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Soda taxes go flat in California, possibly Washington

Cokes in our pantry

With apologies to Charles Dickens, it is the best and worst of times for soda taxes.

News out of Washington State today is that Seattle's sweetened beverage tax raised about $1 million more than predicted in its first three months.

Seattle's tax — similar to others across the United States that tax a variety of sugary beverages but are popularly called soda taxes — took effect on Jan. 1, 2018.

In its first three months as law, it reportedly raised almost $4.5 million. If that pace holds throughout the rest of the year, it will blow past the city's budget office estimate that the tax would bring in nearly $15 million in its first year.

Lawmakers who supported the 1.75-cents-per-ounce tax on certain drinks say it was enacted as a way to help reduce obesity and diabetes among Seattle's residents. A Seattle King County Department of Health representative said it's too early to know if the tax is having its intended health effects.

Meanwhile, though, the local government is not turning down the tax revenue.

Seattle's tax success, however, could be the state's last, at least for a while.

Washington food and beverage referendum: Evergreen State opponents of soda taxes believe they have enough petition signatures to require voters to decide about any future new soft-drink and food taxes in Washington.

Initiative 1634, if it does qualify to make it onto November's state ballot, would leave Seattle's soda tax in place, but would prohibit other city and county governments in Washington from taking up similar measures.

The anti-tax fight is spearheaded by Yes! To Affordable Groceries, which was created in late February, two months after Seattle's soda tax took effect. The group says it formed to fight the price increases that consumers and small businesses face when food and beverage taxes are enacted.

The group is supported by, among others, labor organizations and farm, grocery and beverage associations. Yes! To Affordable Groceries' top 5 contributors are, according to its website, the Washington Food Industry Association, The Coca-Cola Company, PepsiCo Inc., Dr Pepper Snapple Group and Red Bull North America.

Last week Initiative 1634 advocates turned in nearly 300,000 signatures that they hope will get the measure before the voters this fall. At least 259,622 valid signatures are needed to qualify an initiative for the November ballot.

Why did the anti-tax group decided to grandfather the state's largest city? Seattle's budget already is in place and is based in part on the expected beverage tax revenue.

"We don't want to take anything away from a city that’s actually operating it," Yes! spokesman Michael Mandell told The Seattle Times. "This is about making sure that going forward, the one tax that shouldn't be included is a tax on food and beverages."

California legislature pre-empts voter referendum: Further down the Pacific Coast, officials in California decided not to wait for voters to decide on soda taxes.

But the Golden State move probably is not what you expected.

California lawmakers agreed to a ban on all new sugary beverage taxes until 2031. In exchange, the beverage industry dropped its support for a Nov. 6 ballot measure that would have curbed all new such taxes in the state.

The decision by politicians in Sacramento was a surprise since the usually reliable liberal and consumer-focused state was a pioneer in soda taxes.

In 2014, Berkeley residents were the first in the country to vote for taxing sugar-sweetened beverages such as soda and juice. Two years later, their neighbors across the bay in San Francisco also approved a local soda tax.

As with the Seattle tax, the San Francisco Bay area's sin tax votes were framed as a way to combat obesity, diabetes and heart disease.

Health concerns, however, were jettisoned last week in lieu of political pragmatism.

Tying up other taxes: The California legislature and Gov. Jerry Brown bowed to pressure from the beverage industry and agreed to ban local taxes on soda for the next 12 years.

If California's soda tax ban had gone to voters and been approved, it would have made it more difficult for the state's cities and counties to raise any type of taxes. So, say the state's legislators, they opted to give in to the beverage industry to protect local jurisdictions' taxing ability and flexibility in other areas.

"This industry is aiming a nuclear weapon at government in California and saying, 'If you don't do what we want we are going to pull the trigger and you are not going to be able to fund basic government services,'" California State Sen. Scott Wiener, a Democrat from San Francisco, told the Associated Press.

The Golden State's move is similar to recent bans in Arizona and Michigan. Oregon, like possibly Washington, will vote on such restrictions in November.

On a more local level, Cook County officials implemented a tax on sugary beverages last summer. But after immediate and intense anger from Chicago area residents, repealed the penny-per-ounce soda tax a few months later. 

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