BRIEF

Centering Equity in Sugary Drink Policy: Elements of Equitable Design axing sugary drinks has emerged as an important healthy food and chronic disease prevention policy. Sugary drink Equity Ttaxes generate substantial revenues and reduce sales of sug- Equity is achieved when everyone has a fair and just ary drinks. Yet they must do more. A well-designed tax promotes opportunity to thrive, regardless of race, identity, health equity and benefits the people most harmed by the bev- economic class or other group characteristics. Equity erage industry’s sugary drink products and predatory marketing emphasizes fairness in process and equality in practices. In contrast, tax policies that do not explicitly consider outcomes and seeks to transform inequitable social equity can intentionally or unintentionally exacerbate inequities. structures, unhealthy community environments, Healthy Food America and The Praxis Project, funded in part and systemic biases that have led to the current conditions. The vision and process for achieving by Voices for Healthy Kids1​, convened the Tax Equity Workgroup2​ equity is centered in community. to develop recommendations on how to design equitable tax policy. To guide its process, the Workgroup collaboratively devel- oped a shared values statement: Impacted Community We value sugary drink tax policies that provide sustain- An impacted community is one experiencing able sources of support for building health equity and social inequities in health conditions associated with justice, community capacity and agency, and that hold sugary drinks. beverage corporations accountable for the harms they bring to communities. These inequities are caused by adverse community An equitable tax invests revenues in impacted communities. conditions shaped by racial and ethnic discrimination Investments address community-defined priorities, fund grass- and by social, political and economic exclusion, and roots organizations from impacted communities to address them, are exacerbated by exposure to sugary drinks. and build long-lasting community infrastructure and capacity to improve equity and support healthier lives. How a tax is initiated, passed and implemented also has implications for equity. Equity is advanced when people from impacted communities are co-leaders of tax campaigns from the beginning and play a substantial role in tax design. Their participation during tax implementation solidifies community understanding of and

Healthy Food America and The Praxis Project convened the Tax Equity Workgroup to develop recommendations on how to design equitable tax policy. These recommendations are endorsed by the following organizations: Berkeley Media Studies Group Just Strategies Boulder County Public Health Healthy Food America Center for Science in the Public Interest Public Health Law Center ChangeLab Solutions Sugar Freedom Project, a project of InAdvance Childhood Prevention Coalition (WA State) The Praxis Project UConn Rudd Center for Food Policy & Obesity

1 Voices for Healthy Kids is an initiative of the American Heart Association. 2 The Innovation, Equity and Exploration Tax Equity Workgroup.

Tax Equity Workgroup | Healthy Food America | The Praxis Project December 2020 1 support for the tax and increases accountability for equitable implementation. Informing the community and affected businesses about tax goals, how it works, revenues raised, and use of revenues is the foundation for meaningful community engagement. The Workgroup identified sugary drink tax policy elements critical for centering on equity. This brief summarizes these elements. The full report, suggestions for research about the equity effects of taxes, and a technical report (which describes recommendation development) are available at Healthy Food America. Policy Design Recommendation Rationale Considerations

A. Make equity a priority goal for the tax using Establishes lawmakers’ intent in Include a definition of “equity” in the legislative intent language. making equity a priority goal and tax bill legislative intent and specify the commits government to investing communities impacted by inequities. revenues and implementing the tax equitably.

B. Invest tax revenues in communities most impacted Makes the tax policy economically Common equity-focused investments by the health conditions caused by consuming progressive by directing tax funded include access to healthy foods and sugary drinks. Investments should (1) reflect investments to the communities most safe drinking water, early childhood the values, needs, and priorities of the impacted impacted by sugary drinks to support and education programs, community communities; (2) address the social and economic programs and services valued by infrastructure improvements, youth determinants of health that contribute to inequities people from these communities. development, promotion of physical in preventable chronic diseases; (3) support activity, health and nutrition education, community-based organizations in impacted and chronic disease prevention and communities to deliver programming and activities support programs for people with low that support health and advance equity; and (4) incomes and people of color. when allowable, explicitly dedicate tax revenues to investments in impacted communities.

C. Specify that revenue investments should grow Increases the ability of the community Community capacity refers to the assets long-term community capacity to advocate for to define priorities and create the and skills needed to influence public and policy and systems changes aligned with changes it desires. organizational policies, systems, and community priorities and values. practices, and to change environmental conditions impacting equity.

D. Establish a dedicated sugary drink fund Assures that tax revenues are A dedicated fund can be created in the within the budget that clearly states the permitted transparently invested in the priority initial tax legislation or adopted later. uses for these funds. areas defined by the tax legislation All states, as well as local governments and not diverted to unintended uses. granted such power by the state, can do so.

E. Specify a strong community role in revenue Gives the communities most impacted The approaches to community allocation decisions. by sugary drinks a substantial role participation in revenue allocation vary • Include advisory processes led by people from in determining revenue allocation, from site to site, depending on local impacted communities to recommend priorities an essential feature of equitable tax context. They include advisory boards, for revenue allocation. implementation. community meetings, surveys, or • Include advisory processes for programs participatory budgeting. They may be funded by tax revenues to identify priorities specified in the tax bill or developed as for implementation. a matter of practice after tax adoption.

Tax Equity Workgroup | Healthy Food America | The Praxis Project December 2020 2 Policy Design Recommendation Rationale Considerations

• Consider establishing a Community Advisory Include mechanisms to inform the Board (with a majority of members from community about tax implementation, impacted communities) as a key advisory revenue collection, allocations, and process. outcomes.

F. Include provisions that make the revenue Awards funds to organizations close Equity-based criteria for awarding grants allocation process equitable. to impacted communities, supports to community organizations might • Require equity-based criteria for prioritizing solutions developed by communities, include targeting allocations to smaller allocation of revenues. and uses simple and transparent grant organizations; funding organizations led • Require equity-based criteria for use of application and award processes. by and serving people of color; and giving funds received by government agencies preference to activities that produce and community grantees. co-benefits such as job creation and • Require funding of community organizations training, economic development, and from impacted communities as a component community capacity and of revenue allocations. infrastructure for creating a healthy and just community.

G. Require evaluation of tax impacts on equity. Allows community members and Ask community what measures are of policy makers to determine the interest. Examples of equity impact extent to which tax impacts and metrics include proportion of revenues implementation are equitable and allocated to activities benefitting whether any course corrections impacted communities and the are required. extent to which revenue allocations reflect community guidance developed by advisory processes (see full report for additional examples).

H. Pass through a significant portion of revenues Community leadership ensures local To the greatest extent possible, collected by state-level taxes to support local community needs, values, and allocations must be explicitly directed community-led efforts and collaborations to priorities are prioritized. to community-centered projects that improve equity. increase social and racial equity by addressing the conditions and environments that generate inequities, are located in the most impacted communities, address these communities’ priorities, support the development of infrastructure and leadership capacity in these communities, and invest tax revenues directly into community based organizations that lead programming and activities.

State legislation should consider establishing an Equity Advisory Board to advise the state on the equitable

Tax Equity Workgroup | Healthy Food America | The Praxis Project December 2020 3 Policy Design Recommendation Rationale Considerations

allocations of tax revenue funds to community-based organizations working in impacted communities and reserve the majority of Board positions for local leaders representing the interests of these communities.

I. Require processes to monitor and publicly report Gives communities knowledge of how Specify a process for monitoring, on tax revenue collections, allocation, and revenues are allocated so they can reporting and widely disseminating spending. assess responsiveness to community information on the collection and use priorities and increases accountability of revenues. of government for revenue allocation. Include information on who is benefitting from investments, reported by race, income, and geography.

J. Structure sugary drink taxes as taxes paid by Imposes tax on companies that Excise taxes that are paid by the the producers or distributors of sugary drinks. produce or distribute sugary drinks distributor are less complex to resulting in (1) tax revenues that can administer than sales taxes. They change be invested locally to support activities consumer beverage choice because they valued by impacted communities, and increase shelf price whereas sales taxes, (2) higher shelf price of sugary drinks which are imposed at the cash register that may shift purchases to non-taxed and do not appear on the shelf price, beverages. are less likely to do so.

Tax Equity Workgroup The Workgroup was comprised of leading community, professional, and academic experts working at the forefront of tax policy design, adoption, implementation, and evaluation. Workgroup members are champions for healthy communities and equity. Organizations are listed for identification purposes only: Sabrina Adler, ChangeLab Solutions Joelle Johnson, Center for Science in the Public Interest Rosalie Aguilar, Salud America Jim Krieger, Healthy Food America/ University of WA Rachel Arndt, Boulder County Public Health Kirsten Leng, Healthy Food America Doug Blanke, Public Health Law Center Kimberly Libman, ChangeLab Solutions Francis Calpotura, Sugar Freedom Project, a project of InAdvance Sally Mancini, UConn Rudd Center for Food Policy & Obesity Stacy Cantu, Salud America Darya Minovi, Center for Science in the Public Interest Victor Colman, Prevention Coalition (WA State) Xavier Morales, The Praxis Project Molly Devinney, Sugar Freedom Project, a project of InAdvance NaDa R. Shoemaker, Voices for Healthy Kids Aaron Doeppers, Voices for Healthy Kids Leika Suzumura, University of WA, MPH student Lori Dorfman, Berkeley Media Studies Group Roberto Vargas, Sugary Drinks Distributor Nancy Fink, Center for Science in the Public Interest Tax Advisory Committee Claudia Goytia, Voices for Healthy Kids Dwayne Wharton, Just Strategies Joi Jackson-Morgan, 3rd Street Youth Center

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