Sticker shock over Seattle's new sugary drink tax

People are feeling sticker shock over Seattle’s sugary drink tax.

You might’ve seen a picture circulating on social media that shows a more than $10 tax on a $15.99 case of Gatorade at Costco. On Friday, shoppers were taking their own pictures, stunned by the new prices.

Advocates of the tax held a press conference on Friday, to explain how the city plans to use the $15 million expected to be raised from the tax in 2018.

One Costco shopper loaded a case of Coca-Cola into her cart, not noticing the new price until KIRO7 pointed it out.

“That much!” said Vilma Villagran, who was buying the case for her family.

The regular case of Coke is now $7.35 more expensive than the Diet Coke or Coke Zero.

“I knew it was going to be high, but not that crazy high,” Villagran said.

Other shoppers closely read the sign, which explains that as of Jan. 1, Seattle shoppers are paying 1.75 cents per ounce on sugar-sweetened beverages – something shoppers are really noticing when buying in bulk.

The tax has many people opting for the diet soda.

Supporters of the tax said that’s the point – not necessarily to switch to diet soda, but getting consumers to go for healthier options.

“I’m just very excited,” said Jim Krieger, who is on the committee for Seattle Healthy Kids Coalition and is the executive director of Health Food America.

"The hope is consumption of the unhealthy product -- which causes heart disease, diabetes -- will go down, the sugary drinks to go down, and we fully expect that to be the case," Krieger said. 
The other purpose is tax dollars.

The $15 million Seattle expects to raise from the tax will go toward programs that will help people who are in need have better access to fresh fruits and vegetables. The money will also fund education programs. See the full breakdown provided at the end of the article.

But back at Costco, signs above each taxed sugary drink remind shoppers you can leave the city and buy the product without paying the tax.

And that’s what Villagran plans to do. “It’ll have to be Tukwila, the closest to me,” she said.

KIRO7 has talked with worried business owners, but City Council members say they’ve looked at data from other cities that have this tax.

“Do you have any concerns at all about this hurting local businesses and driving shoppers out of Seattle?” KIRO7’s Deedee Sun asked City Council members at the press conference on Friday.

“We did not see any data that really shored up the argument that this hurts local businesses,” said Lorena González, a Seattle City Council member.

“There’s not a lot of cross-border shopping. People realize it’s not worth my while,” Krieger said. One of his roles with the Seattle Healthy Kids Coalition is to follow the impact of the sugary drink taxes in other cities.

Most of the 2018 tax  money has already been allocated to programs and one-time administrative costs. The city said that, for the first year, there are higher administrative costs to implement the tax, as well as to set up and expand programs.

Right now, there’s still about $3 million of the $15 million to be allocated for 2018.

Eleven people have been selected to be part of a special coalition that will make recommendations to City Council on which organizations will get the money. The coalition is expected to make its recommendations by April, and there will be an opportunity for public input before the City Council votes.

Breakdown of sugary beverage tax allocations, as provided by Seattle Healthy Kids Coalition: 

Programs that the City Council has approved funding ($5,658,494) for in 2018
already include:

• Fresh Bucks, Food Action Plan ($2,404,359)
• 13th Year Promise Scholarship ($1,381,885)
• Innovation High School, Summer Learning, Summer Melt ($1,004,500)
• Our Best ($189,000)
• Parent-Child Home Program ($525,000)
• Food Banks ($153,750)

Proposed investments ($4,120,639) awaiting review by CAB in Spring 2018:

• Farm to Table
• Fresh Bucks to Go
• Food Banks
• Out-of-School Time Nutrition Program
• Early learning programs

In addition to these investments, revenue from the new sugary drinks tax will also support evaluation work ($500,000) to track the tax’s effectiveness and impacts, job retraining support ($500,000) for those employed within the local distribution network for the beverage industry and general administrative support ($1,082,000) in city government.

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