A tax on sugary drinks sold in Seattle has produced more money than expected — and the missing Capitol Hill mystery pop machine had nothing to do with it. Now City Hall is sorting out how best to put the healthy revenue from unhealthy — without moderation! — beverages back into the community.
Friday, members of the Seattle City Council met with the Community Advisory Board of the Sweetened Beverage Tax to discuss why the tax exceeded revenue projections, what to do with the extra money, and to make recommendations for how to use the money in the 2018 and 2019 budgets.
“Communities of color and low-income people face the greatest disparities in terms of health and education outcome,” Christina Wong, co-chair of the board tells CHS.
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“I really valued both the intention behind the creation of the CAB and the commitment that our board has made to representing the communities that are most impacted by these issues. To help improve health outcomes for people through education about sugary beverages. To provide more equitable investments in programs and services that will help reduce food insecurity and also help with kindergarten readiness. To help educate the public about the work that the tax has been doing, the kind of investment that have been made, and the really great programs that have been made or even expanded because of the tax.”
The Sweetened Beverage Tax, or SBT—sometimes called the “soda tax”—began the first day of this year and imposed a tax rate of 1.75 cents per ounce on all sugar-sweetened beverage products sold in Seattle. The purpose of the tax is to reduce the consumption of sugary drinks — which research shows can lead to type 2 diabetes, heart disease, strokes, weight gain and tooth decay — and use the tax revenue to improve access to healthier food options and provide funding for programs designed to reduce educational disparities in communities of color. The tax was imposed on distributors who could choose whether they wanted to pass on the cost to the retailers, who might then pass it on to consumers.
The original forecast for annual revenue from the tax was $14,820,000, but the city collected more than $10 million in the first six months. The Community Advisory Board said the tax will likely continue to generate more revenue than originally projected.
“The City Budget Office is taking a close look and revise those projections,” said Bridget Igoe, staff advisor to the SBT CAB in the city’s Office of Sustainability and Environment. “In general, it can be pretty difficult to create a forecast for the Sweetened Beverage Tax. The forecast that was created was based on experience in Philadelphia and Berkley.”
“I guess it was a conservative estimate,” Igoe said.
Proponents say they aren’t as surprised as City Hall. The projected estimates, though higher than estimated are in line with what other cities have seen, Wong tells CHS.
In a letter to Mayor Jenny Durkan sent on August 21, the Community Advisory Board presented its unanimous position that “all beverage tax revenues — including any additional funds generated in 2018 and 2019 that exceed projections — should be spent in accordance with the beverage tax ordinance, the intent of the ordinance, and the recommendations put forth by the CAB.”
The 11-member board wants to invest the money in the following areas: healthy food and beverage access, birth-to-three services and kindergarten readiness, a public awareness campaign about sugary drinks, support for people actively living with obesity and diabetes, community-based programs to support good nutrition and physical activity and evaluation support for those programs.
Meanwhile, Friday also brought a discussion with the Seattle Department of Transportation and the Office of Sustainability and Environment on how to implement a transportation voucher pilot program, to provide low-income residents living in so-called “food deserts” with vouchers to use public transportation — or possibly private ride share companies — to shop for food in more robustly resourced neighborhoods.