Success Stories

Taxing Sugary Drinks: What are the Impacts?

Sugary Drinks
Pennsylvania

*These campaigns were not funded by the Robert Wood Johnson Foundation.

 

The harmful health effects of sugary drinks are clear:  Having even one per day significantly increases a person’s risk of developing heart disease, diabetes, obesity and tooth decay. In the United States, 40,000 deaths every year are attributed to heart problems caused specifically by consuming too many sugary drinks. The potential harms for children, who consume an average of more than 30 gallons of sugary drinks a year—including sports drinks, fruit-flavored drinks and soda—are particularly concerning.

A growing number of U.S. cities have responded to these concerns, in part, by enacting sugary drink taxes. The impacts to date are encouraging.

Seven U.S. cities— the California cities of Berkeley, San Francisco, Oakland and Albany; Philadelphia; Seattle; and Boulder, Colo.—along with the Navajo Nation, have sugary drink taxes on the books. Evidence shows that these taxes can reduce consumption of sugary drinks and are raising critical revenue that fund programs and policies to improve health and education for children and families, particularly those in low-income neighborhoods and communities of color.

Here’s a look at the early impact of sugary drink taxes.

 

Berkeley

Berkeley, Calif., is the vanguard of the nation’s sugary drink tax movement. Berkeley’s tax passed via ballot measure in 2014 with 76% of voters approving, making Berkeley the first city in the U.S. to implement a tax on sugary drinks. The 1-cent-per-ounce tax brings in $12 million a year, the bulk of which supports community and school programs that teach kids about healthy eating, cooking and gardening.

Berkeley’s tax has been particularly effective at reducing the impact of sugary drinks: A recent study found that consumption of sugary drinks plummeted 52% among low-income residents in the three years after the tax took effect.  Meanwhile, water consumption increased by 29%.

In addition, an analysis of City of Berkeley economic data found that, a year and a half after the tax passed, food-sector sales tax revenue rose by 15%, and 469 new food-sector jobs were created—an increase of 7.2%.

“These taxes work,” says Eric Batch, vice president of field advocacy for the American Heart Association’s Western States Affiliate. “Berkeley was the first to show it.”

Kad Smith, a lifelong Bay Area resident who worked to pass the Berkeley ordinance, says the idea was to create a sustainable funding stream for local health education and nutrition programs while reducing the amount of sugary drinks that residents—especially kids—consume.

Working on the Berkeley campaign was educational for him personally as well.  As a kid, he’d had a lot of dental work, “directly correlated to how much soda I consumed.”

The sugary drink tax campaign made him realize just how unhealthy those drinks are.  “I started to think about my own health patterns and what they had done to me, just from a childhood of consuming soda as if it was water,” Smith says.

More broadly, he believes that public awareness of the harmful effects of sugary drinks has increased, both in Berkeley and the other Bay Area municipalities that have passed similar taxes.

“The Berkeley tax really allowed folks to set a precedent and change the norm,” Smith says.

 

Philadelphia

In 2016, Philadelphia became the second, and largest, U.S. city to pass an excise tax on sweetened drinks. Revenue from the 1.5-cents-per-ounce tax funds pre-kindergarten classes, new community schools and improvements to parks, recreation centers and libraries. Through December 2018, the tax has raised approximately $150 million.

Research shows that sales of sugary drinks in Philadelphia have fallen since the tax went into effect. A study published in the National Bureau of Economic Research found that sugar intake fell 22% among children who drank roughly one 20-ounce bottle of soda a day before the tax.

Nearly three years after its enactment, a growing body of evidence shows that the tax has improved the city’s education and recreational offerings while reducing sugary drink consumption among target populations. About 4,000 kids have graduated from or are enrolled in pre-k slots funded by the tax.

Linda Mackey, whose twin grandsons attend pre-K at West Philadelphia’s TYL II Preschool, has seen firsthand the benefits of high-quality pre-k. At age 5, her grandsons are reading and doing basic math, and have learned good social skills.

“This tax benefits inner-city children who aren’t always getting the education they need,” says Mackey, a lifelong Philadelphian. “I’m all for it.”

Mackey recently testified before the City Council, explaining the benefits of the tax revenue being used to fund preschool programs. “I love that school,” she says. “I’d give them a hundred stars.”

 

San Francisco

San Francisco’s sugary drink tax passed via ballot measure in 2016 with 62% of the vote. Since then, millions of dollars in sugary drink tax revenue have been invested in community and school programs that increase access to healthy foods, create recreational opportunities for young people, provide health and nutrition education and improve oral health for kids.  In 2018, the 1-cent-per-ounce tax raised an estimated $16 million.

“I know 100 percent that this program has improved people’s lives tremendously,” says Mary Rush, a food justice leader for San Francisco’s Tenderloin Neighborhood Development Corporation. Rush is referring to the city’s Healthy Food Retail SF program, which helps neighborhood corner stores carry healthier options on their shelves. In neighborhoods like the Tenderloin, where a high proportion of residents are low-income and have chronic health conditions, it’s especially important to have healthy, affordable food options within easy walking distance.

The Healthy Food Retail program is five years old, but a boost from the sugary drink tax increased its annual budget from $60,000 to $210,000 for two years.

Saed Zaki Nijem, whose Salem Market in the Tenderloin recently underwent a healthy makeover, says his store is better positioned to meet residents’ needs now that he stocks a wider selection of fresh produce, whole-grain breads, dairy products and organics.  “People love having the new choices,” he says.

The sugary drink tax also supports the Peace Parks program, a collaboration between the city’s Parks and Recreation Department and the San Francisco Police Department that creates safe social and recreational opportunities for young people in crime-ridden neighborhoods.

Four years ago, the Herz Clubhouse and Playground in Visitación Valley was the scene of a fatal shooting witnessed by about 60 children.  Now, because of Peace Parks, dozens of teens participate in activities like basketball, drumming, dance and hair-braiding during evening hours Thursday through Saturday.

“For the teenage kids, it really keeps them out of trouble,” says Denise Armstrong, whose two teenage grandsons participate in the Peace Parks at Herz.  “They have a wonderful time, and they have police protection to make sure they’re safe.”

 

Seattle

Seattle’s 1.75-cents-per-ounce tax won approval from the city council in a 7-1 vote and took effect in 2018.  During its first year, the tax raised nearly $23 million—significantly more than the projected $15 million—to expand access to healthy foods, improve education outcomes, and reduce health disparities.

“This tax is generating revenues that are being used in programs that ultimately will make people healthier and in ways that address health equity and racial justice,” says Jim Krieger, founding executive director of Healthy Food America, an advocacy group based in Seattle.

Last December, Seattle resident Patricia Hopson received three months’ worth of Fresh Bucks produce vouchers—funded by revenue from the tax—for use at her neighborhood Safeway supermarket.

Hopson, who is frequently visited by her nine grandchildren with “appetites,” was already a healthy food fan. She loves to buy fresh and organic produce.  And with the Fresh Bucks vouchers, she upped her game.

“I bought things I hadn’t purchased in a while—things like fresh artichokes, Swiss chard, and asparagus,” she says.

Hopson is looking forward to re-joining the program. As she says, “I will never stop buying fresh fruits and vegetables.”

She adds that she doesn’t drink soda—and she doesn’t keep it around for her grandkids.  “They drink water,” she says.

 

Boulder

In 2016, Boulder residents approved the nation’s highest sugary drink tax at 2 cents an ounce via a ballot measure that secured 54 percent of the vote.  It won a second, resounding approval in 2018, when 65 percent of residents voted to allow the city to keep higher-than-anticipated revenues from the tax. Those revenues—approximately $7.5 million as of December 2018—fund more than two dozen community-based programs for improving health in low-income communities and communities of color.

“When people think of Boulder, they think of an affluent place with great health outcomes,” says Rachel Arndt, Built Environment and HEAL Coordinator for Boulder County Public Health.  “But those great health outcomes aren’t evenly distributed.”

One program funded by the tax revenue aims to improve healthy eating, reduce consumption of sugary drinks, and increase physical activity among Latino families. The 90-day Health Challenge, as it’s called, offers fitness coaching, cooking classes, and other support to help 50 families meet their goals for healthy eating and weight loss.

Jorge de Santiago, executive director of El Centro Amistad, which runs the program, says interest exceeded expectations. “We have to educate our community, and once they have the information, families will make changes,” he says.  “They want a healthy life for their kids.”

 

Looking Ahead

The successes in these cities have shown how taxes on sugary drinks can reduce consumption and create sustainable revenue streams for important local health and social programs. They also get an important message across.

“All of the sugary drinks movements raise awareness,” says John Maa, a surgeon and member of the American Heart Association’s Bay Area Board of Directors. “There is greater awareness of the health hazards of consuming sugary drinks.”

This increased awareness will be key to changing norms about what kids should drink every day—and to replacing soda and other sugary drinks with water and milk as the beverages of choice. Over time, this shift should lead to better health outcomes.

Meanwhile, leaders in other cities and states who prioritize the health of their residents are eying sugary drinks taxes; in California, legislators and health advocates plan to advance a statewide sugary drink tax proposal in 2020.

“There is a whole range of sugary drink proposals and policy changes that are moving forward,” says Maa.  “I’m optimistic.”

 

Join the Sugar Drinks Action Team