Voters from two Northern California cities were deciding Tuesday whether to impose a tax on sugary drinks, but beverage industry groups have spent upward of $11 million to oppose the ballot measures. Thus far, no U.S. city has approved legislation taxing sweetened beverages, meaning “yes” votes in San Francisco or Berkeley would be a national first.
San Francisco’s Proposition E would impose a 2 cent per ounce tax on beverages with added sugar such as sodas and sports drinks, and Berkeley’s Measure D would impose a 1 cent per ounce tax on sugary drinks.
Both measures would exempt diet sodas, milk, nondairy creamers, alcoholic beverages, infant formula and naturally sweetened drinks such as fruit juices.
Economist Ted Egan has told San Francisco’s Board of Supervisors that the city’s residents currently drink 3 billion ounces of sugary beverages annually and that the tax would increase the price of a typical drink by 23 to 26 cents, resulting in a predicted 31 percent reduction in soda consumption.
But the American Beverage Association has been spending mightily to make sure the propositions don’t pass. The industry organization has invested $9 million on campaigns to oppose San Francisco’s measure, about $19 per eligible voter, and at least $2.1 million — or $27 per eligible voter — against Berkeley’s measure.
In San Francisco the $35 million to $53 million that Egan estimates the taxes would raise would be directed to nutrition and physical education programs through the city’s school district and the parks and recreation departments, according to the ballot measure.
Berkeley’s measure would direct the tax gains to the city’s general fund, and the city council has said it would spend the money on public education programs.
Proponents of the measures say the taxes will discourage the purchase of sugary beverages, which would in turn reduce rates of diabetes and other health problems. A study from a team of scientists at UCSF, Columbia University and San Francisco General Hospital, for example, found that a nationwide 1 cent per ounce tax on sweetened beverages could prevent an estimated 240,000 cases of diabetes each year as well as 100,000 cases of heart disease, 8,000 strokes and 26,000 deaths over the next decade.
Opponents say the taxes would unfairly target poor and minority voters who disproportionately consume sugary beverages.
“This is the 1 percent pushing a tax on the 99 percent and exempting themselves from it,” Roger Salazar, a spokesman for the No on Measure D campaign, told the news website Berkeleyside.
So far, no U.S. city has managed to tax soft drinks or sugary beverages. Former New York City Mayor Michael Bloomberg drew national attention when he called for a ban on high-calorie sodas and drinks in sizes larger than 16 ounces, but courts ruled in 2013 that imposing the ban through the city’s Board of Health was beyond the agency’s “scope of regulatory authority.”
The California cities of Richmond and El Monte failed at their attempts to implement 1 cent per ounce taxes on sugary drinks in 2012.
In Mexico, a tax on sugary beverages enacted this year appears to be working. Purchases of the taxed beverages were down by 10 percent in the first quarter of 2014 compared with the first quarter of 2013, according to The Wall Street Journal.
The consumption of nontaxed drinks such as bottled water and milk rose 7 percent in the same period, the Journal said.