California Governor Arnold Schwarzenegger this week called for the layoff of 5,000 state employees and said billions of dollars must be slashed from the budget to deal with the state's $15 billion deficit.
The cavernous shortfall is expected to grow to $21.3 billion if voters reject budget-related measures during a special election next week.
Last week "the governator" said it was time to debate proposals that would treat marijuana like alcohol. Proponents claim taxing marijuana at $50 per ounce would bring more than $1 billion a year to the state.
But state lawmakers aren't the only ones eyeing "sin taxes" to shore up sagging budgets. In Washington this week, the Senate Finance Committee pondered the merits of a "soda tax" to help pay for President Obama's proposed universal health care plan.
Advocates of a so-called "sin tax" on soda blame sugary drinks for a litany of obesity-related health complications. Common soft drinks like Coke and Pepsi contain high-fructose corn syrup, a major market for America's corn producers.
The soda tax was floated this week as a means of paying billions of dollars in future health care costs. Washington lawmakers and the Obama Administration have pledged to overhaul the American health care industry in the coming months although details are still vague.
The federal initiative to slash escalating health care expenses and insure millions of Americans could cost more than $1 Trillion over ten years. According to the Congressional Budget Office, a 3 cent tax on every 12 ounces of sugary drinks could raise $24 billion over four years.
The Executive Director of the Center for Science in the Public Interest said in written testimony this week: "Because soft drinks have been a major contributor to obesity in recent decades, and because obesity is a major cause of diabetes, hypertension, strokes, heart attacks and cancer, Congress should impose a new excise tax on non-diet soft drinks, including both carbonated and noncarbonated beverages."
But the American Beverage Association, or ABA, blasted the soda tax proposal. The ABA, which lobbies on behalf of Coca-Cola, Pepsi, and Kraft Foods, says a tax on soda would hurt lower-income Americans and would not teach a healthy lifestyle.
The ranking member of the Senate Finance Committee, Iowa Republican Charles Grassley, was doubtful a soda tax would ever become law and said the proposal would likely "die" in early negotiations.