SACRAMENTO, Calif. _ California cities and counties will be banned from creating taxes on soda and other sugary drinks for more than a decade under a bill signed Thursday Gov. Jerry Brown.
The new law, which prohibits new local taxes on "groceries" through 2030, was the linchpin of a complex political deal between the beverage industry and organized labor that emerged over the past week.
Proponents of a separate initiative that would have made it harder to raise state and local taxes, agreed to remove the measure from the November ballot in exchange for the new law. The initiative was primarily funded by soda companies.
"Mayors from countless cities have called to voice their alarm and to strongly support the compromise which this bill represents," Brown wrote in his signing message. He also expressed concern that the initiative would have placed restrictions on the ability of state regulatory agencies to create new charges: "This would be an abomination."
Earlier Thursday, the state Senate and Assembly passed the bill. Democrats, who are in the majority of both the Senate and the Assembly and provided most of the votes the bill, said they had been put in an impossible bind by the initiative.
State Sen. Scott Wiener, a San Francisco Democrat who was among a few no votes, compared it to a "nuclear weapon" aimed at local government budgets and urged public health advocates to direct their anger at soda companies who forced the Legislature's hand, rather the lawmakers who approved the deal.
"We find ourselves under the biggest rock and the smallest hard place," Senate Pro Tem Toni Atkins said, before asking her colleagues to support the bill.
The beverage industry, which contributed more than $7 million to the initiative campaign, has been seeking relief from a growing wave of city soda taxes. Frustrated by the industry's tremendous influence at the Capitol, where it has blocked bills to tax and label sugary drinks for years, public health advocates are now turning to the local ballot box.
Over the past two election cycles, four California cities, led by Berkeley, have approved fees on sugary drinks intended to discourage consumption and raise money for public health programs. The campaigns are expensive for the industry � it spent $30 million in 2016 to unsuccessfully fight tax proposals in San Francisco and Oakland � and early results in Berkeley suggest its 1-cent-per-ounce tax has led to a significant decline in sales.
The new law is retroactive to the beginning of 2018, meaning any new soda taxes that cities may have planned to pursue this year are voided. Sacramento, Santa Cruz and Richmond are among the communities that were considering local tax measures on sugary drinks.
