Big Gulp! A Soda Tax War is Coming

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

In the tit-for-tat battle over soda taxes, the ball is now in the industry’s court—how will it respond to the announcement that healthcare advocates plan to push a 2020 initiative to allow taxes on sodas?

A soda tax ban came about because legislators, prompted by city officials and union representatives, agreed to a bill to ban soda taxes for more than a decade if backers of an initiative that would require a two-thirds vote on all local taxes would pull the measure.

Gov. Brown’s signature on the bill was still drying when healthcare groups led by the California Medical and Dental Associations announced plans for a 2-cents an ounce soda tax that also would allow local governments to enact soda taxes, undercutting the recently passed bill.

The beverage industry that financially backed the Taxpayer Protection Act will now draw up a new strategy to counter the proposed initiative.

The Taxpayer Protection Act polled well and business supporters could reintroduce it for 2020 so that voters could choose between a measure that would raise soda taxes and one that would require greater votes to enact them and other local taxes, as well.

Undoubtedly, such a counter measure would contain a poison pill to wipe out the initiative that opponents want to shut down. That could be accomplished by saying something such as if a tax on beverages is on the same ballot and this taxpayer measure gets more votes than the other measure, the tax raising initiative has no effect.

It would be costly to run a campaign for one measure and against another. The beverage industry might be content to mount a campaign to simply defeat the proposed soda tax initiative. In initiative contests it is easier to secure a No vote than a Yes vote.

Other players will have a say in how this issue is resolved. Unions were concerned with the original Taxpayer Protection Act cutting off an easier route to raise taxes. While taxes raised by the initiative may not directly favor them, unions would be in support of the provision that would allow local soda taxes.

In contrast, taxpayer groups that were not happy with the legislative compromise might re-join an effort to make it harder to raise local taxes.

Special interest principals and consultants are the generals already working out the next moves in the soda tax initiative wars.

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