FY2011 House 2 Budget Recommendation:
Issues in Brief
Deval L. Patrick, Governor
Timothy P. Murray, Lt. Governor
The Administration is dedicated to ensuring the highest quality of health and wellness for each of the Commonwealth’s residents. Individual wellness is determined partly by healthy lifestyles and healthy choices. The Commonwealth strives to provide information and support for each Massachusetts resident to make healthy choices for themselves.
Last year, the Commonwealth took strides to encourage healthy choices and support prevention-focused programs that target the wellness of Massachusetts residents through the repeal of the sales tax exemption on alcohol. The $81 million in revenue collected from this initiative allowed the Commonwealth to continue to provide high levels of substance abuse prevention and intervention funding, despite the fiscal challenges threatening these critical programs.
The Governor’s fiscal year 2011 budget proposes eliminating the exemption for soda and candy. In addition to generating over $50 million for public health programs, the repeal of the sales tax exemption is a critical first step to discouraging the consumption of these unhealthy items. Net proceeds generated from removing these exemptions, as well as the $100 million in sales tax revenues estimated to be collected in fiscal year 2011 from alcohol sold in package stores, will be deposited into the Commonwealth Health and Prevention Fund to support critical public health programs. All other food products that are currently exempt from the sales tax will remain exempt, in line with the exemption’s original intent to ensure the affordability of necessary goods.
Childhood obesity is an epidemic in Massachusetts and the nation. Obesity in children has tripled since 1980. More than half of adults and nearly one in three high school and middle school students are overweight or obese. Consequently, the percentage of adults in Massachusetts with Type 2 diabetes has nearly doubled in the last decade. Diabetes not only causes serious illness and premature death, but also is costly.
Risk Factor Surveillance System 2000-2008.
Bureau of Health Information, Statistics, Research, and Evaluation. Massachusetts Department of Public Health. 2010.
Consumption of candy and soda is on the rise. Per capita candy consumption has increased steadily since the mid-1980s. Candy and soda add significant non-nutritional calories to the diets of Americans and are directly linked to obesity, especially among children. [ Associated Press. Scientists Target Soda as Main Cause of Obesity. 6 March 2006. ] One bottle of soda contains more than double the recommended daily sugar consumption and accelerates associated public health concerns and costs. The daily number of teaspoons of ‘added sugar’ recommended for a healthy diet and weight is between 5 and 9; a 20 ounce bottle of soda alone contains 17 teaspoons of added sugar. Such added sugar intake increases a child’s propensity towards obesity by 60%. [ UCLA Center for Health Policy Research, http://www.vcstar.com/news/2009/sep/17/ucla-study-directly-links-soda-with-obesity/ ] Children and adults who consume calorie-laden ‘junk’ foods have less appetite for healthier foods at meal time, creating a vicious cycle of calorie intake and nutritional deficiencies.
In addition to posting calorie information on the menu boards of chain restaurants and providing parents with the Body Mass Index number of their children, Massachusetts will support various other nutrition and wellness programs via the revenue collected by repealing the sales tax exemption on candy and soda. The Working on Wellness Program, a project that engages public and private employers to establish internal infrastructures to support wellness programs that will improve the overall health and productivity of employees, has expanded to 23 employers reaching over 20,000 Massachusetts workers. These revenues are critical to make further progress in innovative wellness programs and mitigate deeper budgetary reductions in programs that support health and prevention activities.
Massachusetts joins 40 other states that apply sales taxes to soda and candy products in this effort to promote public health and minimize the escalating costs associated with obesity.
|Regional States That Apply Sales Tax To Candy and Soda|
|Other States That Apply Sales Tax To Candy and Soda|
District of Columbia
Source: The MayaTech Corporation and the Institute for Health Research and Policy, University of Illinois. State Snack and Soda Taxes from 2003-2007: A Public Health Policy Approach to Discouraging Consumption of Snacks and Soda. 2007.
Massachusetts has long been an innovator in health care and public health. The public health programs that serve the people of the Commonwealth reflect the Administration’s commitment to preventative care and wellness services. $151.7 million ($51.7 million of which is new revenue generated from eliminating exemptions on soda and candy, while $100 million is from last year’s repeal of the sales tax exemption for alcohol), will be dedicated to the Commonwealth Health and Prevention Fund. The fund will be used to support critical programs within the Massachusetts Department of Public Health, including:
|Account Distribution||Account No.||% Funded from
|Addiction Control Services||4510-0700||100%||$81,184,876|
|Smoking Prevention and Cessation Programs||4590-0300||90%||$4,725,969|
|Health Promotion, Violence Prevention and Workforce Expansion||4510-2500||83%||$33,520,467|
|Children's Health and Nutrition||4512-0120||83%||$32,268,688|
|Total Wellness Fund Spending||$151,700,000|
Prepared by Kelly Driscoll, Executive Office for Administration and Finance ·
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