Soda tax raises $116,000 of revenue in first month

Councilman Laurie Capitelli speaking at a press conference held in Berkeley Monday to report on how the soda tax was working. Photo: Melati Indah Citrawireja

Councilman Laurie Capitelli spoke at a press conference Monday to report on how the soda tax was working. Photo: Melati Indah Citrawireja

Berkeley’s soda tax has generated $116,000 in revenue in the first month of its operation, according to Councilman Laurie Capitelli, who announced the figure at a press conference May 18 in front of Old City Hall.

The money was sourced from 36 different sugar-sweetened beverage distributors, and is on target to raise $1.2 million in its first year, according to Capitelli.

Proceeds from the tax on sugar-sweetened beverages, which was passed overwhelmingly by Berkeley voters with 75% approval in November, go into Berkeley’s General Fund. They will be allocated by a newly appointed panel of experts, operating with input from the community. The panel will hold its first meeting tomorrow, Tuesday May 19, at 6 p.m.

Read more on Berkeley’s historic soda tax.

“We’re well on our way to a smooth implementation,” Capitelli said at the press conference. “We wanted to get it right.” 

Joy Moore. Photo: Melati Indah Citrawireja

Community health activist Joy Moore congratulated the city on being at the “cutting edge” of policies that promote healthy living. Photo: Melati Indah Citrawireja

The soda tax, officially called Measure D, implements a 1-cent-per-ounce tax on drinks with added sweeteners such as sodas, energy drinks and coffee drinks.

A similar tax was on the November ballot in San Francisco, but failed to pass — Berkeley’s version is currently the only tax successfully passed in the nation. A record number of campaign donations were also made during the months leading up to the election: Big Soda contributed almost $2.5 million in its attempt to defeat the tax, while supporters of Measure D spent just under $1 million.

The soda tax victory was widely heralded as a watershed moment for health activists and seen as sounding the alarm for the soft-drinks beverage industry.

Several Berkeley council members who attended Monday’s press conference said they were satisfied with the initial soda tax revenue numbers.

“This is a landmark day when we get to project the success of the tax,” Councilman Max Anderson told the crowd, adding that the result so far was a “small step in the right direction of establishing a [community] public health foundation.”

Councilwoman Lindo Maio echoed Anderson: “We believed that we would succeed, and we delivered. And most importantly, we delivered for the children of Berkeley,” she said.

The soda tax’s potential to benefit the city’s most at-risk demographics, including children and communities of color, was recognized by several of the speakers Monday. Joy Moore, community health activist and co-founder of food-justice program Farm Fresh Choice, congratulated the city on being at the “cutting edge” of policies that promote healthy living and disease prevention among at-risk communities.

Moore also pointed to the invaluable work done by other city entities over the years to cultivate a culture of knowledge surrounding disease prevention and community health accountability. “This soda tax is a confirmation of over 10 years of work — the reason the soda tax passed in the first place is because we’ve been educating these communities,” she said.

On the same subject, Anderson said: “We’re hoping that the panel sees the importance of focusing funding on communities of color and other especially affected communities around the city.”

Xavier Morales. Photo: Melati Indah Citrawireja

Xavier Morales. Photo: Melati Indah Citrawireja

All were in agreement that revenue from the tax should go toward helping people with diabetes, many of whom are from African-American and Hispanic communities. “We are 10 years beyond needing to do something,” said Xavier Morales, executive director of the Latino Coalition for a Healthy California.

The Berkeley City Council recently voted in favor of advancing the panel of experts $500,000 so it can begin to allocate the tax revenue. That loan is set to be repaid by money from the tax. Panelist and public health advocate Holly Scheider explained that half of the money could go to the Berkeley Unified School District, possibly for the cooking and gardening program, while the other half will be used for other recommendations.

“We always keep our eyes on the ball. And that’s the health of our kids,” Maio added.

Scheider stressed that community input into the allocation of revenue from the soda tax is an important part of the process. “We ran this as a community-based campaign, and we will continue this,” she said.

The first panel recommendations will be completed by Oct. 1, according to Scheider. “In Berkeley, we’ve started. Now we’re doing the hard part,” she said.

Several speakers responded to questions from Berkeleyside surrounding previously reported frustrations with the city from local soda distributors, who said Berkeley was doing a poor job of relaying information on how to comply with the soda tax. “I would urge them to call me,” Capitelli said.

He explained that city has compiled a one-page FAQ sheet with instructions and information regarding the tax. He remains satisfied after he personally called the city’s information number pretending to be a distributor. “All of the information is out there,” he said.

Morales agreed with Capitelli that the city had done a good job in preparing local distributors and businesses for the changes associated with the soda tax: “This is something anyone can do. The city is doing a great job.”

Councilman Anderson added that he had personally met with distributors, and didn’t hear any notable negative feedback: “This is the usual route — people get more comfortable with the process.”

Not everyone was feeling positive about the report on the soda tax’s first month of operation, however.

A tweet posted a couple of hours after the 1:30 p.m. press conference by Californians for Food & Beverage Choice — which represents the American Beverage Association and fought against last fall’s soda tax proposals in Berkeley and San Francisco — highlighted what it said was the irony of a tax that generates revenue from the very source it is fighting to obliterate:

Screen Shot 2015-05-18 at 5.58.51 PM

The tweet was followed by another in a similar vein referencing San Francisco Supervisor Scott Weiner’s tweet congratulating the city of Berkeley on its $116,000 tax revenue collection:

Screen Shot 2015-05-18 at 5.59.17 PM

Roger Salazar, the organization’s spokesman, was present at Monday’s announcement and spoke to Berkeleyside by phone after the press conference.

While not the author of the tweets himself, Salazar said he agreed with the sentiment that the soda tax does little to help public health. “What is still very clear to us is that this is still a very poor public policy,” he said. “If the goal was to make it more difficult and onerous for the businesses in Berkeley to do business in the city, then they’ve clearly succeeded.”

Salazar said that, from speaking to retailers, grocers and restaurant citywide, he believes the tax measure is “still extremely confusing — they’re having a tremendous amount of trouble discerning how to apply it.” When they ask for clarification from the city, Salazar said, the city “responds by saying it’s as clear as it’s going to get. And for many of the businesses, it’s as clear as mud.”

Salazar said that, while he agrees with the Berkeley community that health issues surrounding sweetened beverages are “complex problems that need a comprehensive solution,” he said he believes that targeting one industry and “punishing people for the food and beverage that they make is not the right way to go about it.”

Some members of the pro-tax movement who attended Monday’s gathering said they are envisioning a future where at least some sweetened beverages don’t exist at all.

“We don’t want soda in our communities,” said Capitelli.

A record $3.6 million spent in Berkeley campaigns (10.03.14)
Beverage companies donate $800,000 to fight soda tax (09.22.14)
Campaign donations reach record levels in Berkeley
Bloomberg donates $85k to support Berkeley soda tax (10.16.14)
Outside money, solar funds in Assembly race (10.22.14)
Michael Bloomberg has now spent $370k on Measure D (10.27.14)
Op-ed: The Berkeley tax may have passed, but the campaign has not ended for Big Soda (03.19.15)
Soda distributors frustrated at city of Berkeley’s lack of guidance on soda tax (03.02.15)
Around $3.4m spent on Berkeley soda tax campaign (02.05.2015)
Berkeley seeks experts for ‘soda tax’ advisory panel (01.06.15)
Why Berkeley passed a soda tax while other cities failed (11.05.14)

Emily Dugdale, a graduate of Williams College in Williamstown, Massachusetts, is a summer intern at Berkeleyside.

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  • Yeah

    We would like soda distributors to process scarce drinking water into deadly pathogens, load it into gas guzzling delivery trucks, and drive it across the state. Once it is stocked and un-greenly refrigerated in Berkeley, we’d like it sold but not consumed so that we can collect the tax revenue without jeopardizing anyone’s health. We’d also like the cans to be placed where roving bandits can steal them from the recycling bins, defeating the purpose of driving more fuel intensive vehicles all over town each week.

    Yeah, it’s pretty dumb.

  • .

    The children who participate in Cooking & Gardening at King Middle School are neither old nor very much in the at risk populations. Further, their parents are all foodies to varying degree, haunting Monterey Market, Berkeley Bowl, Natural Grocery and various farmers’ markets.

    If you said that the money would be used to target the actual at risk population, I’d say OK. But using it to fund a feel good gardening class for affluent kids whose parents are way out on the foodie curve is a misappropriation of funds, especially given the Diabetes Terror that the measure proponents ran on.

    Having said that, the measure passed into the general fund, so the whole “panel of activist experts” is just political kabuki. The voters didn’t insist on earmarking the $$, so the council can spend it on hookers and blow and that’s that.

  • Jth

    Almost all of those students and a fair number of staff are Berkeley residents.

  • Dumy Sstwo

    Appreciated. Quite new, yes, but this is a national story. Readers around the country/world are going to be jumping into the series at various points. I scanned the articles “Related” links at the bottom, and saw no headline that looked relevant to my questions. If such reporting has been done by Bside, I expect an editor to referenc it, and provide embedded links within this article’s body.

  • Dumy Sstwo

    You’re kidding, right? You don’t realize that business taxes are ultimately paid by the consumer!!!? That’s like saying renters don’t pay the property owner’s property taxes. Taxes are costs of doing business, and, therefore, are built into the price of the end product or service.

    This is what I am taking about, readers. There are readers, here, who need a responsible editor to make sure the “rest of the story” is told, every time, so that we ignoramuses know what is TRULY going on.

  • Dumy Sstwo

    Hey, at least that got reported on, and we’re aware of it, as a result, right? I hope it was fair and objective reporting, for our sakes.

  • Dumy Sstwo

    Thank you, Tim. Apologies in advance if I missed it in a previous article that this particular article doesn’t point me to, but it would have been educational had Bside’s editor arranged for the inclusion of interview results regarding behavioral changes, if any, of you and tens of other consumers like us.

  • Dumy Sstwo

    Don’t let the confused make you think it’s confused. The article quite clearly states what you interpret it to state–but you knew that, I think.

  • Dumy Sstwo

    All facts, but relevant? The commenter is reacting to your decision to publish the guy’s face, as opposed to a different image that might better convey the material of the story–or was this primarily a political piece, from your point of view??

  • Dumy Sstwo

    But weren’t a lot of people involved? Why his image? Can I reverse your argument, and ask you to imagine publishing his face with EVERY story that somehow involves him? The story isn’t ABOUT him, is it? You do run a business, however, and I’m not going to fault you for what sells.

  • Tim Ereneta

    I thought it was a fee tacked onto distribution of soda.

  • guest

    dear . you do not know who goes to King.
    I’ll bet you have never been there.

    you have never seen those kids swarming over to MLK to go to the convenience store after school

    you logic is straight out of a bull’s :