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Tax on Sugar-Sweetened Beverages
City of San Francisco
2/3 Approval Required
Fail: 123,475 / 55.59% Yes votes ...... 98,625 / 44.41% No votes
Index of all Propositions
|Information shown below: Summary | Fiscal Impact | Yes/No Meaning | Arguments ||
Shall the City collect a tax of 2 cents per ounce from the distributors of sugar-sweetened beverages to fund health, nutrition, physical education and active recreation programs?
A sugar-sweetened beverage is a beverage that contains added sugar and 25 or more calories per 12 ounces, including some soft drinks, sports drinks, iced tea, juice drinks and energy drinks.The tax would also apply to syrups and powders that can be made into sugar-sweetened beverages in a beverage-dispensing machine, such as fountain drinks.
The distributors of sugar-sweetened beverages in San Francisco would be responsible for paying the tax.
Some beverages would not be subject to the tax, even if they contain added sugar.These include:
A 15-member Healthy Nutrition and Physical Activity Access Fund Committee would advise the Mayor, the Board of Supervisors and City departments about how to spend the funds.
Because the proceeds from the tax are dedicated to specific purposes, approval of this measure requires two-thirds of the votes cast.
Should the proposed ordinance be approved by the voters, in my opinion, it would have a significant impact on government costs and revenues.
The ordinance provides for a tax of two cents per fluid ounce on sugar-sweetened beverages sold in San Francisco, with the tax revenue dedicated to funding nutrition and health programs. Depending on con- sumer and market factors, the tax is estimated to generate between $35 million and $54 million annually.
Revenue collected through the tax would be dedicated to health purposes with 40% to the San Francisco Unified School District for student nutrition services, 25% to the Department of Public Health (DPH) and to the Public Utilities
Commission for health programs and for public drinking water stations, 25% to the Recreation and Park Department for recreation pro- grams and 10% to DPH for community grant programs in health-related areas. Up to two percent of revenue may be used for administration and evaluation by the Treasurer/Tax Collector and other City departments.
The ordinance specifies that these tax revenues may not be used to replace funds already budgeted by the City for the purposes of the ordinance.The Controller's Office estimates that this baseline expenditure amount is currently approximately $25.2 million--with approximately $20.7 million in Recreation and Park programs and $4.5 million in DPH programs. Like other baseline programs, the City would be required to continue these programs going forward and grow them at the same rate as the City's discretionary revenue grows.
The ordinance would place the tax on the initial distribution of each sugar-sweetened beverage in the City and details exemptions of various types such as for infant formula, medical products, and other specialized products. This statement does not address the impact of the proposed ordinance on the private economy.
|Arguments For Proposition E||Arguments Against Proposition E|
|Prop E will provide up to $54 million for physical education and nutrition programs in San Francisco public schools, active recreation programs, food access, oral health programs, water fountains and water bottle fill- ing stations citywide.
Prop E creates a small two-penny per ounce tax, paid by the distributors of soda and sugary beverages--the largest source of added sugar and calories in the American diet. Just one sugary beverage a day increases your risk for developing Type II diabetes by 26%. More children suffer from dental decay than any other chronic disease.
Cigarette taxes significantly reduced smoking; a soda tax will reduce consumption of sodas and other sugary beverages that are driving the diabetes epidemic.
If we do nothing to address this emerging health crisis, 1 in 3 children today will develop Type II diabetes in their lifetime; for children of color the risk is 1 in 2. Our bodies cannot effectively process sugar in liquid form, resulting in liver and pancreas damage.
San Francisco's Economic Analyst reports San Franciscans spend $61 million on health care costs directly related to consumption of soda and sugary beverages. Prop E is a result of advocates from low-income and communities of color, asking policy leaders to intervene to help decrease consumption of soda and sugary beverages.Their neighborhoods are aggressively marketed to, and many times, a bottle of soda is cheaper than a bottle of water at a corner store.
Prop E will reduce soda consumption. Mexico instituted a soda tax this year and already consumption dropped 5-7%. San Francisco's City Economist estimates consumption could drop as much as 31%, and provide up to $54 million in funds for health, nutrition and active recreation programs.
A soda tax is a simplistic and ineffective solution to a very real and complex problem. Proponents claim that a soda tax will result in lower calorie consumption and weight loss, but obesity is a complicated dis- order which involves many components besides the intake of sugary drinks. Calories in soda are no more or less fattening than calories in other food. Studies show that taxing sodas will not help reduce obesity in the long run because consumers are able to buy alter- native sugary drinks or high calories snacks in lieu of soft drinks. In fact, in one particular study, subjects substituted 8 calories of milk for 6 calories of sugar sweetened beverage.
Besides being ineffective in curbing weight, a soda tax has other unintended consequences. It is regressive tax--it taxes a larger proportion of income from poorer people and aims at pleasures they are more likely to partake in. (Note that the supervisors are not taxing frappuccinos, which are at least as unhealthy as sodas). Moreover, a soda tax will hurt small neighbor- hood stores that rely on soft drinks for much of their revenue.
This is a "sin tax". Politicians like these taxes because at least in the short run they lead to an increase in revenues which increase the power of the politicians who can dispense them. Longer term, however, this tax will lead to even greater increases in expenditures (in this case for recreation, health, and nutrition) that can- not be supported by the tax imposed.
It's your body--if you want to eat or drink something unhealthy, shouldn't it be up to you?
The City Council of Richmond placed a soda tax on the ballot and 2/3 of the voters rejected it. This proposal deserves the same fate. Vote NO on Prop E.