Evaluation of SSB Taxes in the Bay Area, CA

By Xavier Morales · May 30, 2019

The Praxis Project and The Berkeley Food Institute invited a group of UC Berkeley Goldman School of Public Policy students to take a look at the investment side of sugary drink taxes in the Bay Area.  The result is the attached report entitled: Bay Area Sugar-Sweetened Beverage Taxes: An Evaluation of Community Investments.

While there has been significant research around sugary drink taxes focusing on whether the taxes have been passed on by the producers/distributors (mostly); whether the excise tax on producers is manifesting in a penny for penny price increase at the register (not always); effects on employment (no real impact—but I suspect when we dig deeper into the investment side we will actually see employment increases); effects on grocery prices (no impact); effects on the cost of beverages as a class of retail products (no real impact); if small business retailers are going out of business (no evidence); how much population level consumption of soda is going down (it is dropping); how much population level consumption of water is going up (seems to be going up)—but there has not really been any in-depth comprehensive examination of the investments, or the process of making investments now that we are some years into this process.

For the Praxis Project, and many of the base building organizers we work with to improve health justice and racial equity, how the moneys from SSB tax revenues are invested is important. In campaigns for an SSB tax, communities need to understand that revenues will be reinvested otherwise we give credence to the beverage industry’s claims of regressivity.  We want to see these revenues reinvested in the communities that are suffering from the consequences of generations of disinvestment through all the structural redlining(s) that have resulted in zones of food apartheid, explosive growth of fast food restaurants, undrinkable water, predatory marketing of unhealthy products, and also predatory pricing that makes sugary drinks and ultra processed food cheaper than healthy beverages and food.

[I should put in the disclaimer here that there is not a dollar for dollar tax receipt and investment relationship.  The taxes are collected into the general fund, and commissions/study groups with strong community representation make recommendations to their respective city councils on how to make investments to improve health, reduce sugary drink consumption, and/or increase water consumption.  If it seems that I am implying a one to one relationship anywhere—I’m not.]

We especially want to see this money come back into communities—as research also shows that it is primarily folks of color, the newly arrived, and those with lower incomes that consume sugary drinks at the highest rates.  If Black, Brown and lower income people with the Damoclean sword of preventable diet-related chronic diseases is a reason proponents argue for the need for SSB taxes, then we want investments to come back into communities in a way that builds capacity, builds infrastructure, builds leadership, and that ensures that the healthy choice is actually available.  There is nothing worse than being told what you are doing/eating/drinking is wrong, but then the healthy choice is inaccessible.

At Praxis, we take the long view about building relationships and capacity.  Investments are proof that we see communities as authentic partners in the solution.  Also, the capacity that is built to address sugary drink consumption that includes advocating for ensuring healthy options become the norm, can also be harnessed to improve nutrition, and parks, transportation systems, and other pressing issues across the determinants of health.  This is the realm of base building community organizers—or what we at Praxis like to call, “organic” public health.

It is these relationships and trust between “traditional/professional” public health with “organic” public health that will need to be harnessed when the beverage industry and their allies start their efforts to repeal SSB taxes.  In California, health advocates are getting ready to engage in an epic fight to repeal preemption of sugary drink taxes and to impose a statewide SSB tax.  Those that have actually been through a direct fight for a soda tax will know how overwhelming the beverage industry and their allies will push back.  There are plenty of examples of the beverage industry driving wedges through regressivity arguments.

We need to show the investment side of the SSB taxes and that these moneys in fact do go back into community in ways that make a difference.  We need to show how the infrastructure that makes investments is responsive to community needs. That these funds are building infrastructure and that the drop in consumption of sugary drinks is not just because poor folks can’t afford it, but rather because the education efforts and making the healthy choice the easy choice are being driven through investments.  In Berkeley a whole generation of youth are being taught in the schools about how to eat/drink more nutritionally.  Healthy Black Families is leading the effort of education, and providing subsidized fruits and vegetables for community members.  Multicultural Institute is working with Latinx day laborers to help them understand the benefits of water over sugary drinks and also supporting oral health screening and services.  The YMCA has received funds to implement the CDC best practice Diabetes Education Prevention Program and also nutrition focused workshops for the parents of Headstart kids.  LifeLong Medical was funded to support their work in Oral Health and to also help manage a small grant program. Ecology Center was funded to work with Berkeley High School students to make water consumption the norm and to also provide subsidized fruits and vegetables in one of Berkeley’s food apartheid zones.

If the beverage industry came to Berkeley to try to repeal the voter initiated SSB tax, they would have to contend with a deep constituency that recognizes that the path to health justice runs right through community and is predicated on trust and authentic partnerships that have been cemented through the participatory budgeting infrastructure provided for by the soda tax legislation.  Participatory budgeting...yes, another argument that counters another beverage industry messaging staple that refers to SSB taxes as nanny state initiatives.

This work by the Goldman School of Public Policy at UC Berkeley’s students is pivotal for the fights that are to come as we continue to work towards health justice.