SACRAMENTO, Calif. _ California cities and counties would be banned from creating taxes on soda and other sugary drinks for more than a decade under a bill approved Thursday by the Legislature.
The bill, which would prohibit new local taxes on "groceries" through 2030, is the linchpin of a complex political deal between the beverage industry and organized labor that emerged over the past week.
If Gov. Jerry Brown signs the bill, proponents of a separate initiative that would make it harder to raise state and local taxes have agreed to remove their proposal from the November ballot.
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 bill passed Thursday is retroactive to the beginning of 2018, meaning any new soda taxes that cities may have planned to pursue this year would be voided. Sacramento, Santa Cruz and Richmond are among the communities considering local tax measures on sugary drinks.
The initiative would raise the threshold for all new taxes and tax increases to two-thirds. Opponents, including public employee unions and cities, argue that the change would devastate communities still recovering from the economic recession by preventing them from raising new revenue to balance their budgets.
Public health groups and other soda tax supporters have decried the deal as a cynical ploy to protect beverage companies' profits and further evidence of their political power in Sacramento.
"What on Earth has happened here?" Assemblyman Richard Bloom, a Santa Monica Democrat who has supported unsuccessful legislation for a statewide soda tax, said before voting for the bill. "If I sound like I am frustrated, angry and disgusted, I am."
