WV medical schools now funded by insurance premiums instead of soda tax

CHARLESTON, W.Va. (WOWK) – Many may not know it, but every time a bottle of soda has been purchased in West Virginia since 1951, there’s been a small tax on the bottle used to fund medical schools across the state.

However, that tax is no longer in effect starting this month because of a 2022 Legislative decision to remove the tax, outlined in “Article 19. soft drinks tax §11-19-2 .”

Senator Eric Tarr (R-Putnam) said that removing the tax was necessary in terms of propelling the Mountain State forward.

“In 2022, and years before that, there had been discussion of getting rid of the pop tax because West Virginia was the only state left that had a sugary drink tax left in the country. The reason it was placed on there is it funded our medical schools,” Sen. Tarr said.

Tarr said the tax, though only 1 cent per bottle and 80 cents on each gallon of soft drink syrup, created issues in terms of doing business with soda and soft drink companies.

Tarr continued, “There’s always been talk of eliminating that tax because the soda industry and the sugary drink industry really resented West Virginia for it. It was difficult to attract those companies to do business in West Virginia because they took that as a slight against them.”

In 2023, the Soft Drink tax generated $13.7 million that was split between three medical schools: West Virginia University, Marshall University, and West Virginia’s School of Osteopathic Medicine. The soft drink tax was created in 1951 specifically to support these three schools.

“The resistance came from the universities because that was an earmarked revenue stream that came to them every year, about $14 million. So, the negotiation came down to ‘can we earmark our revenue stream?’ So, we started looking at revenue streams that were associated around health care and where it was not earmarked for a piece. They wanted to make sure they had an earmark,” Sen. Tarr said.

Now, Sen. Tarr said these schools will instead be supported through dollars from insurance premium funds.

“So the insurance premium tax was an opportunity. There was nothing. It just came into the general revenue fund, and then we would appropriate it as we saw fit,” he said. “…Now that’s the case, and we no longer have an impediment to attracting that industry to West Virginia.”

Stores like Bigley Piggly Wiggly say the tax break will not make a huge difference in terms of what customers pay, unless of course customers are high consumers of soda.

“Well, I don’t really think it’s going to have a whole lot of an effect because the tax really was very minute as far as what the consumer is going to see. You’re talking about, I believe, like a penny a can, or a penny a bottle for anything under 17 oz,” owner Jeff Joseph said. “So, it’s really a small tax, but in the big picture, as far as every can and bottle sold to the state, it could have an impact on the state. As far as the individual consumer, I don’t think they’re really going to see much of a difference.”

Joseph continued, “Soft drinks is a big business, It’s a big mover, and it’s a very competitive item. So the price is already as low as you can possibly cut it to attract people to shop with you.”

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