City set to hear testimony on soda taxes
Soda and energy drinks. (David Paul Morris / April 30, 2012)
The hearing was spurred by a resolution presented by Ald George Cardenas ((12th) earlier this year that asked the City Council to consider a 15 to 35 cent tax on sugary drinks in an effort to reduce consumption, curb obesity, trim health care costs and raise money for health programs.
The battle lines will be filled with the usual players on either side, according to Cardenas legislative aid Claudia Rodriguez. Scheduled speakers include public health advocates, academics and doctors on one side and trade associations that sell soda on the other, she said.
Last week Chicago hosted its first ever symposium on "The Impact of Sugar Loaded Beverages on the Obesity Epidemic." From its title you may be able to guess that most agreed that sugar loaded beverage consumption should be reduced through clinical and public policy approaches.
Which brings us back to the resolution. Rodriguez notes that Chicago has already hit its limit on the amount of taxes it can levy on sugary beverages (three percent so far) so the resolution could go into effect only if and when the state raised that limit. For this reason the hearing will serve as a way to "start a dialog about ways we can address the obesity epidemic" rather than an immediate path toward a new tax, she said.
Soda tax advocates, however, stress that their studies show sugar sweetened beverage (SSB) taxes must be significant (at least one penny per ounce) to have significant impact.
They add that such a tax could raise much needed funds for health promotion programs. According to a calculator created by the Yale Rudd Center for Food Policy and Obesity a 1-cent per ounce tax on SSBs alone would generate over $129 million in revenue; if the tax were on all SSBs and diet drinks, it would be over $187 million in revenue in 2012.
"The potential for these taxes, not just in terms of health benefits but also revenue generation for a cash strapped city and state could be enormous," said Jamie Chriqui, a senior research scientist at the Institute for Health Research and Policy at University of Illinois at Chicago. "They could also help reduce consumption among people who are disproportionately effected by the health effects of obesity."
Groups backed by the beverage industry are less enthusiastic about the taxes.
The Chicago Coalition Against Beverage Taxes says that "the proposal will hurt businesses already struggling to hold on in this economy. The plan to increase beverages taxes unjustly threatens Chicago's 3,890 beverage distribution and manufacturing employees and the neighborhood stores and groceries that sell their products."
Americans for Tax Reform argues, "It is unlikely a soda tax will have any effect on mitigating obesity, as soda taxes do not necessarily decrease an individuals caloric intake."
Soda tax opponents further call the "tax hike regressive and discriminatory," adding that it will "eat up a larger percentage of a lower- and middle-income family's budget."
That issues is actually fairly complicated because, at this point, sales taxes on SSBs don't reach some of the poorest and most obesity-prone members of our society: those who rely on SNAP (or food stamps) for their beverage purchases.
For this reason, some, including UIC researchers, have proposed an excise tax that would be applied to the shelf price. This, researchers say, has proven much more effective at curbing purchases than a tax applied at the cash register.
Other legislators have argued that soda shouldn't be eligible for purchase with government nutrition funds to begin with.
Despite the strenuous opposition to Cardenas' resolution the city is still far from even considering a new tax hike on soda.
"Still, we see this as a good opportunity to start a conversation on the topic," Chriqui said.