NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

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F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

Kidd

 

DATE TYPED:

2/10/03

 

HB

 

 

SHORT TITLE:

Soft Drink Tax Act

 

SB

139

 

 

ANALYST:

Neel

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

20 % of tax revenue

 

 

Recurring

Dept. of Health

 

80% of tax revenue

 

 

 

UNM School of Medicine

(Parenthesis ( ) Indicate Expenditure Decreases)

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

$0.1

$0.1

Recurring

Soft Drink Tax

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

LFC files

 

Responses Received From

Department of Health (DOH)

Health Policy Commission (HPC)

 

No Response from: Taxation and Revenue Department (TRD)

 

SUMMARY

 

     Synopsis of Bill

 

Senate Bill 139 (SB139) would enact legislation to tax soft drinks, and to appropriate the net receipts attributable to the tax to diabetes prevention, public education, research and treatment of patients with diabetes.

 

The tax imposed is $2.00 per gallon of soft drink or soft drink syrup sold or offered for sale in New Mexico, and $0.21 per package or container of soft drink powder, syrup or other base product.

 

Soft drinks sold to or by any instrumentality of the armed forces of the US engaged in retail activity are exempt from this tax.

 

            The net receipts from the tax imposed by the Soft Drink Tax Act are to be distributed as follows:

 

            A)  20% to the Department of Health for diabetes prevention and public education

            programs.

 

B)     80% to the University of New Mexico School of Medicine for research on diabetes

            and treatment of patients with diabetes.

 

FISCAL IMPLICATIONS

 

No fiscal impact is noted to the general fund.  However, marginal impact may be seen in gross receipts when tax increases are passed to consumers.

 

OTHER SUBSTANTIVE ISSUES

 

According to DOH:

            Approximately 1 in 11 adults in New Mexico has diabetes, according to the NM

            Behavioral Risk Surveillance System, (BRFSS) 2000 data.

·        120,563 New Mexicans have diabetes. Of these:

ü      85,181 know they have diabetes.

ü      35,382 do not know they have diabetes.

·        American Indians are about 3 times more likely to have diagnosed diabetes than non-Hispanic Whites.

·        Hispanics, as well as African-Americans, are about 2 times more likely to have diagnosed diabetes than non-Hispanic Whites.

·        In New Mexico, 2000, diabetes was the 6th leading cause of death and represented 3.7% of all deaths in New Mexico.  Nationally, diabetes was also the 6th leading cause of death but represented only 2.9% of all deaths in the United States. 

 

Hospital Inpatient Discharge Data collected by the HPC shows that in 2000, diabetes was one of the top 10 reasons for hospitalization among the following groups:

·        For males 19 – 44 years, the 5th most common reason

·        For males ages 45 – 64, the 6th most common reason

·        For females ages 45-64, the 7th most common reason

 

 

National Statistics

 

            According to the Centers for Disease Control:

·        Among persons aged 18 years and older in the U.S., in 2000, 6.1% of all people in this age group had diagnosed diabetes.

·        In comparison, among persons aged 18 years and older in N.M., 6.5% had diagnosed diabetes, higher than the national average.

 

Long Term Complications

 

The risk of cardiovascular disease and stroke are 2 to 4 times higher in people with

            diabetes.  (Centers for Disease Control)

·        Over half of adults with diabetes in New Mexico have been told by a doctor that they also have high blood pressure (BRFSS, 2000).

·        New Mexicans with diabetes are about 3 times more likely than those without the disease to have been told by a doctor that they have high blood pressure (BRFSS, 2000).

·        In 1999, there were 17,775 diabetes-related hospitalizations in New Mexico, 5619 of which were for cardiovascular disease.  (CDC,Burden of Diabetes in the United States, 1999).

 

Primary Prevention

 

According to the Diabetes Prevention and Control Program (DPCP) at DOH, additional funding from the Soft Drink Tax Act would enable DOH to continue further educational and prevention programs as diabetes rates increase among populations in New Mexico.  DPCP would also be able to increase funding to the Coordinated Approach to Child Health (CATCH) ,a coordinated school health program designed to increase physical activity, improve dietary choices and prevent tobacco use.  This intervention provides elementary age children with tools and knowledge to make healthy choices and change health behaviors.  The DPCP is funding at lease 37 elementary schools for FY 03. 

 

SN/njw