The three largest soft drink companies in America have donated more than 98 cents of every $1 given to a campaign in Washington state to ban local governments from imposing new taxes on groceries, including soda and other sugary beverages. Voters will decide whether to enact Initiative 1634 in a statewide vote as part of the Nov. 6 election, 10 months after a soda tax took effect in Seattle, the largest city in the state.
The referendum follows the soda industry’s success, through a new state law in July, in preventing California cities and counties from considering soda taxes before 2031. Three Bay Area cities, San Francisco, Oakland and Albany, in 2016 followed Berkeley in enacting soda taxes through referendum. Berkeley was the first city, in 2014, to approve a soda tax.
The Yes to Affordable Groceries committee says Initiative 1634 “is about protecting people from a barrage of taxes like Seattle’s from being repeated throughout the state.” There is no Washington state tax on groceries at present. The Yes committee says it wants to close “a loophole that lets local governments impose taxes on groceries,” like Seattle’s tax, approved by the city council, of 1.75 cents per ounce on distribution of sugary beverages, syrups and concentrates.
More than $10 million was generated by the tax in the first six months, well ahead of forecasts of revenue of $15 million a year, said the Seattle Times.
Backers said the tax, discouraging consumption of soda and sugary drinks and sugary beverages, would combat obesity, tooth decay and chronic diseases such as diabetes and heart disease. In Philadelphia, the largest city with a soda tax, the mayor used the revenue to support schools.
On its website, the Yes committee says it is sponsored by the American Beverage Association, the soda industry’s trade group, and the initiative is supported by the Teamsters Union, the Washington state Farm Bureau, the Washington state Food Industry Association and the Korean-American Grocers Association. It says “these types of sweeping taxes … will adversely impact Washington’s small businesses, restaurants, grocers and working families.” Of the $8 million contributed to the Yes committee, $7.9 million is from the three largest soft drink companies: $3.8 million from Coca-Cola, $2.9 million from PepsiCo and $1.2 milliion from Keurig Dr Pepper, says Ballotpedia.
Opponents have raised and spent almost nothing against the initiative. The Yes committee has spent $5.4 million.
Tacoma, Spokane and Federal Way have looked at soda taxes but went no further, said KING-TV. The Yes committee told the broadcaster that it was not aware of any city in the state that was officially discussing a tax on basic groceries. One consequence of passage of the initiative, said KING, would be that Seattle would not be able to alter its soda tax.
Victor Colman, the only donor against I-1634 listed in state campaign finance reports, told KIRO-TV “we have a David vs. Goliath battle ahead of us.”
In neighboring Oregon, the general election ballot includes a constitutional amendment, Measure 103, to ban grocery taxes. Grocery chains defeated a proposal in 2016 for higher taxes on their sales and now “are going on the offensive with their own initiative,” said the Portland Oregonian. There is no statewide sales tax and businesses that sell groceries are subject to the state’s corporate minimum tax.