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Soda Taxes: Coming Soon To A City Near You?

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Luke Runyon
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KUNC/Harvest Public Media
In Boulder, a proposed soda tax would impose a two cent per fluid ounce tax on any sugar sweetened beverage distrbuted in the city's limits.

Taxes on sugary drinks, the current cause célèbre in public health circles, are enjoying a moment in the spotlight this voting season. At least four cities, including Boulder, Colorado, will vote on whether to enact the tax this election cycle, giving public health advocates hope that they’ll soon be headed to a ballot near you.

The votes this year are high-stakes for proponents and opponents alike. Proponents say taxing sugary drinks like soft drinks, energy drinks, sports drinks, lemonade, sweetened teas and coffees, can reverse high rates of obesity and diabetes. If the ballot measures prove successful it could mark a turning point in public perception of soda taxes, which have already failed dozens of times across the country, only to find recent successes in Berkeley, California, and in Philadelphia.

Public health advocates, and some early studies, say soda taxes are an effective way to reverse the high rates of obesity and diabetes in the U.S. Other studies have drawn clear links between added sugar in sweetened drinks and increased risks for health problems. More than 20 percent of the population in every state in the country is obese, a figure which rose dramatically in the past two decades, but leveled off and even declined in some states in recent years.

Rates of diabetes have climbed to similar levels, doubling in the past 20 years. The CDC projects that one-in-three adults could have diabetes by 2050. Colorado, however, is home to the fewest people with diabetes, and obese adults as of 2015.

While sugary drinks are not the only culprit in making Americans more likely to be obese or diabetic, well-regarded health organizations like the American Heart Association and the World Health Organization say sugary drink makers are a big part of the problem. The WHO went so far as to give sugary drink taxes a stamp of approval.

Big Money, Big Soda

In Boulder, voters are deciding the fate of what would be the highest soda tax in the country. If it passes, a two-cent-per-fluid-ounce excise tax will be collected from any sugar-sweetened beverage distributor that operates in the city. Philadelphia taxes one-and-a-half cents per fluid ounce, and Berkeley’s is one cent per ounce. Residents of San Francisco, Albany, and Oakland, California are all voting on one-cent-per-ounce taxes this cycle.

“The choice is, do we want to pay pennies now upstream, or would we rather pay billions of dollars more downstream. That’s the question,” says Jake Williams, director of Healthier Colorado, a spin-off of the Colorado Health Foundation that advocates for the sugary drink tax.

The public health group won’t disclose its donors, but it has spent more than $630,000 pushing for the tax in Boulder. Williams is convinced the tax will cut consumption and improve health.

“The evidence continues to roll in and I think you can firmly put it in the column of sound public health policy,” he says.

The Boulder ballot measure earmarks the soda tax revenue for public health education. It’s expected to bring in $3.8 million in the first year, but it could end up being a dwindling source of revenue right from the start. Soda consumption has been on a downward slide for years.

That’s why many sugary drink companies, like Coca-Cola and Pepsi, are investing more in bottled water and other low-calorie, low-sugar drinks to diversify their products, with Pepsi going so far to pledge to cut sugar in its beverages over the next decade. Still, they’re not quite ready to give up the market share they already enjoy, and are ready to fight these new proposals tooth and nail to protect their interests.

“Other places around the country that say that this tax has worked, we don’t believe that’s the case,” says Matthew Moseley, a spokesman for the No on 2H campaign in Boulder, an anti-sugar tax group funded exclusively by beverage companies and distributors in the form of the American Beverage Association.

In Boulder, the American Beverage Association has dropped $511,000 to defeat the measure. In other, larger cities it’s spent tens of millions. This debate is about personal freedom, Moseley says. If it starts with soda, what’s next? Pizza and ice cream taxes?

“Where do we stop with that? Where do we stop with the nanny state, telling us what to eat and drink?” he asks.

From College Towns To Cities

Once just a dream of liberals in progressive hot spots like Berkeley and yes, Boulder, soda taxes gain momentum every time they’re passed.

The board president of Cook County, Illinois, just proposed a sugary drink tax for the city of Chicago and the county’s 5.2 million people. And public health advocates hope that’s just the tip of the iceberg. When Philadelphia passed its tax, city spokeswoman Lauren Hitt says it became a lot harder for soda tax critics to shrug off that it’s just “Berkeley being Berkeley.”

“We’ve really turned a page in terms of this being more successful than not,” she says.

Other public health initiatives have sprouted first in small, progressive communities and spread like wildfire. Take smoke-free restaurants and bars for example. It first sprang up in California cities like San Luis Obispo and Beverly Hills in the 1980s and ‘90s before becoming the standard in much of the country’s restaurants and workplaces by the end of the 2000s.

“Philly is pretty far from a liberal enclave,” Hitt says. “We have soda distributors that are based in Philadelphia. We have bottling companies that are based there. All the things that you think might persuade people from getting on board with this tax, have not. So I think it really does have legs.”

That’s after years of defeat for these kinds of proposals. Even in Philadelphia it took three times for it to garner enough support from city council members. That’s why this election means a lot to soda tax proponents. If the four cities pass it, they’ll be ready to shop the idea to other communities, eager to prove that it works.

“We need more cities or probably bigger cities to pass a tax to have a more definitive answer on whether the tax works,” says Chen Zhen, an economics professor at the University of Georgia who studies sugary drink taxes.

He says the idea is still so new, economists don’t have a great handle on what sorts of unintended consequences soda taxes bring. Raising the price of a product does get people to buy and consume less of it. That’s a fundamental law of economics, he says.

What’s much less clear is whether soda taxes achieve all their purported public health goals. He says some evidence shows people just switch to other unhealthy foods high in fat and sodium. Nothing is stopping residents of Boulder or Philadelphia or Berkeley from passing over the city border and bringing cheaper soda back in.

Still, he says the soda tax as a public health tool is hot right now, and spreading fast.

“Twenty years from now a soda tax may not be crazy to many people at all,” Zhen says.

That’s exactly the goal of advocates like Jake Williams of Healthier Colorado. If all goes their way in Boulder, his group could be boosting similar efforts throughout the state.

“After November 8, if there’s a city out there listening and want to give it a try, give us a call,” Williams says.

That means the real fight for soda taxes might just be starting.

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