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Sugary drink tax designed to shore up city budget

Posted: July 25, 2012 6:00 a.m.
Updated: July 25, 2012 6:00 a.m.

A display of various size cups and sugar cubes is shown at a news conference at New York's City Hall on May 31.

 

EL MONTE, Calif. (AP) — City leaders are looking for a sugar fix.

The City Council on Tuesday was scheduled to consider declaring a fiscal emergency so it can place a proposed soda tax on the Nov. 6 special election ballot.

Businesses would be charged a penny per ounce on beverages they sell that are sweetened with sugar, such as soda, Snapple and Gatorade.

Similar proposals aimed at battling obesity have been floated around the nation, but city officials say the No. 1 goal of El Monte's proposed tax is to curb red ink. The health effects are an added bonus.

"What we're doing is financial planning," Finance Director Julio Morales told the Los Angeles Times (http://lat.ms/M6DPVk). "We're trying to take the right steps."

El Monte is among many California cities struggling to balance its budget in the face of lower revenues, higher labor costs and decreased state funding. Cuts to city departments are expected to close a $2.3 million deficit this year, but the "sugary drinks" tax could be a hedge for the future, officials said.

The tax could add between $3.5 million and $7 million a year to city coffers, according to a staff report.

"There are significant financial hurdles that we need to start dealing with now, so having this type of tax as an option brings in revenue and hopefully encourages individuals to make healthier choices," Mayor Andre Quintero told the San Gabriel Valley Tribune (http://bit.ly/MZlSlt ).

Sugary drinks can contribute to obesity, diabetes and bad teeth, he told the Times.

About 28 percent of children and adults in El Monte were classified as obese in 2007 and 2008, according to the Los Angeles County Department of Public Health.

But primarily the tax is part of a three-year plan to stabilize city revenues. The money would go into the city's general fund.

By comparison, money for a proposed soda tax in the San Francisco Bay area city of Richmond would go to soccer fields, school gardens and programs to treat diabetes and fight childhood obesity. That tax is on the fall ballot.

The city could lose millions of dollars when a half-cent sales tax expires in 2014, and $2 million in deferred salary increases for employees are due in 2015.

Other cities also are considering a soda tax.

In neighboring South El Monte, a representative from the California Center for Public Health Advocacy was scheduled to make a presentation Tuesday on the benefits of a soda tax, the Tribune reported.

The El Monte proposal is modeled after the Richmond measure and on similar unsuccessful proposals in Pennsylvania and Hawaii.

Quintero told the Times that he was optimistic that a soda tax would pass but he expected opposition would come from soft drink producers.

Earlier this year, a proposal by New York Mayor Michael Bloomberg to bar restaurants, movie theaters and other eateries from selling jumbo-sized sugary drinks prompted an opposition lobbying campaign from the American Beverages Association.

A public hearing on the proposal was scheduled for Tuesday. The New York Board of Health is scheduled to vote on the ban on Sept. 13.

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