Revenues raised from tax are reinvested in community public health organizations
A recent study, co-authored by Dr. Jennifer Falbe, an assistant professor of nutrition and human development at UC Davis, assesses the impact of Measure D, a 2014 sugar-sweetened beverages (SSBs) excise tax in Berkeley, Calif. Within a year of the tax, the consumption of SSBs—drinks like sodas and sugary juices—dropped in lower-income neighborhoods as SSB purchases fell by about 10%. The tax generated more than $9 million in revenue to fund public health programs in the community.
Reducing SSB intake through taxes has been an important tool used for improving public health. Dr. Kristine Madsen, a co-author of this study, an associate professor at the UC Berkeley School of Public Health and the Executive Director of Berkeley Food Institute explains why these taxes are useful.
“[SSBs] are the number one source of added sugars in the American diet,” Madsen said. “Added sugars, and sugar-sweetened beverages specifically, cause obesity and diabetes […] and diabetes is almost twice as high in communities of color as compared to white communities, and is also much higher in low-income communities than wealthy communities.”
The study looks at the implementation of the Berkeley tax as well as its impact on distributors and retailers. There was widespread support for the tax from parents, the Berkeley National Association for the Advancement of Colored People, Latinos Unidos, health professionals and others. The tax was also fairly straightforward—$0.01/oz for all sugar-sweetened beverages—compared to taxes on other goods, which can vary by product. Measure D also used an expert advisory committee to find the best public health use for the tax revenue.
The excise tax of $0.01 per ounce was levied on SSB distributors. In interviews with the distributors and retailers, the researchers found that most SSB distributors raised their prices to the retailers, and most of the retailers raised the price of SSBs to compensate for this change. This finding debunked a claim often pushed by the beverage industry that SSB taxes raise prices of all other food prices and are essentially “grocery taxes.”
Some opponents of SSB taxes point out how the taxes disproportionately harm low-income consumers who can’t afford higher prices. The Berkeley SSB tax is levied on the distributors but because they raise their prices to cover for the tax, consumers may see higher prices at the store, which will mean lower purchase and consumption of SSBs and a greater public health benefit.
“That means that low-income communities should experience the greatest health benefits from lower SSB consumption, which would translate into less money spent on health care costs and less suffering from SSB-related chronic disease like type 2 diabetes and heart disease,” Falbe said via email.
Berkeley is one of a handful of cities across the country implementing a SSB tax, including Seattle and Philadelphia. Like Berkeley, many of these cities have used the tax revenues to invest in public health and equity programs.
“In Berkeley, revenues funded a Head Start obesity prevention program, nonprofits promoting health in the Black and Latinx communities and the public schools’ Gardening and Cooking Program, which ensures all children have access to nutrition education regardless of income,” Falbe said. “Philadelphia’s sweetened beverage tax is funding pre-K for low-income families. Seattle and San Francisco have spent revenues on COVID-19-related food security programs.”
The revenue from the Berkeley tax is facilitated by the Sugar-Sweetened Beverage Product Panel of Experts (SSBPPE) Commission, and the revenue goes to a variety of community programs. One such program, the Multicultural Institute in Berkeley, works with immigrant communities to empower and provide laborers and families important health and education services. Daniela Gonzalez, the Berkeley Programs Director at the Multicultural Institute, explains the importance of focusing on specific communities for public health outreach.
“Marginalized communities, in this context the immigrant and day laborer population, are often unseen and not taken into account when policies are made,” Gonzalez said via email. “These communities sometimes don’t have access to healthier options, whether it’s due to finances, lack of locations of grocery stores in these communities or various other reasons. Our goal is to tackle head-on the health inequities that this population faces every day.”
Prior to COVID-19, staffers and volunteers at the Multicultural Institute would conduct daily street outreach to the day laborers, hold workshops, provide reusable water bottles and encourage water over SSBs. Their outreach efforts look different in a pandemic but they remain committed to helping day laborers through weekly food distribution and sharing cookbooks to prepare healthy meals.
The Berkeley Unified School District (BUSD) Gardening and Cooking Program is another unique example of using SSB tax revenue to invest in public health outcomes, particularly for children and families. Students of all ages at BUSD, from preschool to high school, get to participate in the program. Jezra Thompson, the program supervisor at the Gardening and Cooking Program, shares why these activities are important to the students within the BUSD.
“Often, folks that may not learn best in a traditional classroom may learn really well in these alternative spaces that have more invitation to nature, more invitation to expressing themselves in different ways that might be more culturally relevant to them or more sensitive to how they show up to the class,” Thompson said. “So a lot of students are able to succeed really well and thrive in these spaces.”
For Madsen, and others who work in public health, the question now is if SSB taxes work, then why are there only a handful of cities across the country implementing them?
“If they’re generating revenues which the cities are investing in health, and they don’t harm jobs—which they don’t, they are all based on studies that have come out—then why do we only have seven across the U.S.?” Madsen said. “I think we have to rethink how we do things in the U.S. Do we really want health to be the first priority or do we want profits to be the first priority?”
Written by: Simran Kalkat — firstname.lastname@example.org