In Oakland, CA, council members are upset with the Mayor Libby Schaaf for pulling a “bait and switch” on its voters.
A Soda tax measure that was passed last year, which is also known as Measure HH, was sold to voters as a measure to help combat obesity and fight the big soda lobby. During the campaign, Mayor Schaaf was a strong proponent of the measure that was pushed to voters on the premise that the money would be used to help fight against the epidemics of childhood obesity and diabetes.
Now that the tax measure has passed and it is several months later, the mayor now wants to use this tax money to help close the city’s $32 million dollar budget deficit.
Council member Annie Campbell Washington wrote on Facebook: “I am deeply offended the proposed budget redirects revenue from our new Sugar Sweetened Beverage Tax for other priorities.
Of course, she is offended, but is she really shocked? Opponents of Measure HH, including the American Beverage Association, warned the money could be used for other purposes since it goes to the general fund and city officials can legally spend it on anything.
Annie Campbell Washington was a co-author of Measure HH and convinced voters, “like Berkeley, Oakland needs a dedicated revenue stream to combat the big-money marketing of soda and sports drinks.”
Since California is struggling financially, could it be possible that Oakland’s Council members were looking for an easy way to raise money? People that buy sugary sweetened beverages seem to have no issues spending upwards of $3 dollars per beverage. How is a penny-per-ounce tax really going to effect the consumer, especially if the additional tax is being sold to voters as money desperately needed to help combat obesity? Makes sense to pay a few cents more for such a good cause, right?
But does it make more sense to advocate for folks to simply not purchase these sugary beverages for their sweet children and instead give them, I don’t know, water?
By adding an additional tax to these beverages, people are not going to suddenly stop buying them. They want the beverage, they are going to buy it. Which is precisely what Oakland officials want so they can generate more money to pay for their budget shortfall.
Make no mistake, the mayor knew the city would be facing a budget deficit before the soda tax measure was introduced and passed.
Mayor Schaaf’s proposed budget is allocating $6 million dollars of the Soda tax measure to be used for fixing potholes, parks, libraries, and affordable housing. How exactly is fixing potholes going to help fight childhood obesity?
Is the soda tax measure really all that it is cracked up to be? Does it really generate more tax money for the city? Let’s look at how well it has worked out for Philadelphia since they were the first US city to pass this measure last summer.
According to Philly.com, two months into the city’s soda tax measure, supermarkets and distributors are reporting a 30% to 50% drop in beverage sales and are now planning for layoffs. How did that exactly backfire?
When you look at a 10 pack of flavored water, it carries a 51% beverage tax. Philly also has a sales tax of 6% and an additional 2%, so the total sales tax was 8%. A 10 pack of flavored water is $5.99, you add the 8% sales tax BEFORE the beverage tax and the total was $6.71. Now you add in the soda tax and your new total on a 10 pack of flavored water is a whopping $9.75!
Labor unions are also suffering greatly. The head of the Teamsters union representing many of the delivery drivers, Danny Grace said members have seen pay cuts by as much as 70 percent because they’re moving fewer products. “Many of them have quit as a result,” Grace said.
Philadelphia Mayor Kenney accepts no admission that the soda tax is bad for the city. Instead, he released this harsh statement against the soda industry shifting the blame;
“I didn’t think it was possible for the soda industry to be any greedier,” Kenney said in an emailed statement. “They are so committed to stopping this tax from spreading to other cities, that they are not only passing the tax they should be paying onto their customer, they are actually willing to threaten working men and women’s jobs rather than marginally reduce their seven-figure bonuses.”
The HH Measure in Oakland was written as a general tax, so it only needed a simple majority to pass. Had it been written as a tax for specific purposes, such as raising money for health programs to help combat obesity, which was what was promised to the voters, it would have needed two-thirds support to pass the measure.
Now that tax is passed and Measure HH is in effect it will be very difficult to repeal. But that will not stop council member Campbell Washington from establishing her “Sugar Sweetened Advisory Board”.
“I will immediately bring forward legislation to limit how these funds can be used and establish the Sugar Sweetened Beverage Advisory Board,” Campbell Washington wrote. “It is outrageous to pull a ‘bait and switch’ on Oakland voters who supported children’s health.”
City officials plan to hold town halls and budget hearings to make changes to the Mayor’s budget proposal before June 30th, as that is when the City Council is set to approve the final version of the budget.
San Francisco and Albany also passed the Soda tax measure, hopefully, they will actually use the tax money for what they promised to use it for.