Robyn Shaber left the ShopRite in Cardiff in Harford County, Maryland, last week with her grandson and at least 24 plastic bottles of Coca-Cola and Mountain Dew.
“This is probably a couple days’ worth,” said Shaber, whose husband drinks a lot of soda.
Even with a sale — two packs for $12 and two more for $10 — soda prices keep going up, she’s found. If Maryland starts taxing sugary beverage distributors as has been proposed in Annapolis, Shaber plans to stop buying soda at the ShopRite, just feet from the Mason-Dixon line, and buy it instead in Pennsylvania, where she lives.
Consumers, business owners and experts are facing off over a controversial state bill crafted to address Maryland’s growing budget deficit.
Advocates say sugary beverage tax will help plug up a deficit and lead to a healthier community by discouraging the consumption of sweetened beverages. Revenue estimates show the 2-cent-per-ounce excise tax on distributors of sugary beverages, powders or syrups is projected to reach $500 million in fiscal 2027.
But opponents argue that taxing the popular beverages will only hurt families, workers and small businesses. House Republicans have called the proposal a “Slush Tax.”
At Brookville Market, a small grocery store in affluent Chevy Chase bordering Washington, the store manager of 18 years said he didn’t think such a tax would affect sales.
“If people want to buy a product, no matter what the tax is, they’re not going to buy less because of a 2-cent tax,” Joe Wong said.
Under a House bill sponsored by Montgomery County Del. Emily Shetty and Del. Joseline Peña-Melnyk, who represents Prince George’s and Anne Arundel counties, a sugary beverage is a drink containing added sugars or artificial sweeteners. It does not include natural fruit or vegetable juices, milk, infant formula, beverages for medical use or alcoholic beverages.
Plans call for nearly half of the projected tax revenue raised to go toward funds for healthy school meals and child care scholarships. Most of the rest would flow to the state’s general fund, though a new amendment could provide a health equity fund with about $15 million.
“This bill is a public health bill,” Shetty said at a House Ways and Means Committee hearing earlier this month. “It will decrease consumption of sweetened beverages while investing in universal school meals for children,” and other health needs.
Stephanie Joseph, a Silver Spring resident and state employee, said she supports Shetty’s bill.
“It’s a tight budget, and it’s a healthy way to help Marylanders,” she said while shopping at Snider’s Super Foods in Silver Spring with her two children. “I rarely buy sodas, mainly just for parties.”
The proposal may be a way for the government to create a solution through the problem itself, said JP Krahel, a professor of accounting at Loyola University’s Sellinger School of Business who specializes in tax issues. He argues that the consumption of sugary drinks will raise revenue to combat health problems that stem from those drinks.
“A small tax on each of us may lead to large benefits,” Krahel said. “A targeted tax measure like this may help to plug Maryland’s multi-billion dollar deficit in a way that still gives consumers choice but encourages healthier drink options. There are worse ways to plug a budget deficit than to link something to health concerns.”
While no one likes higher taxes, “I also don’t like the idea of falling ill from drinking too much sugar and everyone pays the bill for increased ER visits,” he said.
But higher costs on sugary drinks in Maryland could prompt consumers who live close to Pennsylvania, Delaware and Virginia to frequent stores in neighboring states, hurting retailers in Maryland, said Daraius Irani, chief economist and a vice president of strategic partnerships and applied research at Towson University. Meanwhile, people who lack transportation or live in lower-income areas may shoulder higher burdens, having fewer options and paying more when they want to buy sweetened drinks, he said.
Judy Lee, a York County resident from Susquehanna Trails, said she and her family constantly pick and choose between Maryland and Pennsylvania for different purchases. Gas is currently cheaper on the Maryland side, while vape cartridges cost less in Pennsylvania, she said. Lee believes soda will be another factor that tips the balance in favor of Pennsylvania.
“I’m just tired of the way we’re being taxed every which way,” she said.
Ron Hash, a Pennsylvania resident who regularly shops with his wife at the Harford County ShopRite in Cardiff, echoed those sentiments, saying he needs to keep his family living within its means and the government should too.
“When you’re in government, you don’t care,” he said. “They spend millions and billions because they think the tax money is just like Niagara Falls, just keeps coming in.”
If sales actually decline because of the beverage tax — a likely outcome if people switch beverage types to avoid the tax — it may be difficult to reach state revenue goals, Irani warned.
“There’s a lot of moving parts, but that sales number is not going to be the same sale number that it was,” Irani said. “Another challenge is once you open the door to this, do you open the door to other taxes, and does this stay at 2 cents or go to 3 cents?”
Irani said a similar tax in Philadelphia led to a drop in sugary drink sales and some related job losses.
That would happen too in Maryland, warned William Davis, president of Teamsters Local 639, the union representing hundreds of workers employed in production plants and distribution centers and as truck drivers in the state’s beverage and soft drink industry.
“When prices go up, sales go down,” Davis said in a March 5 letter to the chair of the House Ways & Means Committee. “It is the men and women who manufacture, package and deliver these products who would suffer from a decrease in sales.”
Two recent polls on the 2-cent tax had opposite findings. A Gonzales poll, commissioned by the American Heart Association, found a majority of state voters, or 63%, favor the tax. But another survey, by David Binder Research, shows that a majority of voters, or 56%, oppose it. That survey was done on behalf of the Alliance For An Affordable Maryland with support from the American Beverage Association and in partnership with the MD-DE-DC Beverage Association.
Imposing taxes and boosting prices on products the government deems unhealthy is not the way to go, said Lee Hartman, who was shopping at Safeway on Harpers Farm Road in Columbia last week. It should be up to parents to decide whether or not they want to buy sugary drinks for their children.
“I know sugary drinks aren’t healthy for little kids, but I think parents can regulate that without a tax,” said Hartman, a Columbia resident.
Wong, the Brookville Market grocery manager said that when alcohol taxes took effect in Maryland, it didn’t change his shoppers’ buying habits.
“People didn’t stop buying wine with that tax,” he said. “I saw no difference.”
Lisa Martin, a resident of Hampstead in Carroll County, said she only buys a liter of ginger ale about twice a month so an added tax is “no biggie to me.”
David Olive, a Washington resident shopping last week at Brookville Market, said he doesn’t typically drink a lot of carbonated beverages and didn’t change his habits after Washington imposed a beverage tax on sugary drinks. Washington’s tax is similar to Maryland’s proposal.
A few miles away from Brookville in Silver Spring, Luis Quintino, the manager of La Salvadorenita Grocery, had another view. He does expect sales to be impacted if the legislation passes.
“Actually right now it’s really tough because everything we buy is more expensive, and everything is going to go up,” Quintino said.
The store has already stopped buying Coca-Cola products because the pricing has increased so much, he said.
“Right now, we buy more water.”
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