Oakland city councilmembers propose soda tax for November ballot

On April 7, a group of Oakland city councilmembers proposed a sugar sweetened beverage distributor tax, or more commonly known as a “soda tax,” for the November 2016 ballot.

The proposed tax would charge an extra 1 cent per fluid ounce of sugary beverages, just like the one approved in Berkeley in 2014. The revenues from the tax would go to the city’s General Purpose Fund and are estimated to “range from $6-12 million annually,” according to a press release issued by Councilmember At-Large Rebecca Kaplan, one of the proposal’s authors. The funds will be directed towards health education programs and efforts to improve children’s health in Oakland.

According to the proposal, Oakland will also set up an advisory board of residents, medical and dental professionals, and representatives from the Oakland Unified School District, who will guide the city council on how to spend the funds collected.

The soda tax proposal was co-authored by three councilmembers: Kaplan, Annie Campbell Washington (District 4) and Desley Brooks (District 6.)

“The reason why I really got onboard with that idea is that if you start to do research on sugar consumption, you’ll start to quickly realize that sugar in liquid form is very toxic,” said Washington. “A group of doctors, dentists and health experts came to meet with me to talk about sugar and its impact on our community, and more specifically the diseases related to sugar consumption, such as diabetes and tooth decay in children.” The statistics that they shared, she said, showed that one-third of all children and one-half of African American and Latino children, are predicted to develop Type 2 diabetes in their lifetimes. These numbers amount to what she considers a “public health crisis.”

A tax, Washington said, is one of the ways that the city council could educate the community about the dangers of sugar consumption and diseases related to it. “The tax will provide the revenue source that could be used to educate the community about the dangers of sugar consumption. It could also be used to fund any sort of health and well-being programs for young people,” she said.

According to Washington, there has been “overwhelming support” for the tax from the Oakland community. So far, their proposal has received endorsements from State Senator Loni Hancock, State Assemblymembers Rob Bonta and Tony Thurmond, Alameda County Supervisors Wilma Chan and Keith Carson, Mayor Libby Schaaf, Oakland schools Superintendent Antwan Wilson, and all of the school board members.

“I attribute the positive response to a very high degree of experience with these diseases and how they are disproportionately affecting our African American and Latino families. I think that the leaders and our community have their own personal experiences working closely with African American and Latino families here in Oakland and recognize the devastating impacts that sugar is having on our families,” said Washington.

A March 2015 report by the World Health Organization indicates that intakes of sugar-sweetened drinks are linked to the likelihood of a child being overweight or obese. The US Centers for Disease Control and Prevention have also stated in their website that “high consumption of sugar-sweetened beverages, which have few, if any, nutrients, has been associated with obesity.”

Two years ago, neighboring city Berkeley successfully passed a soda tax. It received approval from 75 percent of voters on the November 2014 ballot. But in Richmond and San Francisco, similar measures failed to gain voter approval in 2012 and 2014, respectively.

“In Berkeley, we had every elected official and every person running for elected office supporting our measure, and that was important,” said Berkeley City Councilmember Laurie Capitelli, who was part of the steering committee of the “Yes on D” campaign in Berkeley.

In Richmond, he said, the campaign was small compared to the “avalanche of money” that came from soda supporters to oppose the measure. “The beverage industry will do whatever they have to do to intimidate people into not supporting the soda tax. And in Richmond they were going to small businesses and trying to intimidate them,” said Capitelli.

According to Capitelli, the measure failed in San Francisco because the community was divided in their support.

Xavier Morales, who was also on the steering committee of the “Yes on D” campaign, said that one of the keys to the Berkeley’s success was in how the measure was designed. “In Berkeley, what we did was we designed the measure to only require 50 percent [of voters’ approval] because our tax is going to a general fund,” said Morales. He contrasted this with San Francisco, where the soda tax proposed was twice the amount of the one in Berkeley and was designed as a specific tax, which meant that it required the approval of 66 percent of voters.

In a study published by the Public Health Institute in November 2015, the Berkeley soda tax raised close to $700,000 in revenues in the first six months of its implementation. This January, the Berkeley City Council approved the allocation of $1.5 million from the general fund to fight soda consumption.

Morales is now the vice chair of a panel consisting of experts in child nutrition, healthcare and education that is responsible for making recommendations to the Berkeley City Council on how to allocate revenues generated from the tax. This, according to Morales, ensures that the money will be used to reduce the consumption of sugary drinks and address the health effects of their overconsumption, such as diabetes, heart diseases and strokes.

Morales called a potential soda tax for Oakland a “great” development, since Oakland has similar demographics to Berkeley. He also said that the soda tax would provide resources that the city can use to educate people and make sure that there are healthy alternatives to sodas available.

He also warned that the beverage industry is going to come in to Oakland “really hard” to stop the initiative from moving forward, telling small business owners that the soda tax will hurt their sales. Morales argued that this should not be the case: In the Berkeley model, the tax is imposed on distributors, many of which are large corporations who can afford to not pass the tax along to retailers.

In a statement sent to Oakland North by a representative of the American Beverage Association (ABA), one of the most vocal opponents against soda taxes, the industry organization argues that “beverage taxes are misguided and ineffective policies that have no meaningful impact on public health. In fact, there is no guarantee that this proposed legislation will fund health programs in any way as the revenue is directed to the general fund where it can be used for any purpose. Instead, this bill will only hurt small businesspeople who rely, in part, on beverage sales for their livelihoods. They also cost jobs and hit middle- and lower-income families the hardest.”

And some store owners in Berkeley, where the tax is already in effect, are urging their Oakland counterparts to not support the tax. Young and Susan Choi, the owners of Johnston’s Market at Durant Avenue in Berkeley, voiced their disapproval of the tax. “I only have one advice: Don’t do it! It kills small businesses!” said Young Choi heatedly.

They said that while they have had to increase the prices of sugary beverages in their shop, their customers are often unaware that the increase is due to the soda tax. They also believe that there is a lack of transparency about where the tax revenues are going, saying that they have not seen any changes nor improvements in the city thanks to the increased taxes.

Susan Choi said that the soda tax has added administrative troubles for store owners. “When our distributors make their delivery, just for Berkeley they have to add a line for soda tax. They have to figure out what the soda tax is, but they don’t even know what to charge,” she said. “The receipts are not very clear. It’s confusing for them and it’s confusing for us. It takes more time for us accounting-wise to figure out what is taxable and not taxable. And I don’t see those people not drinking those sodas just because they have to pay more.”

But Capitelli disagrees. He said that although there aren’t any “hard numbers” yet, preliminary studies conducted in Berkeley show that they have seen a decline in the sale of sugar-sweetened beverages “but no one has indicated that their business is being undermined, or that they are at risk because of the added tax.” This, he believes, is because when people are thirsty, they will still go to the stores to buy their drink, and “what we are trying to do is of course to encourage them to pick up drinks that don’t have added sugars in it, such as bottled water.”

In Oakland, many small business owners seem unaware of the potential for a soda tax. Azam Ali, the store manager of Both Sides Convenience Store on Telegraph Avenue, said that he was unsure of how one would affect the business, but he might “go to Berkeley to have a look” since some of his cousins are running a similar business there.

On May 3, the Oakland City Council will vote on whether to place the measure on the November ballot. Once on the ballot, it will only require a majority vote (50 percent plus one) of registered Oakland voters in order to pass.

“We hope that the Oakland City Councilmembers will listen to those who elected them and will choose to work on policies that make it easier—not harder—to live, work and raise a family in Oakland,” wrote the representative from the ABA.

Washington said that the most important thing is to recognize that a public health crisis is affecting young people in Oakland, especially children of color. “We have something that we can do to make an impact in reducing diseases in those children,” she said.