California’s legislature rushed to pass a last-minute bill that bans cities and counties from passing soda taxes until 2031. The bill was passed to stave off a ballot initiative backed by the soda industry that would have made it much harder for municipalities to hike any type of tax.
The ballot initiative, called the Tax Fairness, Transparency and Accountability Act of 2018, would have required a two-thirds majority for cities and counties to raise taxes. The initiative was sponsored by the American Beverage Association, the soda industry’s lobbying group. A January analysis found that about half of local tax measures adopted by local voters would not have passed if forced to meet the two-thirds standard.
Healthcare groups responded by announcing a petition drive for a statewide vote in 2020 on a 2-cents-per-ounce tax on sugary beverages, said the Los Angeles Times. The soda tax proposal, which would change the state constitution to guarantee the right of local governments to tax soda, would exempt diet soda, fruit and vegetable juices with no added sugar, and drinks in which milk is the primary ingredient.
Voters in three Bay area cities — San Francisco, Oakland, and Albany — approved 1-cent soda taxes by large margins in the 2016 general election. Also in 2016, residents of Boulder, Colorado, approved a 2-cents-an-ounce soda tax. In 2014, Berkeley was the first city in the country to adopt a soda tax by referendum. One study found that in Berkeley, soda consumption dropped by nearly 10 percent in the year after the tax was passed. Advocates who support soda taxes say they introduce a disincentive for shoppers to choose sugary, potentially health-damaging beverages.
The soda industry has spent millions fighting soda taxes across the country. In California, the ABA spent $7 million since January to promote its ballot initiative.