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National Restaurant Association - Will a ‘soda tax’ be hard to swallow?

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Will a ‘soda tax’ be hard to swallow?

The debate around taxing sugary beverages is growing.

Politicians are looking to tax sugar-sweetened beverages that retailers and restaurants sell. Some are even throwing artificially-sweetened drinks into the mix. They say it’s to curtail consumption, but there’s no denying it creates extra revenue to support budget shortfalls and public works programs.

A little bit of background

According to some public health organizations, the beverages consist of sodas, energy drinks, pre-sweetened teas and caloric sweeteners. They say they’re linked to Type 2 diabetes, obesity and tooth decay.

A national tax hasn’t happened, but several states, including California, Connecticut, Maryland, Vermont, and Washington, have introduced their own legislation. Most haven’t passed; the one in Washington is pending and West Virginia has a little-known “soda tax” on its books.

But measures in cities and other locales are the ones to watch. In some areas, the tax has been introduced as a ballot initiative. In others, it passed. In California, the cities of Albany and Berkeley enacted legislation. Philadelphia also implemented the tax. In San Francisco, Oakland, Calif., Boulder, Colo., and Cook County, Ill., legislation passed, but the taxes there are not yet in effect.

Where things stand …

Are you concerned about a “soda tax” in your city? Here’s where they are now:

Albany, Calif.
The City Council placed a soda tax on the November 2016 ballot, which passed. The 1-cent-per-ounce distributor tax on sugar-sweetened beverages should generate an extra $223,000 in revenues.

Boulder, Colo.
The city’s 2-cent-per-ounce distributor tax on sugar-sweetened beverages passed in November. It is expected to generate an additional $3.8 million per year in revenues. The money will help support public health programs.

Berkeley, Calif.
The nation’s first “soda tax” was passed in 2014 and went into effect a year later. The 1-cent-per-ounce distributor tax on sugar-sweetened beverages has generated additional annual revenues of more than $1.2 million.

Cook County, Ill.
County board president Toni Preckwinkle proposed a 1-cent-per-ounce tax on sugar-sweetened and artificially-sweetened beverages last October. She introduced the tax as part of the county's 2017 budget. It passed and revenues will be applied to the budget’s projected shortfall this year.

Oakland, Calif.
The City Council measure passed in November. The tax calls for a 1-cent-per-ounce charge on sugar-sweetened beverages. It is expected to generate additional revenue of $6 million to $10 million.

In June, the City Council passed a 1.5-cent-per-ounce distributor tax on sugar-sweetened and diet beverages. Mayor Jim Kenney proposed the tax in last March. It passed as part of the city’s budget. Funds from the tax could top $91 million, according to published reports, and will help support universal pre-K education, community schools, school and city building retrofits and the city’s pension system.

San Francisco
City supervisors pushed for a 1-cent-per-ounce distributor's tax on sugar-sweetened beverages in 2015. The measure passed in November. The extra revenue is expected to reach $15 million and go to the city’s general fund.

Santa Fe, N.M.
A special election will be held May 2, so voters can decide whether the city should impose a 2-cent-per-ounce distributor tax on sugar-sweetened beverages. The mayor wants to use the extra revenue to fund early childhood education programs.

Mayor Ed Murray proposed a 2-cent-per-ounce distributor tax on sugar-sweetened beverages that could raise up to $16 million in additional revenue. He also claims the tax would help eliminate racial disparities in education. In-store-prepared coffee beverages, 100-percent fruit juices, infant formula and diet drinks are exempt from the tax.

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