Lawmakers in Boulder, Colorado approved a November ballot question asking voters to adopt a large tax hike on soda and other sweetened beverages sold to consumers in the city.
Lawmakers’ vote came after a county judge rejected a challenge from a local taxpayer who claimed the ballot question is unconstitutional.
The challenge, filed by Boulder resident Mark Gelband, alleged the ballot question violates Colorado’s Taxpayer Bill of Rights (TABOR) law. In September, Norma Sierra, a judge for the 20th Judicial District Court, dismissed Gelband’s complaint, clearing the way for the question to be considered by voters in the upcoming election.
TABOR is an amendment to Colorado’s state constitution. It requires all local governments to obtain permission from voters before taxes can be increased. It was passed in 1992.
The ballot question asks voters to approve charging grocery stores and other distributors two cents per ounce of sweetened beverage sold to consumers, adding about $1.35 to the price of a two-liter bottle of soda. Sales of soda, juice drinks, sweetened bottled coffee and tea drinks, and energy drinks would also be taxed.
The soda tax petition describes the initiative as “setting forth the procedures for […] the collecting, tracking and reporting of an excise tax on sugar-sweetened beverages.” Opponents of bringing the proposal before voters say it fails to adequately include language explaining that the ballot question proposes a tax increase.
Ballot Question Requirements
Robert Natelson, a senior fellow in constitutional jurisprudence at the Independence Institute, says he disagrees with Sierra’s ruling. Natelson says TABOR requires lawmakers to be honest with voters about tax questions.
“TABOR included some rules for ballot titles,” Natelson said. “One of the rules is that the ballot title states right up front that this is a tax increase and tells voters how much of an increase it is. The ballot title has to have certain wording in it.
“There is a section of [TABOR] that applies to voter initiatives like this sugary drink tax,” Natelson said. “It says that the ballot title has to appear on every page of the petition. If it is not there, it is not valid.”
Soda tax opponents, including Natelson, say the ballot initiative does not meet this requirement because it doesn’t have a title.
‘Lazy Health Policies’
Adam Hoffer, an assistant professor of economics at the University of Wisconsin–La Crosse, says taxing consumption doesn’t improve public health and has a disparate effect on lower-income people.
“Consumption taxes are lazy health policies,” Hoffer said. “Consumption taxes do little to promote public health. Instead, these taxes become a revenue source that is used to fill budget holes. In dollars and cents, every dollar of tax collected from this tax, an estimated $150 million annually, would come from pockets of already heavily taxed American consumers and businesses. Lower-income families would be the most burdened by the tax.”
Hoffer says there’s little evidence suggesting consumers react to soda taxes in the ways lawmakers think they will.
“Policymakers love to assume those consumers will switch to water, but researchers have found that to be unlikely,” Hoffer said.