A diabolical plan to stop soda taxes forced California lawmakers to vote for a law they hated

The future of soda taxes.
The future of soda taxes.
Image: Reuters/Dylan Martinez
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Using strategic maneuvering decried by public health advocates, the soda industry has scored a political win in California that will stop cities and towns there from adopting soda taxes.

As signed into law by governor Jerry Brown, the ban on food and beverage taxes backed by the American Beverage Association will be on the books for 12 years. It’s a move that completely derails momentum health advocates had gained in recent years. Voters in Berkeley, San Francisco, and Oakland had already elected to adopt taxes on beverages with added sugar. Those cities will keep their taxes, but the three cities that expected to consider adopting similar measures this year—Sacramento, Santa Cruz, and Richmond—will no longer be able to do so.

The soda industry wasn’t able to usher the bill through the state legislature in a straightforward way, though. It had to resort to tactics that have been criticized by state lawmakers, including some who felt they were held hostage by legislative manipulation and forced into supporting it. State representative Jim Wood called the maneuvering extortion outright.

Under California law, a ballot initiative can be put before voters if gets enough signatures of support. To propose an amendment to the California constitution, you need signatures representing 8% of the state population, and to propose a new statute, you need 5%. The beverage industry was able to get enough signatures to put forth a ballot initiative that would require towns and cities to change the way they approve new taxes that are often used to balance their budgets, fund city projects, and run basic services such as trash collection. Rather than get a simple majority vote to approve such taxes, the ballot initiative would have changed the law to require cities and towns to get the OK with a two-thirds vote, making it more onerous to adopt routine measures to keep localities functioning smoothly.

That freaked out a lot of mayors. It also disturbed public worker unions, who responded by brokering a compromise with the beverage industry in which it would drop the initiative from the ballot in exchange for the passage of legislation implementing a 12-year ban on soda taxes.

The fingerprints of big soda companies were all over the measure. Over $7 million of the $8.25 million raised to launch a signature-collection campaign came from the American Beverage Association California PAC, which in turn is funded by name-brand companies.

The new law only applies to California, but the strategy could become a template for the beverage industry to use in other states.

The makers of soda for several years now have flailed against bad optics. Global health organizations have said soda taxes are one way to combat chronic health problems that plague Americans, in particular. Sugar has been linked to diabetes, obesity, and heart disease—especially in poorer communities.

“This is one of the worst pieces of legislation I have seen in more than 30 years spent fighting for better health for kids and families,” wrote Nancy Brown, the CEO of the American Heart Association, in a press release. “We could not be more disappointed to see this bill, taken straight from the tobacco industry playbook.”