Clean Water Advocacy - Newsroom - AMSA in the News
National Tax On Drinks Would Build Waterworks
Tuesday, January 25, 2005
John C. Kuehner
Plain Dealer Reporter
Water and sewer agencies want a national tax on beer, soft drinks and other
beverages to pay for construction projects across the country.
The proposed 6.6 percent tax, modeled after the federal gasoline tax that
supports highways, could raise $10 billion a year.
The tax would cover all beverages, including wine and liquor, that are in cans,
bottles or other containers. It excludes milk, baby formula, fruit juices and
health-required beverages.
"We need a national solution," said William Schatz, legal counsel for the
Northeast Ohio Regional Sewer District and president of the Association of
Metropolitan Sewerage Agencies. "It can't be done at the local level."
AMSA, which represents sewage treatment agencies, has prepared a draft bill that
it will seek to have introduced in the House and Senate this year. The bill,
still being revised, would create a Clean Water Trust Fund to provide money for
sewer and water projects.
No one has been approached yet to sponsor the bill, Schatz said.
Money would be set aside for projects in specific regions, such as the Great
Lakes, Chesapeake Bay and Gulf of Mexico. Remaining money would go to the states
to dole out.
Studies show that a $23 billion gap exists yearly for the next 20 years between
money spent on sewer and water projects across the country and what is needed,
said Ken Kirk, executive director of AMSA.
For example, the regional sewer district faces more than $1.3 billion in
federally required pollution-control projects in Greater Cleveland. Officials
predict they will need to double its rates by 2013 to pay for the work.
Columbus, Toledo, Cincinnati and Akron also face large bills for pollution
control projects.
"If we don't do something, it's going to get worse," Kirk said. "It's not going
to get better."
Beverages would be taxed because they require an abundance of clean water, Kirk
said.
The Ohio soft drink industry opposes the tax because it's arbitrary and
discriminatory, said Kimberly McConville, executive director of the Ohio Soft
Drink Association.
"It would really impact the people who could least afford to pay, single heads
of households and seniors," she said. "We're sympathetic, but we don't think
this is the way to raise money."
Industry leaders are trying to build a coalition of beneficiaries of clean
water, such as conservation, hunting and fishing groups, to help create the
fund.
The Natural Resources Defense Council supports the idea, said Nancy Stoner,
director of the group's Clean Water Project.
"We have a serious and growing problem of deteriorating water infrastructure,"
she said.
Cleveland Water Commissioner Julius Ciaccia said the water industry so far has
been slow to embrace the idea, especially the privately owned water companies.
"We're not against it," said Ciaccia, who heads the American Water Works
Association utility council. "The biggest concern we have is once you put a bill
out there, and the people you are trying to tax lobby against it, and they will,
there is some fear that Congress would institute a water tax on our bills.
That's the core fear."
Starting in the 1970s, the federal government provided grants to fund sewer
projects to clean up pollution. That ended in 1987 and became a loan program,
which provides about 7 percent of the money for sewage projects, Kirk said.
Customers pay the other 93 percent from their water and sewer bills.
Unlike the sewer industry, the water industry has relied solely on water rates
to pay for construction projects, Ciaccia said.
Kirk said other ideas have been considered, including a tax on companies that
discharge into waterways.
Next month, sewer and water officials will meet in Washington, D.C., with large
bottlers, such as Coors, Coca-Cola and Pepsi, to discuss the idea, Schatz said.
"We think it's a good time to get the debate started, even with a conservative
Congress that will not be interested in initiating new taxes," Schatz said. "No
one wants to pay an additional tax. But on the other side, how do you pay for
these programs?"
To reach this Plain Dealer reporter:
jkuehner@plaind.com, 216-999-5325
© 2005 The Plain Dealer. Used with permission.