Why focus on soda and other sugary drinks?
What’s covered by the tax?
Who will be taxed?
How much is the tax?
Where does the money go? How does the Panel of Experts work?
How do you know a tax will work?
Who led the campaign?
How do low income communities in Berkeley feel about Measure D?
What’s the political process?
Has a tax like this passed before?
Why focus on soda and other sugary drinks?
Soda and other sugary drinks are the number one source of added sugar in the American diet, and are linked to increased risk of diabetes and other diseases, like heart and liver disease, obesity, and tooth decay. The facts on sugary drink consumption and diabetes are striking:
- A 20 ounce bottle of soda is equivalent to 22 packets of sugar.
- 2 in 3 California teenagers drink at least one soda or other sugary drink each day.
- Drinking even one sugary drink a day significantly increases the risk of Type 2 diabetes.
- Liquid sugar affects the body in a unique way that increases the risk for diabetes more than sugar in food.
- Beverage companies spend hundreds of millions annually marketing directly to youth, bypassing parents, and market more heavily to youth of color.
- 40% of all children will develop Type 2 diabetes in their lifetimes. The prediction is worse for African American and Latino children – it’s 1 in 2.
- 40% of Berkeley’s 9th graders are overweight or obese.
If we want to be serious about tackling the diabetes epidemic, we have to focus on soda and other sugary drinks to have the greatest impact.
What’s covered by the tax?
Measure D focuses on the distribution of sugary soda, energy drinks, juice with added sugar, and syrups that go into sugary drinks at cafes like Starbucks (like Frappuccinos).
100% juice and drinks with milk as the first (primary) ingredient are exempt because of their nutritional value. These drinks are not the cause of the huge increase in sugary drink consumption, especially among children. Measure D is focused on high-sugar, low-nutrition drinks. Coconut water, contrary to the opposition’s insistence, is NOT taxed unless it has added sugar. Diet soda is exempt because it does not have added sugar, the subject of this tax. Alcohol is exempt because it is already taxed.
For more detail, you can read the ordinance language.
Who will be taxed?
This is not a sales tax on consumers. This is not a tax on retailers. This is a tax on distribution companies, the 15-20 companies that contract with beverage makers to distribute their products in Berkeley. Distributors receive a notice on behalf of the city that the tax is due, they fill out the form and remit the tax monthly.
How much is the tax?
The tax rate is a penny per fluid ounce. For syrups, the tax rate is calculated based on the final volume of drinks produced by the syrup.
Where does the money go? How does the Panel of Experts work?
The tax revenue goes into the city’s general fund. Accountability is written into the measure: Measure D creates a panel of experts in child nutrition, healthcare, and education to make recommendations to the City Council about funding programs that improve children’s health across Berkeley. The panel will issue annual public reports detailing the impact of funded programs.
This is a system that has proven to work in Berkeley. The City and citizens of Berkeley have a decades-long, ongoing commitment to child health and nutrition. City Council has a proven track record of respecting the recommendations of their boards and commissions. For example, the Children, Youth, and Recreation Commission makes recommendations to Council about general fund appropriations in the same way as the Panel written into Measure D would, and the City Council has consistently adopted that Commission’s full recommendations.
After Measure D was passed, the panel of experts was formed. As of January 2017, over $2.5 million has been raised by the tax, to go to community health and nutrition efforts, including school garden programs.
How do you know a tax will work? Sugary drink taxes are modeled on other effective taxes, like tobacco taxes. Leading public health researchers and policy experts support a penny-per-ounce tax on the distributors of sugary drinks.
These taxes work in three ways:
- Raise awareness. The public discussion about this proposed tax is already raising awareness about the link between sugary drinks, diabetes and other diseases, and how the beverage industry targets its marketing towards youth and communities of color.
- Raise revenue for community programs that combat the influence of sugary drink marketing. Revenue from the tax could fund community- and school-based programs across Berkeley that give families tools to make healthy choices about what they eat and drink (please see Where does the money go?, above).
- Reduce consumption. After Mexico passed a similar soda tax at the national level, consumption of sugary drinks decreased. It’s a case in point to the growing body of research that predicts a penny per ounce tax will decrease consumption and save lives.
Who led the campaign?
The Berkeley Healthy Child Coalition formed in November 2013. Members of this grassroots coalition included parents, teachers, public health and healthcare professionals, leaders of community organizations, and other concerned residents who had been personally committed to addressing health inequities in Berkeley for up to two decades.
How do low income communities in Berkeley feel about Measure D?
In Berkeley, we believe every resident deserves an equal chance to be healthy, and that our kids should not be targeted by corporate interests like Big Soda. If the soda industry cared about the wellbeing of people with limited incomes, they would stop targeting them with aggressive marketing. This tax is charged to the industry that profits off of drinks that promote diabetes and obesity, diseases that disproportionately affect people with limited incomes and communities of color.
Berkeley groups like the NAACP and Latinos Unidos have been involved in the development of Measure D from the beginning and strongly endorse it. Read the Berkeleyside Op-Ed from Mansour Id-Deen, President of the Berkeley NAACP. Recent research from UCLA shows that Californian communities of color support these taxes even more than their white counterparts. Measure D is also supported by Berkeley equality advocate and former US Labor Secretary Robert Reich. Read Robert Reich’s Op-Ed.
What’s the political process?
In early 2014, members of the Berkeley Healthy Child Coalition gathered petition signatures from Berkeley residents asking City Council to include a tax measure on the November 2014 ballot. On July 1st, City Council unanimously approved the measure. To win, Measure D needed to get 50% of votes. On election night, Berkeley resoundingly approved Measure D with 75% of the vote, becoming the first city in the country to successfully levy a tax on sugary drinks.
Has a tax like this passed before?
No – Berkeley has always been a leader on important issues. We were the first of what we believe will be many US cities to tax sugary drinks.
