact on consumer behavior.

The coalition of advocacy groups pushing the excise tax – they include the American Cancer Society, American Heart Association and Vermont Medical Society – aren’t giving up just yet. The advocates are already running radio ads designed to bolster public support for the tax, and will continue to put the hard sell on persuadable lawmakers.

Even if they can get the excise tax through Ways and Means, though, it has almost no chance of passing in the Senate. Anyway, Shumlin is unalterably opposed to the tax.

Advocates nonetheless want a debate and vote on the House floor.

The death of the excise tax, whenever it comes, will open up a new revenue problem for lawmakers. Shumlin wants to use the so-called “Catamount assessment” to fund health care subsidies in the exchange next year. The Health Care Committee, however, killed off the assessment, which raises about $11 million annually – they think it unfairly penalizes employers. And they’re relying on the soda excise to make up for the lost revenue.

Even if lawmakers revoke the sales tax exemption on soda and sweets, they’ll still be $5 million short of what the Catamount assessment would have generated.

The soda tax wouldn’t have had as much trouble last Friday were it not for disagreement over subsidies for low- and middle-income residents heading into the health care exchange next year. Gov. Peter Shumlin wants to give some financial assistance to people who might struggle to pay insurance premiums, co-pays and deductibles. But the assistance levels in his proposal aren’t as generous as they have been under Catamount Health.

Representatives Chris Pearson and Paul Poirier both support the soda tax. But since they can’t convince the committee to use the revenue to bolster the health care subsidies, they’re voting ‘no’ for the entire package.


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