Institute Forum

"Not So Sweet" Summary November 9, 2010

Health Commissioner: Industry, Media Trivialized Soda Tax

New York State Health Commissioner Richard Daines has twice promoted proposals by Governor David Paterson to tax soda and other sugary beverages — and twice seen those efforts defeated. At a Rockefeller Institute of Government forum on November 9, Daines offered a public policy rationale for increasing the cost of sweetened drinks — which he described as a major contributor to the obesity epidemic — and discussed the political battles and media imagery that worked against the campaign for the tax.

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In a provocative and witty presentation, in which Daines interspersed health data with media images, the commissioner likened the industry reaction and media coverage following the proposal to the financial derivatives that contributed to the housing market bust in 2008. His talk was titled, “Not So Sweet: The Failure of a Public Health IPO in the Political Derivatives Market.” (IPO stands for “initial public offering,” usually of stock in a company.)

Daines defended the proposal to tax sugary beverages, which he said contribute significantly to the national obesity epidemic. Sugar-sweetened drinks are different from typical junk food, he said, because they do not substitute for healthier foods, but only add empty calories to consumers’ food intake, while leaving them hungry. They’re also cheap and easy to buy, come in unhealthy, oversized portions, and are too heavily advertised, especially to children, who are most vulnerable to advertising messages because they cannot distinguish the truth from a sales pitch, he said. Increasing the cost of sugary drinks with a tax would reduce consumption among low-income families most in need of better nutrition, he added, because studies have shown that poor people will cut down on purchases of non-essential items like soda in order to stay within their personal budgets.

About the obesity epidemic, he said, “It’s so serious that it actually impacts national security. The military has one of those really kind of disparaging slang terms for the guys that wash out because they’re too heavy. You know what they call them? They call them civilians. They call them the next people on your company’s health-care plan.”

He characterized the beverage industry’s campaign against the tax as a disingenuous tactic to protect profits. Industry lobbyists declared the tax proposal “dead on arrival” to quell public opposition, then spent $13 million to keep such opposition at bay. Industry representatives succeeded at defining soda as a food and convincing much of the public that the tax proposal smacked of paternalism, with cries that officials were promoting a “nanny state,” Daines said. The Paterson administration lacked the financial muscle to counter that kind of campaign, he added.

Rather than address the tax issue directly and thoroughly, he said, many media outlets picked up on images, sound bites and competitors’ work to disseminate increasingly trivialized stories — “derivatives” of useful information — that communicated more public-relations spin than substance.

Yet many newspaper editorial boards backed the tax, Daines said, and the proposal received support in a scene of a “Law & Order” TV episode, part of which Daines played.

But without broad public support for the tax, state Senators were unwilling to back it publicly, though Daines said some supported it privately, especially with the state facing a multibillion-dollar budget gap that could be offset by new revenue sources.

“At the last minute, they pulled the tax and they substituted a very regressive sort of pointless tax on low-price clothing,” Daines said of state lawmakers. “It must be that elected officials see typical New Yorkers as underfed but overdressed.”

Daines predicted that there would be no immediate effort to revive a legislative proposal for a tax on sugary beverages. He said a public information campaign for such a tax might have to garner more support before lawmakers take it up again.

“Our IPO failed,” Daines said. “And I'll leave it to others to decide whether the political markets also failed.”


ABOUT THE ROCKEFELLER INSTITUTE OF GOVERNMENT

The Nelson A. Rockefeller Institute of Government, the public policy research arm of the State University of New York, conducts fiscal and programmatic research on American state and local governments. It works closely with federal, state, and local government agencies nationally and in New York, and draws on the State University’s rich intellectual resources and on networks of public policy academic experts throughout the country.