California bows to beverage industry, blocks soda taxes

SACRAMENTO, Calif. — A new push by the beverage industry is slowing the expansion of soda taxes in California and elsewhere.

California cities pioneered soda taxes as a way to combat obesity, diabetes and heart disease, but the Legislature and Gov. Jerry Brown on Thursday bowed to pressure from beverage companies and reluctantly banned local taxes on soda for the next 12 years.

It follows similar bans recently passed in Arizona and Michigan. Voters in Oregon will decide on a statewide ban in November. The American Beverage Association, which represents Coca-cola, Pepsico and others, has backed the moves after several cities passed taxes on sugary drinks in recent years.

California’s ban is part of a last-minute maneuver to block a beverage industry-backed ballot measure that would make it much harder for cities and counties to raise taxes of any kind. The ABA said in a statement the legislation is about keeping groceries, including drinks, affordable.

Lawmakers approved the proposal despite deep reluctance.

“This industry is aiming a nuclear weapon at government in California and saying, ‘If you don’t do what we want we are going to pull the trigger and you are not going to be able to fund basic government services,’” said Sen. Scott Wiener, a Democrat from San Francisco, which has a soda tax.

The Legislature’s action drew a strong rebuke from public health advocates who view soda taxes as a crucial front in their efforts to contain obesity and the health complications it causes.

But local government officials, terrified by the prospect of having their hands tied on all future tax increases, reluctantly backed the legislation.

“I’ve been in politics a long time, and sometimes you have to do what’s necessary to avoid catastrophe,” said Sacramento Mayor Darrell Steinberg, who is pushing a local sales tax increase that would be at risk if the ballot measure passed.

The governor said only a handful of communities are looking to tax soda, but the ballot measure would affect all 482 cities in California.

The California measure bans any new taxes on groceries including beverages through 2030, but allows four cities in the Bay Area to keep soda levies.