Michigan Legislature Votes To Ban Local ‘Sin Taxes’ On Food, Beverages

LANSING (AP) – Michigan municipalities would be prohibited from levying local taxes on food and beverages under a bill advancing to Gov. Rick Snyder’s desk for his expected signature.

No local government in Michigan is now considering such a tax. But lawmakers say it is possible, pointing to Philadelphia and Chicago as places with soda taxes. Similar taxes have been approved in San Francisco and Oakland, California.

The Republican-led Michigan Senate voted 30-5 Thursday to send the fast-tracked legislation to the governor.

The Chicago-area’s penny-per-ounce tax on soda and sweetened drinks was repealed Wednesday after a months-long conflict that included a court battle and millions of dollars’ worth of television ads on both sides.

Michigan generally exempts food, food ingredients and drinks sold at grocery stores from the state sales tax. The tax is applied to food and beverages prepared by restaurants. The state has separate excise taxes on beer, wine, liquor and cigarettes.

The Senate bill’s sponsor, Republican Sen. Peter MacGregor of Rockford, said local soda taxes are “a revenue grab” and he wants to make sure no Michigan counties and cities follow suit to “destroy local economies” and “hurt a huge segment of our population.”

“It could really hurt the direction our state is going in,” he said. “I want people to invest in our state still.”

Some Democrats voted against the legislation.

Sen. Rebekah Warren of Ann Arbor said it would have “absolutely zero immediate practical impact” since no local governments are proposing such a tax. Municipalities are struggling to address infrastructure needs and unfunded retiree pension and health care liabilities, she said.

“We should be working together … to give our local communities the tools to strengthen municipal finance because standing here to take one more tool away just puts them in an even tougher position,” Warren said.

The measure was supported by business groups along with advocates for the poor, who spend a higher portion of their income on food. It was opposed by local governments and health groups.

In testimony submitted last month, the American Cancer Society Cancer Action Network said 20 percent of all cancers are caused by poor diet, physical inactivity, excess weight and too much alcohol consumption. Taxing sugary drinks is likely to create an economic disincentive and reduce consumption, subsequently decreasing obesity and the risk of cancer, according to the group.

“It is at the local level where governments can build upon state laws to create policy solutions to best meet the needs of their constituents. Local control is essential for good public health,” wrote Andrew Schepers, a Michigan-based lobbyist for the Cancer Society.

But Republican Rep. Lee Chatfield of Levering, who chairs the panel that passed the House pre-emption bill, said taxing a basic staple such as food “could literally take food out of children’s mouths.”

While other states have policies to prevent the taxation of food, House GOP lawmakers believe Michigan would be the first state to bar local taxes on all foods.

© Copyright 2017 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.

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