Connecticut legislation would levy per-ounce tax on sweetened beverages

A version of the following public comment was submitted to the Connecticut State Legislature's Finance, Revenue, and Bonding Committee on March 16, 2026.

House Bill (HB) 5537 would impose a two-cent-per-fluid-ounce tax on sweetened beverages, syrups, and powders sold in Connecticut, with the revenue dedicated exclusively to a universal free school meals account. The evidence from jurisdictions that have implemented similar taxes demonstrates that sugar-sweetened beverage taxes are regressive, generate unreliable revenue ill-suited to funding essential programs, and have not reduced obesity.

Sugar-sweetened beverage taxes are regressive

Proponents of sugar-sweetened beverage taxes frequently argue that such taxes promote public health. But the burden of these taxes falls disproportionately on lower-income households. A systematic review of the literature examining the distributional effects of sugar-sweetened beverage taxes found that every study examining the average household tax burden concluded that such a tax would be regressive.

Lower-income consumers spend a larger share of their household budgets on food and beverage purchases, including sweetened beverages, than their higher-income counterparts. A per-ounce tax represents a meaningfully larger percentage of disposable income for a working-class Connecticut family than it does for a high-income household.

The bill's supporters may argue that this regressive impact is offset by the public benefit of universal free school meals. But residents who continue to purchase sweetened beverages bear the full burden of the tax regardless of whether they have children in public schools or otherwise benefit from the program it funds. For households that do not reduce their consumption in response to the tax, it functions simply as a penalty for a purchasing decision they are unwilling to change. This is a poor policy design ostensibly aimed at improving the welfare of lower-income Connecticut residents. A family of four with average soda consumption would lose almost $400 per year due to the tax. Even if they were to cut their consumption by 25-30 percent, this tax would still represent a meaningful reduction in the discretionary income of the poorest households.

Sugar-sweetened beverage taxes are an unreliable funding mechanism

The bill proposes to fund Connecticut's universal free school meals program entirely from sugar-sweetened beverage tax revenue. This creates a structural problem that Philadelphia, Seattle, and Boulder, Colo., have already experienced: Excise taxes on disfavored products generate inherently unstable revenue that is likely to decline over time.

Philadelphia was one of the first major American cities to adopt a sweetened beverage tax in 2017, directing a portion of the revenue to early childhood education. The program initially showed promise, with revenues helping to fund preschool seats. But by fiscal year 2023, Philadelphia's soda tax revenue had declined by two million dollars and, combined with implementation delays, left thousands fewer children enrolled in preschool than the city had projected.

Seattle's experience follows the same pattern: Soda tax revenue fell from $23 million in 2018 to approximately $20.7 million in recent years, and city officials have acknowledged that falling revenues may require identifying alternative funding streams for programs the tax was intended to support. Boulder, Colo., has recorded a similar decline.

A tax intended to discourage consumption of sweetened beverages will, if it works, generate less revenue over time as consumers purchase fewer taxable products. The more effective the tax is at achieving its stated public health goal, the less money flows into the account designated to fund school meals. Connecticut would be building a long-term commitment to universal free school meals on a revenue source that is structurally designed to shrink.

The Tax Foundation's Brent Hoffer captured the problem: "I would be hesitant to, say, use an excise tax to fund something long-term or something that you will need revenue for for a long time. Tobacco, for instance, has fallen over time."

Even analysts sympathetic to sugar-sweetened beverage taxes have acknowledged this concern. Richard Auxier of the Tax Policy Center has noted that earmarking excise tax revenue for specific programs raises red flags and that officials should consider depositing such revenues into general funds to "achieve reductions in soda [purchases], but not have negative consequences for specific public programs."

If Connecticut is committed to funding universal free school meals, it should identify a stable, broad-based revenue source adequate to that purpose.

Sugar-sweetened beverage taxes do not reduce obesity

The case for taxing sweetened beverages rests largely on the claim that such a tax will improve public health by reducing obesity. This claim has not been borne out by the evidence. A 2018 review by the New Zealand Institute for Economic Research examined 47 studies investigating the effectiveness of sugar taxes and concluded: "We were unable to find evidence that any sugar tax actually implemented anywhere in the world has led to improvements in health."

The results from specific American cities reinforce this finding. In Philadelphia, while the soda tax did reduce purchases of sweetened beverages within the city, cross-border shopping substantially offset that decline. A study examining the Philadelphia tax found "no significant reduction in calorie and sugar intake" as a consequence of the tax.

In Berkeley, Calif., self-reported sugary drink consumption "did not change significantly compared to baseline," and researchers found that caloric intake of untaxed beverages increased as consumers substituted away from taxed products.

Consumers often respond to higher prices by shifting to other products, not by reducing total caloric intake. A study published in the peer-reviewed journal PLoS ONE found that Seattle's soda tax induced a seven percent increase in beer sales relative to Portland, Ore., which has no soda tax.

Excess alcohol consumption carries its own well-documented health risks. A tax designed to improve public health outcomes may, in practice, shift consumption toward a more harmful product.

The United Kingdom introduced a sugar tax in 2018, and obesity rates among both children and adults rose in the years that followed. These outcomes are inconsistent with the theory that taxing sweetened beverages will meaningfully reduce obesity.

The causal chain required for a sweetened beverage tax to reduce obesity is long and empirically fragile: The tax must raise prices sufficiently to change behavior; consumers must not substitute toward other high-calorie alternatives; and the reduction in caloric intake must be large enough and sustained enough to produce meaningful changes in body weight at the population level. The evidence suggests that this chain breaks down at multiple links.

Conclusion

A per-ounce excise tax on sweetened beverages is regressive. Every study examining the distributional impact of such taxes has concluded they impose a disproportionate burden on lower-income households.

Earmarking an inherently declining revenue source for an open-ended commitment to universal free school meals is a recipe for future program shortfalls. If the tax works as intended, revenue falls. If revenue falls, the program will be underfunded, and the committee will face pressure to raise taxes elsewhere or reduce the program's scope. Finally, the available evidence does not support the conclusion that taxing sweetened beverages reduces obesity.