Joint Committee on Revenue
The Massachusetts Health & Hospital Association (MHA), on behalf of its member hospitals, health systems, physician organizations, and allied health care providers, appreciates the opportunity to offer testimony in strong support of SB1709 / HB2529, “An Act to Promote Healthy Alternatives to Sugary Drinks.”
Sugary drinks are the single largest source of added sugar in the American diet. Sugary drinks, unlike junk foods which may contribute some nutrition to the diet, are just “empty” calories. That is, the caloric sweeteners in them have virtually no nutritional value. To make matters worse, sugary drinks have a unique and proven harm. Consumption is directly linked to expensive, chronic illnesses such as type 2 diabetes and cardiovascular disease. According to a 2010 study in the journal Diabetes Care, people who drink sugary drinks regularly—1 to 2 cans a day or more—have a 26% greater risk of developing type 2 diabetes than those who rarely have such drinks. The American Heart Association reports that drinking just one sugary drink a day increases a man’s risk of having a heart attack or dying from a heart attack by 20%. Sugary drinks are an unnecessary part of the American diet. Decades ago these beverages were considered a treat, but are now consumed at alarming rates. From sports drinks to sodas to many fruit-flavored drinks, reducing consumption of these beverages as part of a heart-healthy lifestyle will help improve the health of our children and reduce the rates of type 2 diabetes, dental caries, and heart disease.
SB1709 / HB2529 seek to reduce the consumption of sugar through a tiered excise tax on sugary drinks based upon the amount of sugar that the drink contains. These proposals would improve public health, reduce medical expenses, and advance the health reform ideals of the commonwealth while generating much needed state revenues. The bill recommends three tiers of taxation for these beverages: drinks with little or no added sugars will not be taxed at all; drinks with moderate amounts of added sugars will be subject to a smaller tax rate; and drinks with many added sugars are subject to a higher tax rate. Funding received as a result of this excise would support a number of community health initiatives. This excise tax is levied at the distributor level and the underlying principles are similar to those that supported the establishment of increased tobacco taxes.
Early research shows that similar policies taxing these products are effective at reducing sugary drink consumption. In Berkeley, CA, for example, a recent study found that sugary drink consumption dropped by 21 percent in low-income neighborhoods during the first four months of a tax implementation, while water consumption increased by 63 percent compared to similar cities without the tax.
In Mexico, a sugary drink tax was implemented in 2014 as a step toward reversing the twin epidemics of diabetes and obesity. A study in 2017 examining the changes in purchase of taxed and
untaxed beverages over the first two years of the tax, found a 5.5% decline in sugary drink purchases in 2014 and a 9.7% decline in 2015, yielding an average reduction of 7.6% over the two-year period. The study also found that households at the lowest income level had the largest decreases in purchases of taxed beverages in both years. Purchases of untaxed drinks such as bottled water increased 2.1% during the study period.
SB1709 / HB2529 do not put in place a prohibition on these beverages. People will still be free to buy sugary drinks if they choose. However, by placing a tiered tax on these products based on their sugar content, the government will be fulfilling its responsibility to protect the public’s health by putting a policy in place that has the potential to substantially reduce diseases, reduce healthcare expenditures, encourage the reformulation of these products so that they contain little to no sugar, and even increase healthy life expectancy.
Thank you for the opportunity to offer comments on this important matter. If you have any questions or require further information, please contact Michael Sroczynski, MHA's Senior Vice President of Government Advocacy at (781) 262-6055 or firstname.lastname@example.org