State of the City: New Sugary Beverage Tax to Fund Eliminating Educational Disparities

Mayor Ed Murray proposed major new investments in education to eliminate the opportunity gap between white students and African American/Black students and other historically underrepresented students of color. These investments are based on recommendations from the Education Summit Advisory Group. To fund these recommendations, Mayor Murray will propose a local tax on sugary drinks including some forms of soda, energy drinks, juice and sweetened teas. The proposed ordinance would impose a two-cents ($0.02) per ounce tax on distributors of sugary drinks.

Several other cities have implemented similar taxes to fund critical issues such as education, and have found additional health benefits. The Centers for Disease Control and Prevention has said soda taxes are “the single most effective remedy to reverse the obesity epidemic,” and a similar tax in Berkeley, Calif. reduced the consumption of sugary drinks by 20 percent.

The proposed tax is expected to raise $16 million per year to fund programs recommended by the Education Summit Advisory Group.

 Who Would Pay?

• The tax will be levied on distributors of sugary drinks in the City.
• The tax applies to all distributors regardless of the size of the business.

What Products Would be Subject to the Tax?

• The ordinance defines sugary drinks to include liquids with a specified amount of caloric sweetener, syrups and powders that are used to prepare sugary beverages, including:
• Sodas (such as Coke, Pepsi, Mountain Dew)
• Energy and sports drinks (such as Monster, Red Bull, Gatorade, Powerade)
• Fruit drinks (such as Sunny D)
• Sweetened teas and ready-to-drink coffee drinks (such as Arizona, Starbucks)
• The ordinance exempts such beverages as 100% fruit juice, in-store prepared coffee beverages, infant formula, medicine, and would NOT apply to “diet” beverages.

 What Programs Will Receive Funding from the Revenue Raised by the Tax?

• Revenue raised through this tax will be primarily focused towards funding the recommendations from the Education Summit Advisory Group. These recommendations are aimed at reducing disparities between white and African American/Black students and other historically underrepresented students of color.
• As part of these programs, investments will be made for Birth-to-Five programs such as expansion of the Parent-Child Home Program.
• Additional investments will be made to expand healthy food access through the “Fresh Bucks” program.