Four Cities Approve Sugary-Drink Taxes

Image courtesy of Eric BEAUME

For residents in four U.S. cities, it’s about to get more expensive to buy soda or other sugary drinks after voters okayed new taxes on these beverages. Residents in the California cities of San Francisco, Oakland, and Albany — along with Boulder, CO — voted in favor of these controversial taxes, which are seen as a way to simultaneously combat obesity and increase tax revenue.

The Wall Street Journal reports that voters in San Francisco, Albany, and Oakland approved a measure that would add a one-cent tax per ounce on sugary drinks sold in the cities. For Boulder, the tax will add two-cents per ounce to the cost of drinks including soda, sports and energy drinks, and teas.

In all, the new taxes in California and Colorado, which are levied on distributors, are expected to increase consumers’ costs for the drinks by about 20%, industry analysts estimate.

According to the WSJ, 62% of residents in San Francisco favored the tax, while 61% of Oakland voters approved the measures, and 71% of Albany consumers voted in favor of the tax.

In Boulder, polls show the vote was a bit closer, with 54% of residents favoring the two-cent per ounce tax.

Each of the city soda taxes faces staunch opposition from the beverage industry, including the American Beverage Association, which felt the taxes unfairly targeted the drinks.

Still, the group on Wednesday told the WSJ that it respected the decision of voters.

“Our energy remains squarely focused on reducing the sugar consumed from beverages—engaging with prominent public health and community organizations to change behavior,” said a spokesperson for the American Beverage Association.

The three San Francisco Bay Area cities join their neighbor Berkeley, which was the first U.S. city where voters approved a tax on sugary drinks.

Meanwhile, Philadelphia’s city council recently approved a tax on both sugary and artificially sweetened drinks. The ABA is challenging that case in court.

The beverage group claims the tax is a violation of the Sterling Act, a Pennsylvania state law declaring that cities and local governments “shall not have authority to levy, assess and collect… any tax on a privilege, transaction, subject or occupation, or on personal property, which is now or may hereafter become subject to a State tax.”

The new California and Colorado sugary-drink taxes come a month after the World Health Organization announced it supported taxes on sugary drinks in order to curb obesity, and weeks after Cook County, Illinois — where Chicago is located — unveiled a “sweetened beverage tax” proposal as part of its 2017 budget plan.

That measure, which is expected to be voted on by the Cook County board of commissioners on Thursday, would translate to a one-cent per ounce cost increase. The tax is estimated to bring in about $74 million for the county.

Soda Taxes Approved in Four Cities, Vote Looms in Chicago’s Cook County [The Wall Street Journal]