More and More States are Moving to Tax Soda
They're using the money to fund childhood education programs.
Soda taxes are gaining traction across the country—but these efforts are facing challenges from business owners.
Take Connecticut, the latest state to propose adopting a tax on sugary drinks to help fund welfare programs. State residents would pay a penny per ounce on any beverage that adds “caloric sweeteners.” The revenue would then go fund educational programs for children, like Care 4 Kids, which provides child care for low income families.
The advocacy group Connecticut Voices for Children estimates that a tax on sugary beverages would bring in about $85 million a year—currently the state only needs $33 million to fund Care 4 Kids every year.
Rep. Juan Candelaria, of New Haven, hopes that if the tax ends up being implemented, it will improve the oveall health of the state.
“It helps change that behavior,” Candelaria told CT News. “And I think we’ll have a healthier population in our state.”
At the same time, he acknowledged that taxes like these target low-income families, who are more likely to drink soda because it’s cheaper than water.
The competing forces in Connecticut reflect a battle raging in several states across the country.
Philadelphia’s tax on sweet drinks, which passed in the city council last summer, is currently under review. The American Beverage Association and the Pennsylvania Food Merchants Association are now hoping to get the tax invalidated on the grounds that it conflicts with the state’s sales tax.
Right now, the Philly tax also funds early childhood programs, allowing the city to add “2,000 pre-K spots for low-income families in the city,” according to a report from NPR. But the city is holding off on adding 1,000 additional seats for children in need as the tax is reviewed. The mayor’s office also said in a statement that the tax will provide money for “much needed investments in pre-K and community schools, as well as in Philadelphia parks, rec centers and libraries."
At the same time, some small business owners say that their sales are down as much as 15 percent.
Though at present, the revenue from soda taxes is helpful in funding educational programs, experts are still conflicted about whether they are making people healthier.
A 2011 report from the Tax Foundation found that soda taxes won’t necessarily “decrease caloric intake.” The Foundation's report states, "One recent study finds that when adolescents switch away from soda due to price increases, the drop in calories is offset by an increase in calories consumed in other food and drink,” they wrote.
However, in the referenced study, published by Emory university in 2009, looked at individuals that replaced soda with "high calorie beverages, such as fruit juice...or whole milk." While it's true fruit juice and whole milk may have a higher calorie count than sodas, both replacement drinks contain other vitamins and nutrients that are completly absent from soda, which, even the study's author acknowledged "there may be broader health benefits that are not yet understood."
And while studies like the Emory one show a mixed picture on soda taxes, in 2015 the World Health Organization released a report urging many nations to tax unhealthy beverages.
The American Heart Association and the American Medical Association also both support the tax in Philadelphia. In a statement to the court reviewing the tax, they wrote, "The evidence is clear that sugary drinks are a major contributor to the increasing rates of type 2 diabetes and heart disease…Philadelphia's tax on sugary drinks has the potential to change lives for the better—preventing chronic disease and extending quality of life by simply incentivizing families to choose health.”
As of 2016, only eight cities in five states have implemented soda taxes. The first one went into effect in Berekely, California in 2015; the next year UC Berkely released a study which found that there was a "21 percent drop in the drinking of soda and other sugary beverages in Berkeley’s low-income neighborhoods." The American Beverage Association claims it’s defeated 45 other attempts to pass soda taxes since 2008.
In May, New Mexico will be the latest state to vote on whether or not to implement a similar tax, which would add two cents to every ounce of the included beverages purchased.
“We’ve already seen first-hand the benefits of early childhood education and pre-K, and are so excited to be able to support this initiative," Danila Crespin-Zidovsky, of the organzation Pre-K for Santa Fe, told KOB4.
Critics call it a “regressive tax,” that, like in Connecticut, would hit poor people the hardest.
Regardless of how the vote turns out, the heated debate about soda taxes probably means that this is just the beginning of the backlash against soda.