Monday, February 16, 2009

Soda Tax: Slip Sliding Away

Reacting to the idea's unpopularity, as well as to the aggressive lobbying of the food and beverage industry, the governor appears to have thrown in the towel on the soda tax. As the NY Times reported Saturday: "Barely into the thick of budget negotiations with the Legislature, Gov. David A. Paterson is already backing off one of his signature revenue-raising proposals: taxing soda."

But here's where it gets a bit quirky; since the governor explains that the proposal wasn't really a serious revenue enhancing measure-just an educational concept designed to get the folks to think: "The tax on soda was really a public policy argument,” the governor said. “In other words, it’s not something that we necessarily thought we would get. But we just wanted the population to know some issues about childhood obesity.”

Nice argument after the fa(c)t-or, after it was clear that no one was buying this lame idea: "Opponents of the soda tax — which Mr. Paterson and his aides preferred to call a tax on obesity, which afflicts a quarter of New Yorkers — said they were glad that Mr. Paterson appeared to be abandoning it. “The governor is responding to the obvious hue and cry, not only from the food and beverage industry people, but from the general public, who have shown in poll after poll that this is not an idea that they feel is worth embracing,” said Richard Lipsky, a lobbyist for the beverage industry."

Indeed, we have shown that the tax would be, not only heavily regressive-taxing the poor who tend to drink more sodas than lattes-but would also hurt small bottlers and bodega owners: "Our businesses - small businesses - can't afford that tax," Ramon Murphy, president of the Bodega Association of the United States, told a rally of grocery owners and workers."

Still, the governor is doing on this issue what is becoming a pattern; saying one thing to one audience, and then backtracking to another-often through a spokesperson. As the Times points out: "In a statement on Friday, the governor’s spokeswoman, Risa B. Heller, said that Mr. Paterson’s remarks to the students, which were first reported by The Associated Press, had been misconstrued. “The governor stands firmly behind his soda tax proposal,” Ms. Heller said. “He acknowledged that this wasn’t a popular proposal and made an observation about the Legislature’s actions and explained the underlying policy rationale. By no means was he stepping away from it.”

But, who knows? After all, the aforementioned Heller was shown the door at probably just about the time she was speaking on the governor's behalf, As the Post tells us: "Paterson, who has been slammed in the media in the wake of the Caroline Kennedy smearing by a source close to him, told associates he had no confidence in Heller."

Our feeling is that Paterson sees the handwriting on the wall-and is now moving on to battles he's more likely to win-with spokespersons who can better interpret what he says and actually means. The soda tax is a distraction; and the need for major structural change in the state's budget remains. We'll give Malcolm Smith the last word here: “We have to make structural changes in New York’s budget to avoid future budget gaps as large as what we are facing now,” Mr. Smith said. “To do that, we have to find a way to reduce spending.”