New York State’s Tax on Sugar-Sweetened Beverages Goes Down the Drain: Lessons for Nutrition Advocates

The soda tax came and went this year in New York. Here, CHW examines the campaign to pass a sugar-sweetened beverage tax, the likely factors that led to its failure, and also offers important lessons for future efforts.

On December 15, 2008, media sources revealed elements of New York State Governor Paterson’s proposal for the 2009-2010 state budget. Among the many new fees and fines that the Governor proposed in order to close the estimated $15 billion deficit was an 18% sales tax on sugar-sweetened beverages. With the new fiscal year less than four months away, the announcement of this tax spurred advocates and opponents to quickly mobilize constituents, engage the media, and lobby state legislators. Less than three months later, on March 11, 2009, state legislative leaders announced that the sugar-sweetened beverage tax would not be included in the final budget. This report examines the campaign to pass a New York State sugar-sweetened beverage tax and the likely factors that led to its failure. This analysis also offers several important lessons for future efforts in public health advocacy designed to make unhealthy food less available.

A Dual Crisis in New York State

At the end of 2008, two major problems were occurring in New York State. The first was a growing obesity epidemic. In the past decade, adult obesity in New York State has nearly doubled, and currently about two-thirds are overweight or obese.1 The weights of children and adolescents have also increased during this time; the most recent data show that one-third of New York State Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) participants and more than one-quarter of state high school students are overweight or obese.2,3 Black, Latino, and low-income New Yorkers experience disproportionately high rates of obesity, diabetes, and other diet-related diseases, increasing the already large health inequalities among these groups. In all, obesity-related illnesses are estimated to cost the state more than $6 billion annually.4

With this steady rise in obesity, per capita consumption of sugar-sweetened beverages has also increased during this time. Although we cannot say definitively that drinking soft drinks and other “liquid candy” causes obesity, studies consistently show that the more soda we drink, the more calories we consume and the higher our body mass index (BMI),5 a measure of obesity. With such a growing and significant contributor of calories for many Americans, nutritionists and public health professionals have stressed the importance of reducing sugar-sweetened beverage consumption to prevent and decrease obesity and other diet-related health conditions.

By the end of 2008, New York State was facing a second problem—a large and rapidly growing state budget deficit. In the midst of a global economic crisis, New York was experiencing a triple loss: declining personal income tax revenue from lost jobs and bonuses, decreasing corporate income tax revenue from disappearing business profits, and waning sales tax revenue as shoppers limited their spending. Estimated at $6.4 billion in July 2008, the budget deficit more than doubled to $15 billion by the end of the year.6,7 As a result, the state needed to rein in spending and find revenue alternatives through new fees, fines, and taxes.

In order to tackle these two issues simultaneously, Governor Patterson introduced what was quickly nicknamed by the media as the ‘obesity tax.’ The two goals of the proposed 18% sales tax on sugar-sweetened beverages were to raise an estimated $404 million in the first year, while at the same time creating a cost differential that was expected to convince shoppers to instead buy the cheaper low, or no-calorie alternatives, thus helping to curb weight gain and obesity.

The Campaign to Pass a New York State Tax on Sugar-Sweetened Beverages

During the three months after the tax was announced, state and local children’s advocacy groups and public health organizations—particularly the American Academy of Pediatrics, Citizens’ Committee for Children, New York Academy of Medicine, New York City Department of Health and Mental Hygiene, New York State Department of Health, New York State Healthy Eating and Physical Activity Alliance, New York State Public Health Association, and the Public Health Association of New York City—targeted state legislators by employing the following strategies:

  1. Media advocacy
      via press releases, letters to the editor, and op-eds

    Constituent mobilization

      through the use of e-mail action alerts, in-person and online education, and a memo of support

    Direct lobbying

      by providing testimony at budget hearings, mailing information packets, and visiting key legislators

However, the campaign faced multiple barriers, including a politically weak and wavering Governor and a growing economic crisis that did not provide a receptive public climate for tax increases. In addition, the campaign had a strong and united group of opponents who were also targeting state legislators. A coalition called New Yorkers Against Unfair Taxes emerged, including more than 80 national, state, and local business and citizen groups, most notably the Business Council of New York State; National Restaurant Association; New York State Restaurant Association; Grocery Manufacturers Association; Bodega Association of the United States; Coca-Cola Bottling Company of Buffalo, Inc.; and Pepsi Cola Bottling Newburgh; among many others.

Although not part of this coalition, another vocal opponent was the American Beverage Association, the trade association representing companies that manufacture and distribute non-alcoholic beverages in the United States—the very products that would be taxed under the Governor’s proposal. Between 2006-2008, these groups collectively spent more than $4 million to gain political influence in New York State via campaign contributions and lobbying.8

Despite the campaign’s use of multiple strategies, Governor Patterson—in agreement with legislative leaders after several days of closed-door meetings—announced on March 11, 2009 that the sugar-sweetened beverage tax would not be included in the final budget. Advocates attribute the failed policy to two key factors. The first was the Governor’s public statement of doubt at a town hall meeting. The New York Times quoted him as saying, “The tax on soda was really a public policy argument. In other words, it’s not something that we necessarily thought we would get. But we just wanted the population to know some issues about childhood obesity.”9 Once this hit the newsstands and airways, advocates felt that the sugar-sweetened beverage tax was dead. Secondly, campaign members believe that the tax was doomed from the start because of how it was introduced by the Governor’s office. Several advocates noted that rather than singling out the sugar-sweetened beverage tax and focusing on its public health benefits, it was instead lumped in with a list of other fees referred to by opponents, the media, and even some legislative leaders as regressive or nuisance taxes.

Even though the campaign was not successful in achieving the tax increase on sugar-sweetened beverages, advocates believe that they were effective in constituent mobilization. Still, more could have been done to engage those outside of the public health and child advocacy groups. Comparatively, New Yorkers Against Unfair Taxes created a website, blog, cell phone texting service, online petition, and Facebook profile that together spread their opposing message to thousands of people. Advocates made no equivalent use of new media technologies or social networking strategies. Most legislators heard more from opponents than supporters.

One organization, Citizens Committee for Children (CCC), a multi-issue child advocacy group, initially proposed an excise tax on sugar-sweetened beverages rather than a sales tax. They made the case that an excise tax would be levied on bottlers and distributors rather than consumers and would result in a higher price for large volumes, thus serving as a more effective deterrent for high consumption. The excise tax would also have generated significantly more revenues for the state and CCC proposed that a portion of these revenues be dedicated to nutrition education or obesity prevention. Statewide polling data showed support for this approach.10 The Governor rejected the idea of an excise tax, in part because it would take additional months to establish a system for collecting the revenues, whereas sales tax revenues could be collected immediately. When the Governor’s office rejected this approach, CCC backed the sales tax proposal but some advocates continued to believe that the excise tax strategy was a more effective public health and economic approach.

Finally, many nutrition advocates had mixed feelings about the sugar-sweetened beverage tax. Supporters acknowledged that it would financially burden the poor most, although they argued it would also benefit them most by helping to reduce disparities in obesity rates. Opponents of the soda tax claimed that making healthy food more available in poor communities was a moral and public health imperative. Some supporters replied that in the absence of reducing the availability of unhealthy food, it would be difficult to lower obesity rates. One compromise proposed by advocates is to use revenues from a sugar-sweetened beverage tax to subsidize the purchase of healthy foods, thus counteracting any regressive effects the tax might have.11

Lessons for Round Two

Even if public health campaigns are not able to fulfill their main policy goals, they can still successfully mobilize constituencies and contribute to public debate. One of the key lessons for advocates is the need for a strong policy introduction and legislative champion. In this case, the tax may have been more successful if it was introduced on its own, rather than with other unpopular fees and fines, though this may not be true for all policy proposals. Additionally, policies need to be framed with messages that invoke values such as social justice, rather than getting bogged down with the details. By using value-based messages from the very beginning, advocates may be more likely to create and maintain a supportive policy framework and overcome statements made by opponents and the media. And as indicated by several advocates, the sugar-sweetened beverage tax was effectively viewed as dead after the Governor publicly stated that he didn’t think it would be approved. With a stronger legislative champion willing to stand by the tax until the end, the outcome may have been different.

This campaign also illustrates the importance of context in affecting outcomes. Advocates must understand the historical, social, and political environments in order to identify windows of opportunity, frame messages appropriately, and utilize effective strategies. In this case, imposing a new tax in the midst of an economic crisis was bound to be unpopular for many residents. The campaign tried to define the issue more broadly by linking the tax to improved health and lower healthcare costs, though this still did not involve enough stakeholders and diverse groups to pass the tax. Perhaps early messages that countered the campaign’s opponents, such as disclosing the beverage industry’s behind-the-scenes lobbying tactics and targeted marketing strategies, may have helped change the public discourse surrounding the tax.

In the same vein, advocates of public health measures probably fare better if they are united in their support for a proposal and if they have resolved moral or other ambiguities prior to public debate. The lack of prior internal dialogue among advocates on the value and limits of taxes on unhealthy food and the short interval available for mobilization may have handicapped their ability to bring clear and consistent messages into the policy arena.

Finally, it is important to remember that it may take two or more attempts to pass legislation, especially when there is little precedent for the policy. Not knowing in advance opponents’ strategies and messages, this first attempt at a sugar-sweetened beverage tax in New York State was actually a valuable learning experience. Campaigns should evaluate their efforts and those of their opponents in order to increase the likelihood of future success. Measures of outputs and outcomes should include surveys of constituents, policymakers, and the media.

 

References

1 Centers for Disease Control and Prevention. BRFSS Prevalence and Trends Data: New York, 2007. Available at: http://apps.nccd.cdc.gov/BRFSS/display.asp?cat=OB&yr=2007&qkey=4409&state=NY. Accessed March 20, 2009.

2 Edmunds LS, Woelfel ML, Dennison BA, et al. Overweight trends among children enrolled in the New York State Special Supplemental Nutrition Program for Women, Infants, and Children. J Am Diet Assoc. 2006;106(1):113-117.

3 Centers for Disease Control and Prevention. YRBSS Youth Online: Comprehensive Results. Available at: http://apps.nccd.cdc.gov/yrbss/SelQuestyear.asp?cat=5&desc=Dietary%20Behaviors&loc=NY. Accessed March 30, 2009.

4 Office of the State Comptroller. Preventing and reducing childhood obesity in New York. October, 2008. Available at: http://www.osc.state.ny.us/reports/health/childhoodobesity.pdf. Accessed March 30, 2009.

5 Vartanian LR, Schwartz MB, Brownell KD. Effects of drink consumption on nutrition and health: a systematic review and meta-analysis. Am J Public Health. 2007;97(4):667-675.

6 Hakim D. Governor calls for session on fiscal crisis. NY Times. July 30, 2008. Available at: http://www.nytimes.com/2008/07/30/nyregion/30paterson.html?ref=nyregion. Accessed March 31, 2009.

7 Fiore M. Studies weigh in on logic behind ‘obesity’ tax. Fox News. December 17, 2008. Available at: http://www.foxnews.com/story/0,2933,468245,00.html. Accessed March 16, 2009.

8 Deep pocketed sugar sweetened beverage tax opponents spend over $4 million to influence public health policy [press release]. New York: New York State Health Eating and Physical Activity Alliance; March 12, 2009.

9 Confessore N. Paterson lowers expectations on soda tax, calling approval unlikely. NY Times. February 14, 2009. Available at: http://www.nytimes.com/2009/02/14/nyregion/14sodatax.html?_r=1&scp=3&sq=soda%20tax&st=cse. Accessed March 9, 2009.

10 Citizens’ Committee for Children of New York, Inc. Voter preferences for closing the New York State budget gap. December 12, 2008. Available at: http://www.cccnewyork.org/publications/12-12-08CCCPoll.pdf. Accessed March 13, 2009.

11 Brownell KD, Frieden TR. Ounces of prevention—the public policy case for taxes on sugared beverages. N Engl J Med. 2009;360:1805-1808.

 

Image Credits:

1. vox_efx
2. poolie
3. specialkrb
4. specialkrb