Here’s why Santa Cruz just added a soda tax, in defiance of a statewide ban

A new so-called “soda tax” that was approved by voters in the city of Santa Cruz went into effect on Thursday, the first tax of its kind to be passed in California since a ban was signed by former Gov. Jerry Brown in 2018.

The tax — approved by voters in November — adds a 2-cents-per-ounce tax on nonalcoholic beverages that have one or more caloric added sweeteners and that have 40 or more calories per 12 fluid ounces of beverage, including sodas, coffees, sweetened ice teas, energy drinks and slushies.

Four other cities in California, including San Francisco, Berkeley, Oakland and Albany, already have a tax on sugar-sweetened beverages on the books, with Berkeley being the first city in the country to do so.

But Santa Cruz is the first one to institute a new one since legislators and business leaders struck a deal that was signed by the previous governor that prohibited local governments from imposing taxes on soda until 2031.

Santa Cruz City Councilmember Shebreh Kalantari-Johnson, who was one of the proponents of the soda tax, told Lookout Santa Cruz after the measure passed in November that the campaign was framed as a battle between Santa Cruz and the American Beverage Assn.

“That really resonated with people, that this was big industry trying to manipulate and strong-arm local voters,” Kalantari-Johnson told the publication. “We won’t let big industry decide for us.”

Santa Cruz’s sugary drink tax doesn’t apply to beverages intended for medical use, beverages that continue less than 40 calories per 12 fluid ounces of drink, beverages for infants, supplemental or meal replacement beverages, milk products, 100% natural vegetable or fruit juice, concentrates, sweetened medication (such as cough syrup) and alcoholic beverages.

“Santa Cruz demonstrates that when presented with the facts about the dangers of sugary drinks, voters see through the soda industry’s multi-million-dollar efforts to deceive them with misinformation,” Nancy Brown, chief executive of the American Heart Assn., said in a recent statement. “The American Heart Association was proud to support the ballot measure and remains committed to the city of Santa Cruz in this years-long David vs. Goliath effort against the beverage industry.”

Steve Maviglio, a spokesperson for the American Beverage Assn. which lobbied heavily against soda taxes, decried the latest measure in a statement.

“Santa Cruz is implementing a tax that violates a popular statewide ban on grocery taxes and that was opposed by a broad coalition of small businesses, progressive leaders, labor unions, and social justice organizations as an unfair burden on working families already struggling with record-high prices,” he wrote in an email.

The American Beverage Assn. has also launched a campaign called “Your Cart Your Choice.”

“The price increases from a tax hurt lower-income communities and people who work paycheck to paycheck the most,” according to the campaign’s website. “More taxes are the last thing working families need right now amid crippling inflation, supply chain issues and the price of gas making everyday items more expensive already.”