Legislators on the Finance, Revenue and Bonding Committee heard public testimony regarding a tax on sodas and other sweetened beverages to fund universal free school lunches for all students, a plan supported by several schools and health associations, but opposed by the Connecticut business, restaurant, grocery, and beverage industries.

House Bill 7273 would institute a 2 cent per ounce tax on sweetened beverages, which include not only soda but also diet soda and powdered drinks but would not extend to milk-based products or 100 percent fruit or vegetable juices. Currently, free school meals are provided to students who meet certain income thresholds, but under this proposal meals would be available free of charge to all students regardless of income levels.

Although there is not yet a revenue analysis, Gov. Ned Lamont’s previous proposal in 2019 of a 1.5 cent tax per ounce on sweetened beverages was estimated to bring in an additional $160 million per year, which would likely put the estimated revenue of this latest proposal around $200 million per year, while universal school meals are estimated cost between $90 and  $110 million. 

Both Gov. Dannel Malloy in 2017 and Lamont in 2019 proposed the sweetened beverage tax to plug holes in the state but both proposals were shot down in the General Assembly. Although Connecticut’s budget has been much more stable since the Malloy years, lawmakers are still looking at a tight budget and considering easing the state’s fiscal guardrails to account for increased spending and potential cuts by the federal government.

During COVID, Connecticut allocated $60 million of American Rescue Plan funds toward universal school lunch from February 2023 through June of that school year. The proposed tax comes as school officials worry about potential federal funding cuts from Washington D.C. that could affect free meal programs for students from low-income families.

The proposed sweetened beverage tax, which would be levied against the distributor but passed down to the consumer, would essentially drive up the cost of sodas and other drinks by half or more, according to testimony by Mike DeFeo of Coca-Cola Beverage Northeast. DeFeo argued the tax would fall heaviest on lower-income families, drive consumers over the border to other states, and potentially affect jobs.

“At 2 cents per ounce, a 2-liter soda that costs $1.99 could carry a tax of $1.36, meaning that the total price would go up over 68% to $3.35,” DeFeo wrote in testimony. “In a time where family budgets are already stretched to the limit, this would only exacerbate the issue as residents are now spending more for the same goods as before.” 

Tim Adams, owner of J. Timothy’s, a popular tavern in Plainville, argued the tax would force him to raise prices, and calling the measure excessive, unnecessary, and harmful. Scott Dolch, president of the CT Restaurant Association, testified at the public hearing the tax would simply drive up the costs for restaurants and their customers, ultimately harming the industry.

Wayne Pesce, head of the CT Food Association, which represents grocery stores, argued the sweetened beverage tax would just add another tax burden onto families who will likely be feeling the effects of President Donald Trump’s tariffs, on top of inflationary pressure from the past several years.

“This policy taxes millions of consumers at the register and punishes businesses at the back door. At a time when the cost of living and affordability are at the top of people’s minds, this proposal will drive up grocery bills across the board,” Pesce wrote in testimony. “Instead of finding ways to ease the burden on Connecticut residents, this proposal doubles down, layering yet another cost onto one of the most highly taxed categories in the grocery aisle.”

A number of opponents also pointed out that Connecticut also increased the can and bottle deposit from 5 cents to 10 cents starting in 2024, requiring more money out of pocket for bottles and cans at purchase to increase recycling. The results, thus far, have been mixed.

Proponents, however, argued the tax would simultaneously reduce the consumption of unhealthy sugary drinks while also ensuring Connecticut students have access to healthy meals, regardless of their ability to pay, thus lessening the cost on lower-income families.

“In a high cost of living state such as ours, so many families cannot afford to pay for school meals. We continue to feed students that are unable to pay while also trying to be a collection agency, which negatively affects other areas of our budget as well as the district ’s budget,” wrote Jeff Sidewater, a food services program coordinator and consultant for the Capital Region Education Council (CREC). 

According to the Hartford Courant, school lunch debt owed by families is approaching $1 million so far this year. 

“We have gone backwards this year by returning to the free/reduced/paid model based on household income and we need you to support free meals for all students,” Sidewater wrote. “The sugary beverage tax with funding going to school meals for all will help to balance our budget, enhance the services we provide, and provide economic benefits to the community we serve.”

Jim Williams of the CT Heart Association, wrote that 72 percent of Connecticut residents consume one or more sugary drinks per day, the fifth highest rate in the country, and that the tax would be a “win-win” through lowering consumption to improve health outcomes and financing school meals.

“Sustained funding for this bill leverages a sugar sweetened beverage tax, which will have the dual effect of curbing consumption of the number one source of added sugars in our diets and paying for a much-needed program for our children,” Williams wrote, while disputing the idea that the tax would affect jobs or lower-income families negatively. “This bill is indeed a rare ‘win-win’ for CT.” 

If passed, Connecticut would be the first state in the nation to implement a sweetened beverage tax. Thus far, it has only been implemented by cities such as Philadelphia, San Francisco, and Seattle.

“Free meals for all students reduce stigma, ensure consistent nutrition, and help students connect to school,” said Kathleen Callahan, director of policy and engagement for the CT Cradle to Career Coalition. “We recognize that excise taxes can be regressive, but this bill is intentionally structured to reinvest in the communities most affected, turning a regressive tool into a progressive outcome.” 

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