By Arielle Gordon-Rowe
In less than two weeks, the Bay Area may have the most cities with the highest concentration of excise taxes on sugar-sweetened beverages (SSBs). On Nov. 8, citizens in Oakland, Albany and San Francisco will head to the polls to decide whether they will follow in the footsteps of Berkeley to implement a soda tax. Voters in Boulder, Colo., will also be deciding on a similar measure.
In fall 2014, Berkeley pioneered the nation’s first soda tax, known as Measure D, which placed a penny-per-ounce tax on distributors of SSBs. Both Oakland and Albany’s measures will, if passed, enact the same tax.
SSBs is a designation applying to sodas, energy drinks, pre-sweetened teas and caloric sweeteners, which have been linked to high rates of chronic illnesses such as Type 2 diabetes, obesity and tooth decay. The designation excludes infant formula, milk products and fruit and vegetable juices. Policymakers in favor of Measure D believed the measure would decrease the consumption of SSBs, which would be a first step in combating associated chronic illness. Some studies seem to back this up (see below).
With less than two weeks until polling day, voters in Oakland and Albany on both sides of the debate are working hard to rally support. In Oakland, Vice Mayor Annie Campbell Washington and councilmembers Desley Brooks and Rebecca Kaplan, among others, have aligned with the grassroots campaign, Oakland vs. Big Soda, to lobby for Measure HH, as Oakland’s soda tax is designated on next month’s ballot.
According to a recent report by Vox News, former New York City Mayor Michael Bloomberg, Laura and John Arnold and The American Heart Association, among others, have already shelled out over $12 million to support the passage of soda taxes on the November ballot. (Bloomberg spent heavily to support the Berkeley soda tax too.) However, funding in support of the soda tax pales in comparison to the $30.8 million the American Beverage Association has spent in opposition.
Oakland: ‘Soda Tax’ vs. ‘Grocery Tax’
According to Oakland vs. Big Soda, the number of chronic illnesses related to the consumption of SSBs is staggering: 37% of Oakland adolescents are overweight or obese, and 40% of all children will develop Type 2 diabetes within their lifetime — with rates at almost 1 in 2 among African-American and Latino populations.
Money raised through the tax will, supporters say, go towards public-health programs to help counter these illnesses. According to Oakland vs. Big Soda, the projected $6-8 million per year generated would go into the city’s general fund, and an advisory board would make recommendations to the city council about how to best allocate the money.
This community advisory board would include at least three residents from areas that are disproportionately impacted by diseases related to the consumption of sugar, two medical and dental professionals, two parents of students in Oakland public schools, and two members with experience in public health.
But members of the “No Oakland Grocery Tax” campaign aren’t sold on the benefits of the tax. “We are opposing Measure HH because it is a regressive grocery tax that will hit the lowest income portion of the population the hardest,” said Joe Arellano, a spokesman for the “No” campaign. According to Arellano, because no mandate exists on which item is taxed, it is at the discretion of each grocer to decide whether to disperse the cost across to other grocery items.
In September, however, an Alameda County Court commissioner refuted this claim, ruling that the measure was, in fact, merely a tax on SSBs. Oakland vs. Big Soda also takes issue with the opposition’s tendency to label Measure HH a “grocery tax.”
“We know from Berkeley that there is no evidence that grocery prices will go up,” said Diane Woloshin, a spokeswoman for Oakland vs. Big Soda. “This is a real opportunity in Oakland for us to turn the tide on an epidemic,” said Woloshin.
Albany: Taking cues from Berkeley
In Albany, the fight to support the soda tax is just as strong. According to Holly Scheider, the campaign manager for Albany vs. Big Soda, Albany’s measure will be the same as Berkeley’s except that it will have a study session to advise the city council instead of a full commission.
“The study session requires participation from the school district and health experts as well as recommendations from existing commissions, such as the Social and Economic Justice Commission,” said Scheider. Albany’s Social and Economic Justice Commission “research[es], analyze[s], discuss[es] and evaluate[s] a broad range of data and opinions on social and environmental issues affecting the welfare of the residents of Albany as inhabitants of both a local and a global community, and make[s] recommendations to the City Council on positions and/or actions to take to address these issues,” according to the City of Albany’s website.
Albany’s measure is projected to raise $220,000 for the city to use on programs that reduce sugary drink consumption and risk of associated health consequences.
Studies show positive impact of tax
The push for the upcoming ballot measures comes in the wake of several recent studies highlighting Berkeley’s success in decreasing soda consumption by passing through the cost of the tax onto consumers.
In a study published August 2016, researchers from UC Berkeley’s School of Public Health witnessed a 21% decrease in consumption of SSBs in low-income neighborhoods in Berkeley. In contrast, in San Francisco, where the tax failed to pass on the 2014 ballot, and in Oakland, the researchers saw a 4% increase in consumption of these same beverages. Only 2% of Berkeley residents polled for the study reported going to neighboring, tax-free cities to shop for SSBs.
Berkeley residents also reported a 63% increase in drinking bottled or tap water while residents of Oakland and San Francisco only reported a 19% increase in water consumption, indicating, the researchers said, that an excise tax on SSBs may influence consumers to opt for healthier alternatives.
“A lot of times when people don’t have access to resources or healthcare, they don’t have access to resources to help them be healthier,” said Jennifer Falbe, the study’s lead author and a postdoctoral fellow at Berkeley. “So if there is ever a policy that can help people and have a positive impact then that’s what we are looking for in public health. And from our consumption data, it looks like a soda tax might be one of those tools.”
The same team of Berkeley researchers conducted a study shortly after the tax’s implementation to investigate whether it was achieving its objective of increasing soda prices. The results of the study were promising: Researchers found that approximately three months after the Berkeley tax, pass-through rates (the percentage of the tax added to SSBs) were 69% for soda, 47% for fruit-flavored beverages and 47% for all SSBs.
Most recently, Falbe’s team has been conducting informant interviews with people affected by or involved in the tax’s implementation, including distributors, retailers, city officials and members of the advisory panel. Out of the 33 retailers interviewed between the summer of 2015 and 2016, none reported making up for the added cost by raising prices on food or non-beverage items. “In other words,” said Falbe, “none of the retailers we interviewed were treating the tax like a grocery tax.”
Two other teams of researchers have examined pass-through rates of the soda tax in Berkeley. Researchers at the American Public Health Association presented findings in Nov. 2015 indicating that the tax had been fully passed on to the retail pricing of SSBs in large and small chain supermarkets, as well as in chain gas stations.
A third study, conducted by Cornell economist John Cawley and co-author David Frisvold, found pass-through rates to be lower, at 43.1%. However, the team found that for every mile of distance between the store and the closest store selling untaxed SSBs, pass-through rates rose by 33.3% for two-liter bottles and 25.8% for 12-packs of 12-ounce cans.
While each of these three research teams found varying pass-through rates, in congruence, the results from the three studies suggest that the tax is achieving its goal in increasing SSB prices.
In addition to dismissing the idea of Measure HH being a tax on groceries, many proponents of the tax condemn “Big Soda” for targeting an at-risk youth population that is already disproportionately prone to developing chronic illness linked to SSB consumption.
“The communities of color and the low-income communities tend to be targeted by advertisements for sugary drinks,” said Falbe. “Here in public health we don’t have the same resources to advertise for healthier behaviors, so I think a tax on SSBs is one potential way to reach all communities, including [those] that are targeted by advertising.”
As time dwindles until the day of the vote, lobbying on both sides of the debate only intensifies. If the taxes do indeed pass, the entire nation may be turning their heads towards the Bay Area as a model.
Arielle Gordon-Rowe, a student at Dartmouth College in Hanover, NH, is a fall intern at Berkeleyside.