Philadelphia Becomes First Major U.S. City With a Soda Tax
Screams of joy are a common occurrence when thirsty children lay eyes on a few bottles of Coke. In Philadelphia on Thursday, such happy shouts were heard from rows of schoolkids standing in front of a couple of two liters. But the bottles weren’t there for drinking. Instead, they were rigged to explode in celebration, spraying geysers of sticky-sweet soda into the streets, much to the kids’ delight.
Those bottles of soda will soon be more expensive in Philly—and the city’s kids are being presented as the primary beneficiaries, as much of the revenue from a new soda tax will be used to fund pre-K programs, as well as public parks and recreation services, and to shore up the municipal budget.
Although it has been considered a done deal since last week, with a 13–4 vote on Thursday the Philadelphia City Council formally passed a tax on soda and other sugar-sweetened beverages. The decision makes Philadelphia the second city in the United States—and the largest—to adopt such a measure. The tax, which is included in the city’s budget, will charge distributing companies 1.5 cents for each ounce of sugar-sweetened beverages sold in the city. When the tax is implemented, it’s almost certain that the additional cost will be passed along to consumers.
The tax is notable for simply passing—something many soda tax proposals historically have not done. But politicians and public health advocates and researchers who support similar taxes are looking at Philadelphia as something bigger than a single-city victory. Winning there could be a sign that 2016 will become the year of the soda tax.
“I think the frame shift that we’ve been hearing in Philadelphia is important because it’s not just any tax that they’re going to raise revenue on,” Michael Long, an obesity researcher at the Milken Institute School of Public Health at George Washington University, said in an interview. An increase in property taxes, for example, was proposed as another means of generating revenue but did not get enough support to make the final budget. “When you combine that need [for revenue] with the other benefits you get from taxing sugar-sweetened beverages, that’s when you get the support.” In Philly, where strained coffers have resulted in dozens of schools being shuttered, education funds are needed, which may partly explain why the measure passed when a soda tax initiative focused solely on public health failed five years ago.
The soda tax has been seen for years solely in terms of public health policy—or, as the case may be, an expansion of the nanny state—but Philadelphia’s Mayor Jim Kenney has perhaps turned it into another tool for tax-and-spend Democrats. As spokesperson Lauren Hitt told The New York Times, “It was always about the revenue.”
Even when framed in terms of public health, the taxes bring in money. In Berkeley, California, a penny-per-ounce tax on sugar-sweetened beverages raised $1.2 million in the eight months it was in effect last year—funds that will go toward paying for nutrition programs in public schools, as well as grants that will be paid out to local organizations working on reducing soda consumption and other public health measures. A ballot measure modeled after the Berkeley tax that will be considered in Oakland, Calfornia, in November would bring in between $6 million and $10 million annually, according to estimates from the Oakland City Council. With Philadelphia’s higher tax rate and larger population—1.5 million people live in the city, compared with 117,000 in Berkeley and 406,000 in Oakland—the new tax will bring in an estimated $91 million over the next year.
Soda geysers for youngsters part of the hoopla today as City Council votes on Soda Tax that will in part funds Pre-K pic.twitter.com/LUnxKzIkdx— John Rawlins (@JRawlins6abc) June 16, 2016
Politicians and organizers in Oakland, as well as San Francisco; Boulder, Colorado; and Albany, California, which are all expected to vote on soda tax initiatives in November, are emboldened by the city’s success and hoping to build on what they see as growing momentum behind such policies.
“I feel like we’re part of a movement,” said Annie Campbell Washington, a member of the Oakland City Council and a cosponsor of its soda tax ballot initiative. “I think we’re all watching to see what happens in Philadelphia, and each one of these wins is very important.” J. Dominique Olvera, the campaign manager for Healthy Boulder Kids, which is collecting signatures to get an initiative on the Colorado city’s November ballot, said of the soda tax passage, “It shows that there’s momentum around the nation that people want to live a healthy lifestyle.”
Even with taxes on sugar-sweetened beverages seeming to gain some political traction in the U.S. after years of being little more than a glimmer in the eye of public health experts, Philadelphia may not be a perfect bellwether.
“I will tell you, if other cities are looking at this, they will not be able to replicate what happened in Philadelphia,” said Larry Ceisler, a spokesperson for Philadelphians Against the Grocery Tax Coalition, which is funded by the soda industry. “There were a lot of local politics playing out here,” with a new mayor coming into office with political capital to spare, among other issues. “I don’t think it can be replicated. Maybe parts of it, certainly, but not all of it.”
In places where soda tax initiatives have to go before voters, Ceisler said those referendums would fail. According to the American Beverage Association, an industry group that strongly opposes taxing its products, soda taxes have failed 43 of the 44 times they have been proposed since 2008—including two attempts to enact such a tax in Philadelphia. Nationally, a majority of Americans do not support taxes on sugary products such as soda and candy, but the polling numbers from firms like Rasmussen and the Pew Research Center are a few years old.
One voter-backed measure and one passed by a city council would, objectively, seem to be small cracks in that opposition—but other signs indicate that on the soda tax question, tides are shifting. In California, for example, a February Field Poll found that 68 percent of voters supported taxing soda, with nearly half of respondents strongly approving of such a policy. Two years ago, 55 percent of voters in San Francisco said yes to a ballot measure that earmarked soda tax revenue for public health programs, falling short of the two-thirds majority required to pass. The Golden State has often served as a proving ground for progressive policy measures, and come next year, the San Francisco Bay may be nearly ringed with cities that tax soda.
While it was originally proposed as a three-cent-per-ounce tax—far and away the largest such tax considered in the U.S.—the negotiated 1.5-cent-per-ounce tax in Philadelphia is, from a public health perspective, on par with Berkeley’s penny-per-ounce tax. Last week, a negotiated deal reached by city council members cut the tax in half and expanded it to include diet sodas as well.
According to modeling GWU’s Long and his colleague Katie Giles did for the Childhood Obesity Intervention Cost Effectiveness Study, a 10 percent price increase would decrease consumption by about 8 percent under the final version of the Philadelphia tax, while it would hit 12 percent, according to the model, if diet beverages were not taxed. When you have a tax that applies only to sugar-sweetened beverages, and diet drinks do not have an increase in price, the increased costs can push people to drink the artificially sweetened drinks—which counts as a public health win in Long’s view, and one that will not happen in Philadelphia.
While some studies have linked artificial sweeteners with weight gain, Long said, “I don’t think the evidence is at all clear that diet beverages are at all associated with weight gain...it’s very clear that drinking sugar is bad for you, and it’s less clear that diet beverages are bad.” The Philly tax also does not include juices with added sugar as long as they are 50 percent fruit.
Even so, the study’s modeling shows the tax improving public health by preventing 834 cases of diabetes “within a few years of implementation,” avoiding 12,300 cases of obesity annually, and saving an estimated $65 million in health care costs over a decade.
The beverage industry, however, does not buy the public health argument for adopting soda taxes. “They have no impact on public health,” Lauren Kane, senior director of communications for the American Beverage Association, said in an interview. “We’ve seen that in Mexico, where the reduction in calories has not been enough to even make a difference on a bathroom scale.” The national peso-per-liter tax implemented by the Mexican government in 2014 led to a 6 percent decline in soda sales in its first year, with sales dropping by as much as 12 percent in some months. Mexican bottling companies reported a 7 percent increase in sales last year, but researchers argue that consumption dropped by about 8 percent in 2015 compared with pretax levels.
In Oakland, Campbell Washington—who represents a district that includes working-class, diverse East Oakland neighborhoods and tony, white communities in the Oakland Hills—wants to stick to the soda tax playbook that proved successful in Mexico and neighboring Berkeley. “I really do believe that it’s important to keep that tie between that tax and our public health,” she said. In her city, she said, “one out of every two black and Latino children are expected to develop diabetes in their lifetime. I think that’s a public health crisis.” She wants to make it clear that the soda tax is intended to make the industry “pay for the damage that they’re doing to our communities.”
As is the case in Berkeley and Philadelphia, the Oakland tax would be levied against distributors, and as Campbell Washington said, “they can choose to pass the tax along or not.” The opposition campaign has begun, and Campbell Washington said fliers are appearing across Oakland calling the measure a “grocery tax,” which is the same messaging antitax groups used in Philly.
When asked about the distributor tax being passed on to consumers, William Dermody, vice president of policy at the American Beverage Association, wrote in an email, “Taxes get added to the price of any product, that is the way all businesses work. Consumers know that,” and politicians—such as Campbell Washington and Philadelphia’s Mayor Kenney—who suggest otherwise are “trying to pretend” they do not know that.
With unanimous support from the Oakland City Council and endorsements from the faith community, health organizations, and dentist and pediatric groups, Campbell Washington said she feels good about the prospects of passing the tax. “Pretty nearly every elected official in this area has endorsed the measure already,” she said.
Soda taxes may be seen as regressive—as both industry groups and Vermont Sen. Bernie Sanders have pointed out—but as Campbell Washington said, “The diseases associated with sugar-sweetened beverages are regressive too.”
In Boulder, soda tax organizers have until June 28 to collect the required number of signatures to put the measure on the ballot. Roughly 5,800 signatures are needed, a goal Olvera of Healthy Kids Boulder expects to meet. In San Francisco, Sup. Malia Cohen’s office collected 10,000 signatures in support of the city voting on a soda tax this fall. Due to what her office called a “technical error,” those signatures were not filed, and Cohen is now trying to get three of 10 fellow supervisors to sign on to supporting the initiative, which would qualify it for the ballot. They have until June 21, and while no one has signed yet, Cohen’s office said it has support and expects to make the deadline.
Even if these measures make it on their respective ballots, and voters back them—and the same thing happens in other cities and towns all across the country—Long said it’s not going to be enough.
“Even if soda taxes do get adopted across the country, they aren’t likely to be a silver bullet for the growing epidemics of obesity and diet-related disease,” he said. Soda taxes are one of the most cost-effective ways to improve public health, he said, but if they become mainstream, “the conversation is going to shift to saying, ‘We need to do more.’ ” In June, a study published in the Journal of the American Medical Association reported that 40 percent of American women were obese in 2014—a sharp increase. Soda and other sugar-sweetened beverages may be part of the problem—and as a leading source of sugar in Americans’ diets, a large one at that—but it is not the problem.
“We haven’t turned this around yet, and this is not going to be the one thing that does it,” Long said. “Just the direct effects [of soda taxes] aren’t going to be enough.”
This article originally appeared on TakePart.com. Reprinted with permission.