House OKs bill to tax sugary drinks

The House of Representatives passed yesterday a bill that would impose a tax on sugar-sweetened beverages and concentrates as a means to discourage the consumption of sweets, blamed for the soaring rate of non-communicable diseases in the Commonwealth.

House Bill 19-91, which ultimately became H.B. 19-91, HD4 after revisions, passed on 17 “yes” votes, one absence, and one dissenting vote from Rep. Ralph Yumul (Ind-Saipan), whose floor amendment to allocate 75 percent of the proceeds from the tax to diabetes and obesity awareness program was defeated in a vote that straddled party lines.

Under the bill, introduced by Rep. Felicidad Ogumoro (R-Saipan), a tax rate of 4 cents per fluid ounce will be imposed on all sugar-sweetened beverages and all sugar-sweetened syrup and powder.

Ogumoro said she introduced the so-called “sugar tax bill” to help combat the high incidence of NCDs in the Commonwealth, particularly diabetes.

The bill now heads to the Senate for action.

Sugar taboo

The bill’s findings cite recent studies of the obesity rate in the CNMI, which is 50 percent higher than obesity rates in the U.S. mainland.

Members of the Non-Communicable Disease Alliance came forward with written and oral testimonies in support of the bill.

According to Public Health-NCD Bureau administrator Becky Robles, “sugary drinks are American’s single biggest source of added sugar, and are often marketed to children, but they offer little to no nutritional value.”

She added, “Increasing the price of SSBs [sugar-sweetened beverages] will make the alternative—untaxed options such as water, 100 percent fruit juice, and unsweetened tea—more enticing to the largely price-conscious consumer population of the CNMI.”

NCD Alliance chair Dr. Don K. Hardt said he sees first-hand the tragic consequences of obesity and diabetes, with 173 currently on dialysis in the Commonwealth.

He cited a smaller-scale study on imposing a tax on soft drinks that had positive results in Mexico, with sales of soft drinks decreasing 12 percent and sales of water rising after the bill became law.

Patricia Coleman, program leader of NMC-CREES Nutritional Health and Programs, said 30 percent of children in the CNMI are already overweight and obese and one of the main culprits is over-consumption of SSBs.

Among children, one additional serving of SSBs per day increases the chances of being obese by 60 percent, she said.

Coleman also made a brief demonstration of how much sugar is usually in the House members’ favorite drinks.

Divvying the fund

During yesterday’s deliberation on the bill, which took a lion’s share of the protracted session from 1:30pm to nearly 6pm, House members debated how funds from the Special Healthcare Impact Account created by the tax would be appropriated.

Under the bill, the fund would be evenly split to pay off the Commonwealth Healthcare Corp.’s outstanding debt with the Marianas Public Land Trust and programs to raise awareness on the pitfalls of obesity, specifically diabetes.

Yumul called for reducing CHCC’s portion of the Special Healthcare Impact Account from 50 percent to 25 percent, but his amendment was defeated via party lines with the Republican majority siding with Ogumoro’s appeal to keep the even 50-50 split.

Rep. Edwin Propst (Ind-Saipan) supported Yumul’s amendment, saying that debt service should not supersede the original intent of the bill, which is to combat obesity and diabetes.

House Speaker Joseph P. Deleon (Ind-Saipan) said he initially supported giving more money to obesity and diabetes awareness programs, but changed his mind because giving money to help CHCC pay off its MPLT loan would ultimately help diabetes sufferers in the long run.

He said CHCC can better help its patients, including those with diabetes, if less of their annual budget is diverted into servicing the MPLT loan, which according to Ogumoro stills stands at $3.2 million. That translates to the hospital paying $21,000 a month to the trust.

Rep. Antonio Sablan (Ind-Saipan) also called for colleagues to help CHCC pay off its debt to MPLT by maintaining the 50-50 sharing of the Special Healthcare Impact Account.