​Summary: In California, health disparities and inequities persist for specific subsets of the population — the reasons for this are deep-seated and multifaceted. Sugary drink consumption is one health behavior for which disparities exist, and it has been linked to excess weight gain, obesity, and the incidence of type 2 diabetes, heart disease, and cancer. Federal, state, and local governments have considered excise taxes on sugary drinks to reduce consumption, reduce obesity and associated chronic disease, and provide a new source of government revenue. In California, statewide legislative measures to introduce sugary drink excise taxes have been proposed for a number of years in efforts to improve the health of Californians and reduce inequities, but none have passed.

Authors modeled the implementation of a state excise tax on sugary drinks in California at a tax rate of $0.02/ounce. CHOICES cost-effectiveness analysis compared the costs and outcomes over a 10-year time horizon (2020–2030) of implementing a tax with the costs and outcomes associated with not implementing a tax.

Findings: The tax modeled is projected to be cost-saving (that is, the tax saves more in future health care costs than it costs to implement even absent the potential revenues). The tax is projected to decrease sugary drink consumption among California residents, prevent nearly 200,000 cases of obesity, and save more than $1.8 billion dollars in health care costs. People who consume sugary drinks are expected to spend less on these drinks with the tax in place. Authors also project that non-Latino Black/African American and Latino California residents will experience even greater health benefits than the average resident after the tax is implemented.