Jobs, Revenue Rise after Berkeley Soda Tax

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Posted: Monday, May 15, 2017 8:58 pm

OAKLAND, Calif. -- A new analysis of city of Berkeley economic data, released by a Public Health Institute researcher, found that a year and a half after passage of the nation’s first large soda tax, food sector sales tax revenue rose by 15 percent in the city, and 469 new food sector jobs were created, an increase of 7.2 percent.

This analysis of city sales tax revenue and employment data comes on the heels of an April 2017 PHI evaluation study that showed sugar sweetened beverage purchases declined by 9.6 percent in Berkeley as a result of the one cent per ounce tax and grocery bills did not rise. Together, the two studies help paint a fuller picture of the economic and behavioral impact of the policy.

"The soda tax is working, from every angle," said Lynn Silver, MD, MPH, of the Public Health Institute, who led the analysis. "People are buying less soda and more water, while Berkeley food businesses and jobs are thriving. It’s exactly what you would want to see in a successful policy."

In Berkeley and other cities with soda tax proposals on the table, the American Beverage Association has alleged that soda taxes would hurt business or cost jobs. This analysis, which compared pre-tax data through to the most recent available data for the food sector, found that not only was the food business not hurting, but it grew faster than other sectors.

"Contrary to industry messages, this new data suggests that the soda tax did not harm the Berkeley economy and more people are gainfully employed in our food sector," said Berkeley City Councilmember Linda Maio.

The tax became effective March 1, 2015, and Berkeley’s sales tax revenue continued to increase after the tax. The greatest rise was precisely in the food products sector where sales tax revenue went up 15 percent between July 2014 and December 2016.

Similarly, employment across food sector establishments continued to rise overall by 7.2 percent between April 2014 and June 2016, with 469 jobs added. Employment in limited service restaurants rose by 18.9 percent, full service restaurants by 5.6 percent, and in supermarkets and grocery stores by 2.6 percent, the three largest employer types in the food sector.

SOURCE: Public Health Institute

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