POSTED: 1:30 a.m. HST, Feb 15, 2011
The state Senate Health Committee advanced a bill yesterday that would increase the tax on alcoholic beverages but removed a provision that would have created a new soda tax.
The alcohol tax, which has not been increased since 1998, would rise by 50 percent under the bill and would generate $23.4 million a year to help with the state's budget deficit and for programs to discourage alcohol abuse.
With the tax on soda and other sugary drinks — which would have generated about $44 million a year — deleted from the bill, it is unlikely such a proposal will pass this session. The state House has yet to hear the idea.
Gov. Neil Abercrombie proposed raising alcohol and soda taxes to promote healthy lifestyles and to bring in new revenue to help with a projected two-year budget deficit of $700 million.
"We have to be careful in our haste to raise revenues that we don't inordinately suppress one industry and destroy a large sector of jobs. I was concerned about that," said state Sen. Josh Green (D, Milolii-Waimea), chairman of the Senate Health Committee and an emergency room doctor. "However, consumption of alcohol and soda are linked to very real health concerns — diabetes, childhood obesity — and this also had to be seriously considered in the process."
Alcohol and soda industry representatives told senators last week that the tax increases could lead to potential job losses. Several also questioned why the state would single out soda.