The Journal News - Opinion
By Michael Oates
February 14, 2010

Gov. David Paterson’s proposed soda tax is another ill-advised attempt to solve the state’s spending woes with a tax that will burden both hard-working New Yorkers and our business community. In these tough economic times, we need to reduce burdens, not create them.

While the governor claims that the tax at a rate of a penny per ounce on soft drinks, juice drinks and other beverages is designed to fight obesity, it is really a revenue grab. Even former President Bill Clinton, who has focused on reducing childhood obesity since leaving the White House, does not favor the soda tax. He told ABC News: “I think the better thing to do is to give incentives right across the board for prevention and wellness.”

Only two states — Arkansas and West Virginia — currently tax soda and those states are among the 10 states with the highest obesity levels in the nation, according to data compiled by the Centers for Disease Control and Prevention. Simply put, fighting fat with a soda tax is a myth.

The soda tax is particularly disconcerting because PepsiCo’s bottling division is in the final stages of deciding whether or not to remain in Westchester County and thousands of well-paying jobs are at stake. The company currently employs about 1,900 people in the Hudson Valley and those jobs could easily be lost to another state if we aren’t careful.

PepsiCo, which has had its world headquarters in Purchase since 1970, when it moved out of Manhattan, has been an excellent corporate citizen, pumping billions of dollars into our economy not only through jobs, but also through generous support of local causes. Do you think that the State of Georgia would do this to Coca-Cola, one of its leading companies?

Companies need clarity from government, not back-tracking on issues that were already laid to rest last year when lawmakers withdrew a similar tax after New Yorkers made their voices heard that the state simply cannot afford another tax. We must not have companies wondering “what’s next?” from this administration.

The economics of the soda tax also don’t add up.

Since tax revenues are projected to increase rather than decrease, the governor seems to be counting on the tax not working. Even if the tax does work to some extent, the revenues it might raise would surely be offset by the loss of revenues if PepsiCo relocates to another state.

While we well understand the budget challenges facing New York, creating more quick-fix piecemeal taxes like the soda tax and the Metropolitan Transportation Authority payroll tax, could be a death blow or our state. There are better, long-term ways to close the budget gap. Let the soda tax fizzle out . . . for the good of all of the Empire State.

The writer is president and CEO of the Hudson Valley Economic Development Corporation, a private-public organization that promotes seven counties in the Hudson Valley as one of the world’s premiere locations for business.

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To read the original article, please visit http://www.lohud.com/article/20100214/OPINION/2140337/1076/OPINION01/Soda%20tax%20won+’t%20curb%20obesity%20but%20could%20drive%20away%20business.