A solution to ease part of the financial crisis in Oklahoma may come through soda beverages.
State Rep. Jerry Ellis, D-Valliant, has submitted a bill that would levy a $2 tax on all soft drink syrup or simple syrup sold in Oklahoma. This equates into a 21 cent tax on every gallon of soft drink.
"This is a reasonable alternative to raising property, sales or fuel taxes," Ellis said.
During the course of his short time in office, (he was elected in November last year) Ellis has traveled through his district to discuss the bill. He said there has been widespread support for this bill, especially when compared to support for a tax on fuel or a sales tax.
The 21 cent per gallon tax increase would equal approximately 3 cents per 16-ounce drink and produce $55 million to $60 million into state revenues, according to Oklahoma House researchers. If the tax were increased to 5 cents per drink, Ellis said the revenues would produce a total of $110 million, more than one-sixth of the revenue shortfall Oklahoma is currently facing.
The Office of State Finance projects the state Legislature will have to cut the budget by $600 million.
"(My constituents) think this is a good way to do it," Ellis said. "When looking at the other possibilities, they said this would be a better way to help the crisis without hurting other areas."
The money would go to the General Revenue Fund for the state Legislature to appropriate to departments and agencies, including education.
Sean McBride, director of communications for the National Soft Drink Association, said the soft drink producing plants in Oklahoma are not happy about the bill. While unsure what companies in the state will do, McBride said there is some unfairness to levying an additional tax on a specific food or beverage.
"The soft drink industry already pays $2.7 million to the state," McBride said. "We feel the beverage already pays their fair share of state revenues."
Several states have similar bills on their agendas, and Arkansas already has the tax, which produces $40 million a year.
McBride noted that the trend has not been for the tax, but against it among states.
"Since 1993, nine states and local governments have repealed a soft drink tax," McBride said. "We're seeing a lot more proposals, but not much action."
While the manufacturers are not happy with the bill, some students said they do not mind the few cents it would cost to help with the budget shortfalls.
"Things that cost more are bad, but budget crises are also pretty bad," said Matt Fry, letters sophomore. "I'd be willing to pay 2 to 5 cents more to help out the university."
McBride said the tax increase on manufacturers could either cause an increase of soft drink costs or cause lay-offs in the production plants.
Likita Moore, pre-pharmacy sophomore, said the additional cost is not too bad.
"The state of Oklahoma is in a bad financial strain," Moore said. "If it would help get us out of this financial problem and help the schools, then I don't mind."
The bill, labeled House Bill 1332, will be taken up by the State House Revenue and Taxation Committee in the next couple of weeks.
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