Governor Paterson proposes 'Obesity Tax,' a tax on non-diet sodas

BY GLENN BLAIN and KENNETH LOVETT

DAILY NEWS ALBANY BUREAU

Sunday, December 14th 2008, 11:37 PM

ALBANY - A can of Coke could soon cost New Yorkers more than just calories.

Gov. Paterson, as part of a $121 billion budget to be unveiled Tuesday, will propose an "obesity tax" of about 15% on nondiet drinks.

This means a Diet Coke might sell for a $1 - even as the same size bottle of its calorie-rich alter ego would go for $1.15.

Paterson's budget also calls for a 3% cut in education spending, a $620-a-year tuition hike at SUNY and a $600 increase at CUNY - and about $3.5 billion in health care cuts, a source said.

The Democratic governor will not call for a broad-based income tax boost, but he will push to restore the sales tax on clothing and footwear.

The drastic belt-tightening comes as lawmakers struggle to close a $15 billion deficit this year and next.

"It's painful to make these decisions," Paterson said Sunday.

State employees again will be asked to forgo their 3% raises next year and defer five days' pay until they leave their jobs, the source said. In all, Paterson will propose about $9 billion in cuts, $4 billion in new taxes and fees, and $1.5 billion in nonrecurring revenue, a second source said.

The so-called obesity tax would generate an estimated $404 million a year. Milk, juice, diet soda and bottled water would be exempt from the tax.

"I'll just buy less," said Victor Lopez, 55, of Manhattan, as he drank a Coke at a midtown Subway store.

"I don't like to buy Diet Coke," said Amaury Garcia, 16, who works at a flower shop in Penn Station. "I'll just not buy any sodas if it goes up."

Public health advocates welcomed news of the tax, saying it would help the fight against childhood obesity.

"Raising the price of this liquid candy will put children and teens on a path to a healthier diet," said Elie Ward of the American Academy of Pediatrics of New York State.

The Paterson administration also announced steps yesterday to expand the state's social services net, including a 30% increase in welfare payments over three years starting January 2010, increased money for food banks and expanded access to the state's Family Health Plus program.

Paterson also hopes to make it easier for people to enroll in Medicaid by eliminating face-to-face interviews and fingerprinting requirements.

klovett@nydailynews.com

With Edgar Sandoval and Erica Pearson