Testimony: SB 1004: A Tax on Soft Drinks in Texas
Senate Finance Committee
April 18, 2011
Members, I am Dr. Stephen Pont, a father of two young Texans and the Medical Director at the Texas Center for the Prevention and Treatment of Childhood Obesity, located at Dell Children's Medical Center. I also serve as the Medical Director of Austin Independent School District’s Student Health Services. I am here today as a practicing pediatrician and as a representative of the more than 3,000 pediatrician and medical student members of the Texas Pediatric Society as well as the Seton Family of Hospitals.
The Texas Pediatric Society and the Seton Family of Hospitals support implementing a penny-per-ounce tax on soft drinks as an effective strategy to fight obesity. Obesity, a condition that strikes nearly 1 out of every 4 Texas children by the fourth grade, [i] harms every organ system in the body. It ravages quality of life, shortens lifespans, and carries serious financial consequences for Texas.
Obesity in adolescence is linked to a heightened risk for type 2 diabetes, depression, cancer, stroke, heart disease, death before age 30, and a host of other costly ailments. Treatment for obesity-related illnesses accounts for a significant portion of the overall cost and the growth in spending in Texas Medicaid. In fact, rising obesity rates are estimated to have caused 27 percent of the spike in overall health care spending between 1987 and 2001. [ii] Additionally, obesity is such a substantial threat to Texas business that the state Comptroller recently released a report focused on the negative impact that obesity has on Texas’ businesses. Texas businesses lose $9.5 billion per year to obesity, due to increased health care costs, absenteeism, and reduced productivity. [iii] By 2030, the cost of obesity to Texas businesses will top $30 billion, according to the state Comptroller.
Consumption of sugar-sweetened beverages is not the only cause of obesity, but it is a far bigger factor than most people realize. Many medical journals including the Journal of the American Medical Association and Pediatrics have documented the strong link between consumption of sugar-loaded drinks and obesity, as well as its related illnesses. [iv] The components in many of these drinks, which are made with high doses of sugar and high fructose corn syrup, get metabolized by the body through the liver, leading to insulin resistance, then increasing an individual’s risk of heart disease, type 2 diabetes, and even cancer.
The case for taxing these drinks, just as we do other products with serious public health consequences like tobacco and alcohol, has been made convincingly by entities as authoritative as the Institutes of Medicine.[v] An important distinction is that sugar-loaded drinks, unlike tobacco and alcohol, are not only legal for children to buy, but—thanks to a marketing juggernaut that spends hundreds of millions of dollars targeting children—they are also disproportionately purchased by young consumers. Fortunately, these same consumers are among our most price-sensitive. With the right incentive, this means they would be likely to make healthier choices. That’s one reason the United States Department of Agriculture found that a tax similar to the one proposed in SB 1004 would result in an average weight loss of 4.5 pound annually for an overweight child, nearly a pound more per year than an adult’s expected weight loss from the tax.[vi]
One thing is certain: doing nothing, in the face of a health crisis so serious, is an extremely costly choice for our state and its businesses to make. Taxpayers pick up the tab each day for the missed opportunity to reverse an obesity trend that costs more with each passing year.
As pediatricians, we can and will continue to provide children and families with guidance, skills, and assistance with obesity-related medical problems. Nonetheless, many parents and children face challenges when they return to unhealthy community environments, where milk, 100 percent fruit juice, and even water often cost more than the nearest soft drink. We can try to teach our patients to swim, but we are still sending them back into a hurricane of aggressive marketing of unhealthy choices. Price adjustments such what this tax will provide, will encourage children to make healthier choices and will provide a revenue that might further positively impact the obesity epidemic that currently threatens our great state of Texas. I hope that you will consider supporting this bill which I feel will improve the health of our youngest Texans.
[i] Hoelscher D.M., Perez A., Lee E.S., Sanders J., Kelder S.H., Day R.S., Ward J. School Physical Activity and Nutrition (SPAN) III Survey, 2004-2005. UT School of Public Health, Houston.
[ii] Cawley, J. The Economics of Childhood Obesity. Health Affairs 20, No.3 (2010), p. 366 (citing data from Thorpe, K.E., Florence, C.S., Howard, D.H., Joski, P. The impact of obesity on rising medical spending. Health Affairs (Millwood). 2004;23:w480-6.)
[iii]"Gaining Costs, Losing Time: The Obesity Crisis in Texas," Susan Combs, Texas Comptroller of Public Accounts. 2011. Available: http://www.window.state.tx.us/specialrpt/obesitycost/.
82nd Texas Legislature Testimonies