ICYMI: Philly’s Soda Tax Will Bring Sweet Health Rewards: Harvard Study
PHILADELPHIA – In case you missed it, Philadelphia Business Journal published an article highlighting that a study conducted by Harvard University found that the Philadelphia Beverage Tax could potentially bring the City millions of dollars via healthcare savings. The full text of the article can be viewed below.
Philly’s soda tax will bring sweet health rewards: Harvard study
Philadelphia Business Journal // Gina Hall
Philadelphia’s new soda tax will go into effect in January – as long as a lawsuit against the city doesn’t stop it– and once it’s legal, the new tax could bring about potentially millions of dollars in healthcare savings.
The 1.5 cents per ounce tax, part of the Kenney Administration’s plan to raise millions of dollars in funding for Philly’s public schools, is also expected to save Philadelphians $200 million in health care costs over a 10-year period, according to a new study released Thursday by the Harvard University’s T.H. Chan School of Public Health.
Philadelphia officials also estimated the tax would save $200 million in health care costs and 700 lives in
the treatment of diabetes over the next decade.
The Harvard study – citing multiple data sources including the U.S. Census, the National Survey of Children’s Health and the National Health and Nutrition Examination Survey – added that 2,280 cases of diabetes would be prevented within one year of when the tax reaches its full effect. It also concluded that 36,000 cases of obesity would be prevented within the first 10 years after implementation.
The study was released just ahead of the Nov. 8 vote on the measures in three California cities — San Francisco, Oakland and Albany. The proposals would tax soda at a rate of 1 cent per ounce.
Soda tax initiatives under consideration in California would result in a 20 percent drop in soda consumption, the Harvard study said. The resulting reduction in obesity and diabetes would slash healthcare costs in the San Francisco Bay Area by $54.9 million over 10 years, the study’s authors said.
If the ballot initiatives pass, the number of diabetes cases in the three California cities would drop an estimated 4 percent by 2018. The study also projected that 6,000 fewer people in the area would be obese by the end of 2025.
The city of Boulder, Colorado, has a similar soda tax on the upcoming ballot. Researchers found that if Boulder passes its tax of 2 cents per ounce, the incidence of diabetes would drop by 10 percent in the city, while healthcare costs would decrease by $6.4 million during the next decade.
“Our analysis looks beyond revenue and finds that this excise tax on sugary drinks can generate significant prevention of new cases of obesity, diabetes, improved quality adjusted life years and healthcare cost savings,” Dr. Steven Gortmaker, a professor of health sociology and lead investigator on the project, said in a press release.
The city of Berkeley, California, was the first in the country to pass a soda tax, back in 2014, and the community is already seeing results. Consumption of sugary drinks in some neighborhoods near Berkeley is down by 20 percent, NPR reported in August.
The full effects of the Berkeley tax remain in dispute, but the website Berkeley side pointed to research indicating that after that city’s tax went into effect, retailers did not raise prices on non-beverage items in order to compensate, undercutting a key anti-tax argument. Separately, Berkeleyside reported on troubles some distributors had trying to comply with the new law, which laid out a series of exemptions to the tax that smaller distributors found burdensome.
It will be interesting to see the impact the soda tax has on Philadelphia since, as many acknowledged from the moment Mayor Jim Kenney first resurfaced the idea, Philly differs greatly from the Northern California city, which has a population of just over 100,000 people.
Of course, beverage companies are fighting back. The American Beverage Association, which represents the likes of Coca-Cola and PepsiCo., spent more than $1.5 million on a campaign to fight soda taxes.
“This is a political maneuver financed by out of town special interest groups to push their pro-tax agenda 12 days before an election by looking at only the four cities with ballot initiatives,” Laura Kane, a spokesperson for the American Beverage Association, said,
“We encourage the Bay Area and Boulder to look at the facts — taxes on common grocery items don’t make people healthier, just poorer.”
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