The penny-per-ounce tax affects the following sugar-sweetened beverages sold in the city:
- Sports and energy drinks;
- Juices with added sugar; and
- Syrups that go into sugary drinks at cafes, such as Starbucks' Frappuccinos.
Measure D does not tax diet sodas or alcohol.
The tax is not imposed on retailers or consumers of sugary drinks. Instead, the LA Times article points out that Measure D levies the tax on the 15 to 20 companies that contract with beverage makers to distribute their products in the city; they will be charged as part of their business license fee.
Berkeleyvsbigsoda.com, an advocacy group that campaigned for Measure D’s passage, explains that the tax revenue would go into the city’s general fund. In addition, Measure D creates a panel of experts in child nutrition, healthcare, and education to make recommendations to the City Council about funding programs that improve children’s health across Berkeley. The panel will issue annual public reports detailing the impact of funded programs.
The advocacy group points out that sugary drink taxes are modeled on other excise tax regimes, like tobacco taxes. It describes the three ways that these kinds of taxes work:
- They raise awareness.
- They raise revenue for community programs that combat the influence of sugary drink marketing. Revenue from the tax could fund community and school based programs across Berkeley that give families tools to make healthy choices about what they eat and drink.
- They reduce consumption. After Mexico passed a similar soda tax at the national level, consumption of sugary drinks decreased. It’s a case in point to the growing body of research that predicts a penny-per-ounce tax will decrease consumption and save lives.
Why tax sugary beverages?
Berkeleyvsbigsoda.com further reveals that soda and other sugary drinks are the number one source of added sugar in the American diet, and are linked to increased risk of diabetes and other diseases, like heart and liver disease, obesity, and tooth decay. Here are some facts on sugary drink consumption and diabetes posted on the site:
- A 20 ounce bottle of soda is equivalent to 22 packets of sugar.
- 2 out of 3 California teenagers drink at least one soda or other sugary drink each day.
- Drinking even one sugary drink a day significantly increases the risk of Type 2 diabetes.
- Liquid sugar affects the body in a unique way that increases the risk for diabetes more than sugar in food.
- Beverage companies spend hundreds of millions of dollars annually marketing directly to youth, bypassing parents, and market more heavily to minority youth.
- 40 percent of all children will develop Type 2 diabetes in their lifetimes. The prediction is worse for African American and Latino children, as the likelihood increases to 50 percent.
- 40 percent of Berkeley’s 9th graders are overweight or obese.
The LA Times article noted that the American Beverage Association spent $2.4 million in an unsuccessful effort to defeat Measure D and another $9.1 million in San Francisco. In San Francisco, voters rejected a similar measure, Proposition E, which would have imposed a 2-cents-per-ounce tax on sodas and other sugar-sweetened drinks.