by Kirby S. Laney, posted 23 February 2018
On January 1st, 2018, a tax went into effect, in the City of Seattle, that few people knew about but will affect nearly everyone. The ‘Sweetened Beverage Tax’ passed the Seattle City Council in the summer of 2017, with little notice or public discussion.
A grassroots organization has organized to educate and advocate for the public. They want to give Seattleites a voice to inform the City Council and Seattle Mayor Jenny Durkan (who was not in office when the Council passed the tax) on what we, the people, think of this tax, and its repercussions.
‘Keep Seattle Livable For All’ describes the tax as burdensome and regressive, and they created 800-397-3228 for voters to call and leave a message about the tax. ‘Keep Seattle Livable’ represents over 400 business owners, and the American Beverage Association. The tax has already damaged some area businesses, and could potentially end a few others. ‘Keep Seattle Livable’ has given a voice to businesses ‘on the border’, where they operate on the Seattle-side of the street and watch customers strolling across to stores and restaurants, a few feet away, that can sell cheaper soda, sweetened tea, sports drinks, and juice drinks.
In Fremont, customers won’t have that choice. Coca-cola is going to be taxed the same (1.75 cents an ounce) at the Fremont Fred Meyers as at our 7-Elevens. However, when deciding to eat out, customers may choose not to explore Fremont, and pay another tax, and instead go to Shoreline, or Bellevue. When out to see a show at Nectar Lounge or High Dive, or another of our nightclubs, revelers may drink more beer and wine, and avoid soda pop, before driving home. On Sundays, treasure-hunters may go shop in Tukwila or Kirkland, rather than visiting the Fremont Market before stopping by PCC.
‘Nail In The Coffin’?
A spokesperson for ‘Keep Seattle Livable’, Jim Desler, acknowledged that no amount of grassroots effort is going to erase this tax. “It’s going to be with us for a while,” he acknowledged, and shoppers are going to have to adjust to it – as are the businesses. For larger businesses, that can mean sending customers to their locations outside Seattle, but smaller businesses (like nearly every retailer and eatery in Fremont) will just have to suck it up and pay the tax (likely charging their customers more,) or they can decide that this is the end. As Desler said, for some struggling businesses, “it’s another nail in the coffin.”
Desler also sees this tax as another blow to keeping Seattle affordable. For people with money, cars, and/or self-directed schedules, the ‘soda’ tax can be avoided pretty easily. Drive outside the city and buy Gatorade or Simply Lemonade there. For those on fixed incomes, with kids and jobs to attend to, and/or without vehicles, this is another way that our city has become too expensive. “We’ve found, by a vote of the people,” Desler said, of the people contacting ‘Keep Seattle Livable’, “[the tax has] proven to be unpopular.”
The regressive nature of the tax has Desler concerned. “It’s obviously a greater hit to those who can least afford it,” he observed, “They are really stuck with those prices.” ‘Keep Seattle Livable’ calculated the increase of $2.24 on the cost of a gallon of sweetened tea, and a $2.52 increase on a 12-pack of 12-ounce cans of soft drink.
At A 31-Year-Low…
As with any product specific tax, this isn’t just another cost for businesses. The tax starts with distributors, who must charge businesses per ounce, whether the product sells or not. Business owner then have to sort out how to adjust to the additional cost. Retailers can shrink their beverage selections, or remove sweetened drinks altogether – especially if they cannot sell the products before they may expire. For restaurants, refills will be increased in cost as much as an initial pour, and they need to cover that cost. Another consideration are specials that previously included a drink, but will now cost businesses more. Food trucks, which already operate on tight-margins (like most small businesses,) may find they lose customers by not selling beverage, but also lose sales (and income) by offering drinks at higher prices.
‘Keep Seattle Livable’ formed for education and advocacy on behalf of our businesses and residents, attempting to inform them about this sticky, sugary tax. “Businesses form the backbone of the city,” Desler observed. They provide jobs, and already pay many of the taxes that fund the City.
With this latest tax, businesses will once again pay more, and have less to send home with owners, and employees. As one small business owner, Thiraphan Suttabusya of Ti22, told ‘Keep Seattle Livable’, “I work in my shop every day, and I can’t afford to hire other employees. Seattle has plenty of owners in the same situations as me, and we simply just do not have time to head down to city hall to give them a piece of our mind. We are busy trying to make a living.”
According to an article in The Washington Examiner the tax fails to make sense on its face; like with some other ‘vice’ taxes (cigarettes, alcohol, admissions, etc.) it will likely never make the money the City Council expects as soda consumption, nation-wide, has been dropping lately to a 31-year low. With the money it makes, the tax could raise $400,000 for vouchers to go to needy families, through the Fresh Bucks initiative, at a cost of $2,000,000 in administrative costs.
‘As Bad As You Thought’
“The vote was last summer,” Desler explained, about the Council’s decision, “it started over the holidays,” when fewer people can and will take notice of Council actions, “and it’s as bad as you thought.” After all, other cities have tried this, and seen it fail. New York City considered and rejected a beverage tax. Chicago had one for a short time, but outcry from businesses and residents caused their leadership to remove it. In Philadelphia, over the first year of their soda tax, Desler quoted figures of a 29% drop in sweetened beverage purchases in the city, and a 26% rise in purchases outside it (the Washington Examiner reports higher numbers.) Desler also reported a 7% drop in all grocery sales inside Philadelphia. A 7% drop in sales in some Fremont businesses could mean the difference between their staying or going.
During her campaign, now-Mayor Durkan voiced opposition to the tax, Desler observed, and ‘Keep Seattle Livable’ volunteers hope that calls to 800-397-3228 will convince her, and the Council, to reconsider. Or, at least, convince them to allow voters to vote the issue.
Please consider calling 800-397-3228 soon, and letting our elected official know what you think of this sweetened beverage tax. ‘Keep Seattle Livable’ can help us know about this issue, but without the combined effort of everyone concerned, it will just be another cost we pay for living here.
Related Articles
- Take A Healthy Step, And One Less Sip Of Soda Pop
- by Kirby Lindsay, March 27, 2013
- True Facts From A Fremont Retailer
- by Kirby Lindsay, November 25, 2013
- Another Perspective On Seattle Prop. 1
- by Kirby Lindsay Laney, October 27, 2015
©2018 Kirby S. Laney. This column is protected by intellectual property laws, including U.S. copyright laws. Reproduction, adaptation or distribution without permission is prohibited.