A proposed statewide tax on sugary drinks might be the right idea — that is debatable — but it definitely is the wrong time. With restaurants struggling after a year of complete or partial shutdowns, and with small businesses such as markets facing the same difficulties, the Legislature must focus on assisting businesses rather than placing another roadblock along the path to recovery.
The proposal, Senate Bill 5371, would tax beverage distributors on sweetened drinks that have more than 20 calories in a 12-ounce serving. Presumably, some or all of the additional cost — 1.75 cents per fluid ounce — would then be passed along to consumers. Revenue from the tax would support public health programs and fund what supporters characterize as a health equity account for communities of color.
The proposal currently is in the Committee on Health & Long Term Care, chaired by Sen. Annette Cleveland, D-Vancouver. She has expressed reluctance to promote the bill, saying, “The beverage tax, in my mind, does place a tremendous burden on an industry that is continuing to reel from the impacts of COVID-19.”
On the other hand, there are benefits to such a tax. In 2018, Seattle imposed an identical local tax, and a study from the University of Illinois found that sales of sugary drinks declined 30.5 percent in subsequent months. In Portland, where no such tax existed, sales declined 10.5 percent.
Much information is available regarding the harmful effects of sugar-laden beverages. According to the Centers for Disease Control and Prevention: “Frequently drinking sugar-sweetened beverages is associated with weight gain/obesity, type 2 diabetes, heart disease, kidney diseases, nonalcoholic liver disease, tooth decay and cavities, and gout.”
That is costly for public health. But it leads to questions about government’s role in influencing social behavior, and it leads to questions about whether such influence is the proper avenue for boosting state tax revenue.
In addition, the tax would be particularly regressive. Studies have shown that low-income people drink more sugary beverages than those in other demographics.
In 2010, Washington voters approved Initiative 1107 to overturn a tax on soft drinks, bottled water, candy and some processed food. In 2018, following imposition of the Seattle tax, voters approved Initiative 1634 to prevent jurisdictions from adding local taxes on food and beverages.
The public has indicated no desire to tax sugary drinks, and the restaurant and beverage industries stand in strong opposition to Senate Bill 5371. Heidi Schultz, co-owner of Ridgefield-based Corwin Beverage Co. and president of the Washington Beverage Association, told The Columbian: “We know that this is going to cost jobs. . . . It’s really going to hurt small local businesses.”
In the long run, that premise can be disputed. As Kelly Brownell of Duke University told NBC News for a story about soda taxes: “The loss of jobs … that’s only true if the money somehow disappears from the community. Presumably, they’ll buy other things and the number of jobs would stay the same.”
But in the midst of a pandemic, the Legislature doesn’t have time to debate macroeconomics or consider the long-range impact. Lawmakers must focus on the short term as the state works to recover from a yearlong downturn.
A need to protect industries that have been hit particularly hard by the pandemic and to bolster small businesses means this is the wrong time for a statewide tax on sugary drinks.
