Richmond mulls pathbreaking soda tax

February 2, 2012

By Mary Flynn, California Health Report

The city of Richmond is attempting to pass a proposal that’s failed in big cities including New York City and Philadelphia – and if they succeed, their plan could encourage statewide changes in California.

The City Council is considering two ballot measures intended to combat child obesity. One would impose a tax on sugar-sweetened beverages, and the other would earmark the soda-generated tax revenue to fund public health initiatives for the community.

“There’s a tremendous amount of momentum moving this forward,” said Richmond City Councilman Jeff Ritterman, “There’s a definite nexus between how many of these foods a child takes in and their likelihood of being obese.“

The correlation between sugar sweetened beverages and the national waistline has been a topic of much discussion in public health circles and is now popping up in legislative discussions.

Richmond’s measure proposes a 1-cent per ounce charge on sugar-sweetened beverages sold in the city.

Last February, Sacramento City Councilman member Kevin McCarty called for a city soda tax, but nothing more was done. Richmond is the first to have a city council ask city staff to draft an initiative for them to consider putting on the ballot.

The initiative comes on the heels of a disturbing report about obesity in Richmond. Contra Costa Health Services determined that a whopping 58% of Richmond adults were obese or overweight, racking up over $400 million in health care costs for the county each year.

The study also determined that 24% of the children in Richmond were obese (not just overweight), and if current health habits persist, that translates into a 42% obesity rate when these kids reach adulthood.

Public health officials determined that sugar-sweetened beverages are a major contributor to the obesity epidemic in America. Sugar-sweetened beverages are beverages with caloric sweeteners added to them – including soda, fruit juices, or energy drinks, but not diet drinks.

“I think we’re at the beginning of an important public conversation about the obesity epidemic,” said Harold Goldstein, Executive Director of the California Center for Public Health and Advocacy. “I don’t think most people know that a 20 ounce soda has 16 teaspoons of sugar, or that we consume 45 gallons of soda a year – that’s the equivalent of 42 pounds of sugar every year.”

“That’s how much my son weighed when he was five years old,” Goldstein said. “We’re all on average drinking a 5-year-old worth of sugar a year.”

An association of beverage producers says there is no clear connection between soda taxes and and lower rates of obesity.

“It’s not an effective means of addressing health and obesity,” said Karen Hanretty, a spokesperson for the American Beverage Association. She referred to data compiled by the Center for Disease Control that determined that sugar-sweetened beverages made up about 5.5% of the average American’s caloric intake. “A tax to address 5.5% of the average calories certainly isn’t going to make a significant impact,” she said.

She also referred to another study from George Mason University, which set out to determine whether a higher tax on soda would have an impact. Hanretty said the study determined that even by applying a 20% tax to these beverages, the lowest amount to create any effect, would reduce a person’s body mass by a trivial amount. “A soda tax simply has not been proved to have any sort of effect on public health,” she said.

Hanretty also pointed to West Virginia and Arkansas, two states who place an excise tax (applied to specific goods, not directly to the consumer) on sodas, but also consistently have high occurrences of obesity. “They rank upon the top states for obesity rates in the country, so there is no direct link between taxing and lowering obesity.”

Advocates of the “soda tax” point to the success of tobacco taxes in reducing smoking and other forms of tobacco consumption.

“[Tobacco] is a really good analogy with this,” Ritterman said. “Each product benefits a very small number of transnational corporations, neither product has any nutritional or health value, both products cause significant health problems and in both cases the cost of those health problems has socialized.”

“It’s not just borne by the those who use it,” Ritterman added, “but it’s society as a whole that pays the price.”

Although the idea that the tobacco tax alone that reduced consumption of tobacco products is debatable — research says a combination of factors were at play, including smoke-free establishments and dissemination of educational materials — consumption of tobacco has decreased significantly after the tax and revenues have been raised.

Data indicate that higher prices may also reduce soda consumption. A review conducted by Yale University’s Rudd Center for Food Policy and Obesity suggested that for every 10% increase in price, consumption decreases by 7.8%.

A recent study released by UCSF supports these claims. Researchers calculated that a one-cent-per-ounce tax on sugar-sweetened beverages would reduce their consumption by about 15 percent in young people.

Given that right now Americans consume an average of 45 gallons of sugar sweetened beverages per person each year, this reduction, they concluded, would have a huge impact: approximately 867,000 fewer obese adults and a savings of over $17 billion in medical costs over a ten year period.

Different approaches exist in terms of how and to whom a soda tax should be applied. In February 2011, the California Center for Public Health and Advocacy worked with State Assemblymember Bill Monning to sponsor state legislation, AB669, which is currently under consideration in the State Assembly.

The bill proposes a penny-an-ounce tax on every soda and sugar-sweetened beverage sold in California. The bill proposes an excise tax, that is, the distributors would pay the tax to the government, in this case, the state. If successful the bill could raise $1.7 billion for childhood obesity programs in California.

Another suggestion is to tax the beverage manufacturers at the source, taxing them for the amount of caloric sweeteners added to beverages at the onset, say a tax per teaspoon of sugar added, rather than taxing the finished product. A recent study conducted by researchers at Iowa State University suggests this solution would be more effective for reducing their consumption by encouraging manufacturers to reduce their use of caloric sweeteners.

The study concluded that although a manufacturer could adjust the consumer price accordingly, it would have less of an impact to the consumer than taxing the finished product.

In Richmond, there’s much debate around the issue. Opponents to the proposed tax say it would encourage consumers to purchase their beverages outside the city limits, or that the soda tax is an elitist tax on the poor.

But Ritterman says he believes the lower income population will benefit the most: obesity numbers were highest among adults and children in low-income households.

“We are already paying a huge tax for the obesity epidemic,” Ritterman said. “It’s costing everybody a lot of money already that we’re not factoring into it, so I think the poor have the most to gain.”

If the California initiative were to pass, it would create a Children’s Health Promotion fund dedicated to childhood obesity programs and activities. Goldstein said there are approximately 20 states considering a soda tax.

Even if either initiative passes, Goldstein points out, reducing sugar-sweetened beverages is not a silver bullet to solve the obesity epidemic. “It’s not caused by a single source and it’s not going to have a have single solution.”

Ritterman agrees. “I think it’s only one part of what we need to do to deal with child obesity,” he said, adding that other issues like public safety in Richmond’s parks, or incorporating physical and nutrition education back into its schools were also key components.

However, bringing attention to the drawbacks of sugary beverages could help the public make better choices and a tax could offset the effects of sugar sweetened beverages on public health, Goldstein said.

“With that information, its important to then make a decision,” Goldstein said. “For each of us to ask ourselves, is it reasonable that that product include revenues to help solve the problem that the product is causing.”

Mary Flynn is a correspondent for the California Health Report at www.healthycal.org.

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