Ballot measures to levy a tax on sugar-sweetened beverages passed in three Bay Area, Calif., cities – Albany, Oakland and San Francisco – and Boulder, Colo., on Election Day. And just two days after, the Cook County (Illinois) Board of Commissioners also decided to tax sweetened beverages. A one-cent-per-ounce tax will be levied in Bay Area cities and Cook Country, and a two-cent-per-ounce tax will apply in Boulder.
The number of U.S. residents living in localities with a soda tax law increased by almost 350 percent last week, from 1.7 million to 7.5 million (though a number of these taxes have yet to take effect). This striking increase is largely due to Cook County—the county that includes Chicago and surrounding suburbs and has a population of over 5.2 million residents. Cook County is nearly 5 times as populous as the next largest city with a soda tax on the books, Philadelphia. The recent success of the tax has spurred proponents to set their sights on Santa Fe, New Mexico, and the state of Illinois, per reporting by Politico Pro Agriculture.
Cook County Board President Toni Preckwinkle pushed the soda tax proposal primarily as a revenue- raising measure to balance the county budget and avoid further layoffs. But as we noted in our recent report, The Short and Sweet on Taxing Soda, taxing sugar-sweetened beverages is regressive and an unsustainable source of revenue. U.S. soda consumption is reaching record lows. If the tax has its intended effect, it would drive consumption even lower, meaning localities may not be able to rely on it as a consistent source of revenue.
Despite the shortcomings of soda taxes, new research suggests that on balance, taxing sugar-sweetened beverages can improve public health and reduce healthcare spending. Whether those public health benefits outweigh the fiscal shortcomings of these taxes is a matter for the public and their elected officials to decide.