Seattle is well into its second year of the Sweetened Beverage Tax. Based on what we’ve learned so far, the tax is functioning as intended on its first goal: Growing programs that increase healthy food access and support for child health and early learning. We are waiting to learn whether the tax will meet its other goal: Reducing sales of sugary beverages.
The City Council adopted the tax in June 2017 to improve the health of Seattle residents, and address persistent health and education inequities. The measure also created the Sweetened Beverage Tax Community Advisory Board, which makes community-informed recommendations to the city about investing tax revenues to meet the goals identified above. The board prioritizes programs that advance equity and are likely to improve community well-being.
Last week the board published its first report, which provides the first comprehensive picture of how the tax revenues are being used.
The tax is raising substantial money: $22.5 million in 2018 and $10.5 million in the first half of 2019. Over that span, tax revenues were stable, mirroring the experiences of Berkeley, California; Philadelphia; and Boulder, Colorado — other cities that have enacted similar taxes.
The 2018 revenues were very close to those predicted by a widely used economic model developed at the University of Connecticut. It exceeded the city’s estimate of $14 million — a conservative amount based on questionable assumptions about pretax consumption rates.
Revenues are being spent as planned — mostly. In the 2018 budget, more than $17 million went toward creating and expanding programs that increase access to healthy food and support child health and early learning for people with low incomes and others affected by health and education inequities. Revenues also supported the 13th Year Promise Scholarship (which pays for community college for Seattle high school graduates), evaluation of the tax and tax administration.
Some examples of how the tax revenues are being used to improve the lives of Seattle’s residents include:
- Fresh Bucks is a healthy food program that helps Seattle residents with low incomes afford fruits and vegetables. It provides subsidies that customers can use to buy produce at farmers markets, neighborhood grocers and Safeway stores. Before the tax, there were 3,392 users. After the tax, 18,703 people benefit.
- The Fresh Fruit & Vegetable Program provides elementary-school students, many from low-income households, with a healthy snack during the school day. Before enactment of the Sweetened Beverage Tax, only six Seattle schools qualified for the program. Thanks to the beverage tax, the program is available in nine additional elementary schools, increasing healthy food access for an additional 7,000 students.
- Local food banks received $1.5 million.
- The Child Care Assistance Program provided $2.3 million in subsidies for licensed child care to 491 working families in Seattle.
The tax is the only source of revenue to support expansion of these programs. Even with the tax support, much more could be done. For example, 3,000 families are on the Fresh Bucks waitlist.
The only significant deviation of tax revenues from intended use was the diversion by Mayor Jenny Durkan of $6 million into the general fund. Her budget replaced general funds that supported existing food access and early childhood programs with Sweetened Beverage Tax funds, rather than using the tax funds for new or expanded programs as required by the ordinance that established the tax.
The advisory board and many community organizations have insisted that the city use the revenues as promised when the ordinance was signed into law. The City Council responded appropriately and acted to preserve trust in government. It passed legislation to put Sweetened Beverage Tax revenues in a protected special fund and to prohibit any further diversion of funds. The mayor vetoed this legislation, and the council overrode the veto.
The second goal of the tax is to reduce sales of sugary drinks, a harmful product that causes diabetes, heart disease, obesity, tooth decay and a host of other health problems. The beverage industry heavily markets sugary drinks, targeting people of color who suffer inequitably higher rates of the diseases linked to its products.
We don’t yet have credible evidence of the effects of Seattle’s tax on sales. A key study will be released in the coming months. We know that evaluations published in peer-reviewed scientific journals show that immediately after those taxes were imposed in Berkeley and Philadelphia, sales of taxed beverages dropped substantially — by 9.6% in Berkeley and 38% in Philadelphia (Philly has a higher tax rate). We expect to see similar impacts in Seattle.
Sugary drink taxes are working here in Seattle and across the nation. They show what is possible when community leaders and elected representatives work together, despite fierce opposition from Big Soda, to improve their communities’ health.