City Hall

City Council Approves Soda Tax

Mayor Ed Murray will be signing the ordinance into law on Tuesday.

By Hayat Norimine June 5, 2017

Supermarket soda tax pixabay rethyp

Starting next year, Seattle consumers will pay a tax on soda and other sugary beverages—estimated to raise $14.8 million in 2018. In a 7-1 vote, the City Council approved the legislation to tax sugary drinks 1.75 cents per ounce as a way to reduce consumption and improve public health, in essence keeping the version of the bill Tim Burgess proposed last week with a few amendments. (Kshama Sawant was absent.)

Public health advocates applauded the decision. But the tax also sparked a lot of opposition from businesses and labor, as well as some community members who opposed the bill for taxing low-income households and people of color disproportionately.

Notably, the bill leaves diet soda out despite recommendations from the city's racial equity toolkit, which had prompted mayor Ed Murray to include it in his proposal originally sent to the council. In a letter to the mayor and council members Monday, the Seattle Human Rights Commission urged officials to again include diet beverages and said it was a "blatant disregard" for the racial equity analysis that was conducted. 

"We urge the City Council and mayor to again include artificially sweetened beverages in the impending sweetened beverage tax to reduce the relative burdens upon socioeconomically disadvantaged Seattle residents," the letter stated. "We also urge the City Council and mayor to avoid disregarding RSJI legislative analyses in the future."

But council member Tim Burgess said the ultimate goal was to reduce as much consumption as possible, and studies showed that meant giving people an alternative (like diet beverages).

“If you want to talk about regressivity and disproportionality, the harm being done to those populations by the sugary drinks is profound,” Burgess said in an earlier committee meeting.  

Businesses and labor say the tax will lead to lost jobs and close down small stores, unfairly targets an industry, didn't provide enough public input, and was done as a rush job. Sweetened beverage distributors earning less than $2 million a year are exempt, while distributors with annual incomes between $2 million and $5 million will be taxed at a reduced 1 cent per ounce. 

“We are deeply disappointed that City Council has decided to hastily approve a tax that will disproportionately impact our small businesses, allowing for little public input or feedback. Council members rushed forward despite hearing from a number of local businesses about how this tax would personally impact their livelihoods,” Seattle Metro Chamber president and CEO Maud Daudon said in a released statement. “This is yet another barrier that will make operating a small business more complicated in Seattle, especially for our local beverage manufacturers, restaurants, and retail stores.”

Council member Lisa Herbold was the lone no vote. She tried last week, in committee, to pass amendments that would've lowered the tax to 1 cent per ounce and broaden it to again include diet beverages, which statistics show more white, affluent people drink. When that failed (with only support from Sawant and Mike O'Brien), she tried to pass another amendment at the Monday council meeting, this time lowering the tax to 1.25 cents per ounce and including sugary coffee instead (with only Rob Johnson's support). 

"I specifically offered amendments that were designed to preserve the goals that I shared with my colleagues," like a revenue target of $15 million a year, including only drinks that had proven negative health impacts, and aiming for a 32 percent reduction in consumption of sugary drinks, Herbold said. "I'm really disappointed that my efforts were not successful in convincing my colleagues."

A few last-minute amendments did make the cut. O'Brien's amendment prioritized funding to expanding access to healthy food and closing the food security gap, and Debora Juarez proposed explicitly including food banks and meal programs in the mix. Another O'Brien addition required that the annual evaluation of the tax's effects be done in collaboration with the 11-member community advisory board. And Burgess's amendment clarified the tax rate for products with multiple concentrates. 

Bruce Harrell also proposed a failed amendment to exempt handcrafted beverages, like bubble tea, which only garnered support from Burgess. 

Leaders from nonprofits like Got Green, El Centro de la Raza, and Save the Children Action Network supported the tax—as well as former New York City mayor Michael Bloomberg.

"Today Seattle joined the growing list of cities that are attacking obesity by taxing soda," Bloomberg said in a released statement Monday. "That’s good news for Seattle's health, and it helps build regional and national momentum for a policy whose time has come. Two years ago, no U.S. city or county had adopted a tax on sugary drinks. Now, eight have—and as it continues to prove successful, it will continue to spread." 

Updated June 6, 2017, at 9:48am: This post clarifies that distributors, not all businesses, will be taxed.

Updated June 6, 2017, at 4:20pm: This post includes the Human Rights Commission letter sent to council members Monday and more quotes from Burgess and Bloomberg. 

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