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December 19, 2008

American Beverage Association
Press Release

Assembly Analysis Shows NY Governor's Budget Imposes Drastic Hike of Nearly $4,000 for Average Family and Puts their jobs in Jeopardy


ABA Press Office                         

(202) 463-6770

Assembly Analysis Shows NY Governor's Budget Imposes Drastic Tax Hike Of Nearly $4,000 for Average Family and Puts Their Jobs in Jeopardy

A Devastating Double-Blow to Families Struggling In a Recession

WASHINGTON, D.C. - The average New York family - already struggling to keep their homes and protect their jobs in the middle of a debilitating recession - would be hit with a nearly $4,000 tax hike as a result of the 137 tax and fee increases Gov. David Paterson proposed this week, according to a new report issued today.


The analysis was done by the Assembly Republican Ways and Means Committee and made available by Assembly Republican Leader Jim Tedisco. The analysis also shows that the tax hikes could lead to the loss of 1-in-10 jobs in New York.


The report reinforces the concerns raised by the non-alcoholic beverage industry that the 18 percent tax hike on regular soft drinks and the 5-cent-per-container tax on bottled water and juice will further imperil family budgets as well as the good-paying jobs with benefits the industry provides in communities large and small.


"It's mindboggling that in the middle of a recession, the governor would impose a $4,000 tax hike on the very families who can least afford to take on this financial hit," said Kevin Keane, senior vice president for public affairs at the American Beverage Association (ABA), which represents the non-alcoholic beverage industry. "In an economy like this, the last thing that government should be doing is raising taxes on hard-working families."


The ABA strongly dismisses as a façade the state's claims that the soft drink tax is meant to prevent obesity, as singling out one product is not going to make a dent in such a complex problem as obesity. Science and common sense do not support the assertion that soft drinks uniquely contribute to obesity. Serious efforts to combat the real challenge of obesity would center on helping families eat all foods and beverages in moderation and getting them up and exercising more, particularly our increasingly sedentary children.

Furthermore, if the governor's tax policies were really intended to address obesity - rather than just grab money - he wouldn't be taxing health club memberships as well. 

"Let's be realistic. This is purely a money grab from hard-working families who have no money left to grab in this tough economy," Keane said. "It's disturbing to see some perpetuating the myth that taxing one product will make a difference in obesity, or even contribute to fighting the problem. It won't."


The beverage industry in New York provides a hand up to the economy at a time when other industries are coming to government for a hand out. It supports 160,000 good-paying jobs with good health benefits, with many of those being union jobs. The industry also has a direct economic benefit of $7 billion to the New York economy and an indirect benefit of $25 billion.


State government needs to address its budget crisis the same way hard-working families are coping with their budget troubles: by tightening their belts and spending less.  Instead the governor is passing the buck - actually 4,000 bucks - to the hard-working families of New York, already struggling through tough economic times.


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The American Beverage Association is the trade association representing the broad spectrum of companies that manufacture and distribute non-alcoholic beverages in the United States.


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