Seattle soda tax raises nearly $1 million more than predicted in first 3 months
SEATTLE -- At Pecos Pit, you can get your BBQ spicy. It was a tradition to chase their popular pork and brisket sandwiches with soda, but that tradition is changing.
“Do you want anything to drink?” asks owner Debra Wise. “Water,” says the customer.
All the customers in a 10 minutes span asked for water or homemade lemonade. Is it a trend or just Seattle’s sweetened beverage tax, which has been in existence for six months.
"It’s terrible, over and above my bill was $1,000,” says Wise. “I can't absorbed that so I said okay, I have to pass it on”.
Last month, she put out a side alerting customers she had two prices for her fountain drinks. One price includes the tax she has to pay the city, nearly 2 cents per ounce. The other is soda tax free.
“We are making a lot more lemonade,” Wise says because homemade lemonade is not taxable.
In the first three months, the tax raised $4,446,000, nearly a million dollars more than was predicted. The city’s budget office estimated the tax would raise $14.8 million in its first year.
The city says 1.984 million gallons of sweetened beverage were taxed.
“Our sales are down probably 15 or 20 percent,” says Todd Biesold, CFO of Merlino Foods who sells beverage products wholesale to area restaurants.
“Here we have everybody’s favorite bar mixer,” says Biesold grabbing a 32 ounce bottle of Grenadine.
“We sell this for $5 a bottle, but the tax is $6.72 and there is a lot of confusion about this because it makes more than 32 ounces” says Biesold.
He sells a 5 gallon box of regular Coke-Cola syrup for $89 but the tax is roughly $65.
The law dictates how the money will be spent in the first year with 26 percent going to healthy food options for low income people, 24 percent to family child care programs, 17 percent for the first year of college tuition for Seattle high school graduates, and 14 percent to collect the tax and an evaluation study.
Nineteen percent has not been earmarked and could be decided by the later this year.
“You give it back,” says Wise on the extra money that was collected, otherwise she may encourage people to drink more water or her homemade lemonade, sending a message of denial to city lawmakers.
According to lawmakers, the tax is more about preventing obesity and diabetes than collecting money.
A spokesperson from Seattle King County Department of Health says it’s too early to know if the tax is having its intended effect to cut down on people drinking sweetened beverages.