Was Seattle’s soda tax a bait and switch?

Jun 17, 2019, 4:31 PM
soda tax...
A sign indicating higher prices of sugary drinks due to Seattle's soda tax. (Dyer Oxley, MyNorthwest)
(Dyer Oxley, MyNorthwest)

When the Seattle City Council passed a sweetened beverage tax in 2017 — aka a soda tax — it was criticized as a highly regressive source of revenue.

“We know that soda is marketed more towards low-income communities and consumed more by low-income communities,” said Kevin Schofield, who runs the council watchdog website SCC Insight. “So if you tax it, you basically tax poor people more than you’re taxing rich people. And the city council justified this in their minds by saying, ‘We’re going to take the money and we’re going to invest it back into those same communities.'”

Are poor people mostly paying Seattle’s soda tax?

The city initially expected that the soda tax would bring in $15 million in its first year. The money was slated for programs in communities hardest hit by the tax, such as increased access to healthy food and health education programs. Research shows that sugary beverages are marketed toward and consumed more by low-income groups.

The city initially predicted that soda consumption would fall, and so would soda tax revenue, by up to 20 percent, Schofield notes. But the soda tax did not bring in $15 million. It exceeded that expectation and earned the city more than $22 million.

The extra $5.7 million should have gone back into the community and not into the 2019-20 general fund. That doesn’t appear to be the case. Those dollars will now be spent on homeless services.

Schofield argues that transparency has been a big issue. But another issue has arisen — the tax is not doing what it was intended for. The tax was meant to lessen consumption of sugary beverages, while using potential revenue to help communities that those beverages harmed.

Soda tax transparency

The issue of transparency stems from the council and mayor banking on the head tax to pay for increased spending on homeless services.

“At the 11th hour, the head tax failed as they were putting together the budget process … other city council members voted it down,” Schofield said about the first time a head tax was proposed on the council in 2017.

“What they didn’t do, when they rescinded the head tax, was figure out a replacement source of funds for the money for the homeless programs that the head tax was supposed to cover,” he said. “So they basically, left a hole in the budget by doing that for 2019 and beyond. The head tax was supposed to fix the long-term funding problem for those homeless programs and it didn’t. And then Mayor Durkan made this worse last summer because she added her own additional spending on homeless programs.”

To cover the deficit, Schofield argues, the Durkan administration swapped soda tax money for general fund dollars that had fewer restrictions on how they could be used, then used the freed-up general fund dollars to pay for homeless services. And the city could do it again.

“They haven’t come up with a replacement for what the head tax is supposed to be spent on before,” Schofield said. “And until they do that, they’re basically solving one problem but creating another one.”

Councilmember Mike O’Brien is attempting to resolve the issue with new legislation. It will create a separate fund for the soda tax, restricting it for its intended use. The issue came up last week in a budget committee meeting. Budget Director Ben Noble acknowledged the city has shirked its financial responsibilities by diverting extra soda tax money into the general fund to pay for homeless services. But Noble says the situation is not ideal because the city is not upholding the original intent of the tax.

“It is true that the proposals, and I’m not denying it as I sit here, were inconsistent with the council’s original intent,” Noble said at the committee meeting. “When that original intent was developed, you didn’t know this financial situation you were going to be in; that the head tax would not prove to be a viable funding alternative … and to be clear, I know a regressive tax source when I see it and we’re staring straight at one. This is not the way you want to be raising revenue.”

Councilmember Mike O’Brien also spoke at the meeting.

“Homelessness is a huge problem that we need to find funding to solve,” O’Brien said. “I don’t think we should tax homeless people to fund the solution. I think we should tax society broadly to solve it. Similarly, food banks and affordable housing that should not be funded on the backs of low-income people who over-consume Coke and Pepsi.”

“What I propose is that we get this legislation introduced and pass it and ask the mayor to present a budget that finds some solutions,” he said.

Community response

Tanika Thompson is a food access organizer from Got Green. She campaigned in her community in favor of the soda tax. Now she’s urging the council to use the money for what it was originally slated for.

“Did a lot of door knocking and we promised people in the community that this money was going to come back to them because they were going to be the ones most impacted,” Thompson said at last week’s committee meeting. “And I kind of feel like I let them down. That’s just because there was money taken away from them and put into the general fund. That was exactly what they were concerned about.”

“So I’m very disappointed that my accountability may not be intact,” she said. “They may not want to believe me the next time I go out and talk to them. So I think that there should be a specific fund to track the money and that it needs to be applied as stated in the ordinance.”

Schofield believes creating a separate fund for the soda tax will be hard for the council to achieve because it doesn’t have any other tax source right now to tap into. That means the city is dependent on that money to pay its bills. Another issue is that the tax, which was intended to get people to stop drinking soda, isn’t working.

“There’s a judgment day coming on this soda tax,” Schofield said. “… It was a tax with a specific policy objective around decreasing consumption of soda and sweetened beverages to reduce the public health negative impact of high consumption of those beverages. And so far, there’s no evidence that it’s actually achieving that goal.”

According to Schofield, researchers at the University of Washington are being paid by the city to study whether people are drinking less soda because of the tax. Their latest findings are due in September. Until then, the tax is still bringing in more money.

Local News

SDOT Light Rail Ped...
KIRO 7 News Staff

Pedestrian struck, injured by Link light rail train in south Seattle

A pedestrian was struck and injured by a Link light rail train Wednesday afternoon in south Seattle.
1 day ago
(Photo courtesy of King County)...
Frank Sumrall

King County executive initiates plan to conserve and save the region’s wilderness

King County executive announced a plan to protect 65,000 acres of forests, farmland, and greenspace, raising property taxes in the process.
1 day ago
MyNorthwest Staff

Drought may impact most of Pacific Northwest this summer

Drought is expected to impact much of the Pacific Northwest this summer, impacting areas throughout eastern Washington, southern Oregon and southern Idaho.
1 day ago
(Photo by David Ryder/Getty Images)...
Frank Sumrall

SPD report discovers 80% of 911 calls were for non-criminal events

After reviewing more than 1.2 million 911 calls from 2017 to 2019, the Seattle Police Department (SPD) found 79.7% of calls were for non-criminal events.
1 day ago
KIRO 7 News Staff

9-year-old boy shot by younger brother in Federal Way

A 9-year-old boy was airlifted to Harborview Medical Center after being shot by his younger brother in Federal Way.
1 day ago
The US government will fly in baby formula on commercial planes contracted by the military in an ai...
Heather Bosch

A guide to locate baby formula from Washington’s Department of Health

Washington's Department of Health has put together a list of resources to help find nutritious food to feed your newborn.
1 day ago

Sponsored Articles


Anacortes – A Must Visit Summertime Destination

While Anacortes is certainly on the way to the San Juan Islands (SJI), it is not just a destination to get to the ferry… Anacortes is a destination in and of itself!

Ready for your 2022 Alaskan Adventure with Celebrity Cruises?

Celebrity Cruises SPONSORED — A round-trip Alaska cruise from Seattle is an amazing treat for you and a loved one. Not only are you able to see and explore some of the most incredible and visually appealing natural sights on the planet, but you’re also able to relax and re-energize while aboard a luxury cruise […]

Compassion International Is Determined to ‘Fill’ a Unique Type of Football ‘Stadium’

Compassion International SPONSORED — During this fall’s football season—and as the pandemic continues to impact the entire globe—one organization has been urging caring individuals to help it “fill” a unique type of “stadium” in order to make a lasting difference in the lives of many. Compassion International’s distinctive Fill the Stadium (FtS, fillthestadium.com) initiative provides […]

What are the Strongest, Greenest, Best Windows?

Lake Washington Windows & Doors SPONSORED — Fiberglass windows are an excellent choice for window replacement due to their fundamental strength and durability. There is no other type of window that lasts as long as fiberglass; so why go with anything else? Fiberglass windows are 8x stronger than vinyl, lower maintenance than wood, more thermally […]

COVID Vaccine is a Game-Changer for Keeping our Kids Healthy

Snohomish Health District SPONSORED — Cheers to the parents and guardians who keep their kids safe and healthy. The dad who cooks a meal with something green in it, even though he’s tired and drive-thru burgers were tempting. The mom who calms down the little one who loudly and resolutely does NOT want to brush […]
Experience Anacortes

Coastal Christmas Celebration Week in Anacortes

With minimal travel time required and every activity under the sun, Anacortes is the perfect vacation spot for all ages.
Was Seattle’s soda tax a bait and switch?