Jessica Leigh Hester is a former senior associate editor at CityLab, covering environment and culture. Her work also appears in the New Yorker, The Atlantic, New York Times, Modern Farmer, Village Voice, Slate, BBC, NPR, and other outlets.
This week, Philadelphia joins the ranks of cities weighing fees on sweetened beverages.
Guzzling sugary drinks is about to get a little pricier in Philadelphia. In a 13-4 vote Thursday, the city council approved mayor Jim Kenney’s plan to levy a tax of 1.5 cents per ounce on sweetened fountain drinks and bottled beverages, including full-sugar and diet sodas, energy drinks, and iced teas.
Shoppers will have to pony up an additional $2.16 for a 12-pack of soda. This measure is the latest in dozens of attempts across the U.S. to curtail or tax consumption of sugar-laden beverages.
Kenney framed the tax as a vehicle to generate $91 million a year to rehabilitate parks, recreation centers, and libraries, and expand pre-kindergarten programs. The Philadelphia Inquirer reported that an estimated 20 percent of the funds—about $81.4 million over 5 years—would be allocated to various other spending programs, including employee benefits.
Soda lobbyists have worked to sway the vote—and public opinion—by arguing that the tax would be a burden to low-income consumers. Opponents also alleged that the fee would weigh on storeowners and discourage grocers from opening outposts in the city.
Though Kenney’s focus was firmly trained on fiscal health, some experts maintained that the tax could yield public health benefits, too. Compared with other large U.S. cities, Philadelphia has a higher-than-average rate of chronic diseases such as hypertension, cardiovascular disease, diabetes, and obesity. Recent research from the Harvard School of Public Health estimated that the tax could help prevent 2,280 new diabetes cases each year, and help an annual total of some 36,000 people avoid obesity. (One caveat: Those forecasts were based on projections using a tax of 3-cents-per-ounce, which has since been halved.)
A brief history of soda taxes
In 2012, soda taxes sailed through in Berkeley but failed in San Francisco. Across the country, dozens of proposals have flamed out since 2008. In 2014, the New York State Court of Appeals struck down the plan to curtail sales of super-sized drinks, proposed by former Mayor Michael Bloomberg in 2012. The judge wrote that the city was overreaching, and that the plan to ban sales of beverages larger than 16 ounces “exceeded the scope of its regulatory authority.” The dissenting opinion pointed to a history of city regulation of public health matters, such as the water supply and lead paint. The American Beverage Association—which has funneled millions of dollars into anti-tax campaigns—applauded the decision, suggesting that the ban would have meddled with consumers’ “freedom of choice,” the New York Times reported.
Bloomberg has thrown his weight (and checkbook) behind the measure in Philly. Both Democratic presidential hopefuls have voiced their opinions, too: Bernie Sanders slammed the proposal, arguing that it disproportionately targets low-income consumers; Hilary Clinton endorsed it, lauding the idea of universal pre-school. Like Kenney, she largely sidestepped discussion of any public health windfall.
In Philadelphia magazine, Holly Otterbein posited that this decision could be a tipping point for other cities: maybe sodas will follow the footsteps of smoking bans, she suggested—first implemented at the local level before reverberating more widely. Bloomberg echoed that sentiment in a statement released soon after the bill was passed. “When cities lead the way, solutions that were once considered non-starters can quickly catch fire and spread around the world,” he said. “It would not be the first revolution Philadelphia has sparked.”
Will it work?
That answer depends, in part, on what the end goal is. Prospective public health benefits are a little murky: Though a study in Pediatrics found that warning labels deterred purchases, other long-term research has concluded that consumers don’t necessarily opt for healthier items even when they’re readily available and presented in tandem with nutrition education campaigns.
In a recent op-ed in the Philadelphia Inquirer, though, Barry M. Popkin, an economist and professor of nutrition at University of North Carolina, Chapel Hill, looked to Mexico, which has taxed sugary drinks since 2014. After 12 months, Popkin wrote, soda sales among low-income consumers decreased by 17 percent. Teasing additional research under journal review, he added that consumption plummeted most dramatically among consumers who had reported the highest initial intake.
In the case of Berkeley, results were mixed. Analysis from Cornell University and the University of Iowa found that soda companies and distributors tended to absorb the higher cost themselves, instead of passing all of it on to consumers. “This is important because the point of the tax was to make sugar-sweetened beverages more expensive so consumers would buy, and drink, less of them,” the Cornell professor and study co-author Jim Crawley said in a statement. The researchers didn’t identify a clear relationship between the tax and purchasing behaviors. From a financial perspective, though, things were easier to quantify: The tax generated $1.2 million in its first year.
UPDATE: This post has been updated to reflect that the proposal passed on June 16.