California Rules in Favor of Sugary Drink Tax, Rejects Penalty Clause of State Preemption Law

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California can no longer punish cities for enacting sugary drink taxes, as per an October 2021 court ruling that declared the penalty provision of the state’s Keep Groceries Affordable Act of 2018 unconstitutional.

The lawsuit was filed in 2020 by Cultiva La Salud and supported by ChangeLab Solutions and the American Heart Association.

The implications of the ruling are widespread throughout the state. Charter cities, which include many of the largest cities in the state, can consider taxes that aim to reduce purchases of sugary drinks and help community nutrition with the revenue without the fear of punishment.

Before this, the state could penalize a charter city that enacted a tax on sugary drinks by depriving the city of its sales tax revenues. Sales taxes often account for more than a third of cities’ general fund revenues.

This is especially important as sugary drink advertising disproportionately targets Latino and Black youth, and overconsumption of sugary drinks can lead to health risks like obesity.

Let’s learn more about what a sugary drink tax is, what has happened since the first such tax arrived in Berkeley, Calif., and how it affects local Latino communities.

What is a Sugary Drink Tax?

A sugary drink tax aims to reduce the consumption of sodas, juices, sports drinks, and other high-sugar beverages by raising their price through taxes.

Overconsumption of sugary drinks is a big problem for kids, especially Latino youth.

“Latino kids who consumed sugary drinks had 2.3x the odds of severe obesity. Latino toddlers ages 2-4 who didn’t consume sugary drinks had 31% lower odds of obesity than those with a high intake,” according to a Salud America! research review.

Latino and Black kids are also more likely to be targeted by marketing from the beverage industry.

Cities want to take action and improve public health by enacting sugary drink taxes. With the tax revenue, cities can funnel money towards local health programs.

Several cities across the U.S. have enacted sugary drink taxes successfully.

This includes:

  • Berkeley, Calif. (11.4% Latino): This city implemented the first U.S. sugary drinks tax. The Praxis Project’s video series shows how tax revenue is making people healthier, from schools to families to the arts.
  • San Francisco (15.2% Latino): Revenue from the 1 cent-per-ounce tax funds preventive health services in low-income communities. It also funds programs to improve school nutrition and oral health.
  • Seattle (18.3% Latino): Revenue from the 1.75 cent-per-ounce tax funds programs that help low-income people buy healthy food. It also helps subsidize schools and childcare centers to increase servings of fruits and vegetables.
  • Philadelphia (15.2% Latino): A 1.5-cent-per-ounce Sweetened Beverage Tax took effect January 2017. The measure is working, health experts say. Revenue is going to early childcare programs. It also is improving local parks, though progress is slow.
  • Other cities have passed such taxes, including Albany and Oakland, Calif., as well as Boulder, Colo. They are also funding public health prevention programs.

How Does it Affect Your Community?

Sugary drink taxes are making a big difference in public health.

A soda tax can reduce purchases of sugary drinks, according to a recent study from Mathematica Policy Research and others.

Researchers found a slight decrease in consumption, too.

Lower-income children in Seattle are drinking less soda than before the soda tax. But so are children who live outside the city, The Seattle Times reports.

California Rules in Favor of Sugary Drink Tax, Rejects Penalty Clause of State Preemption Law

In Philadelphia, a new study from Drexel University found that a year after the soda tax, 39% of participants inside the city and 34% of participants from neighboring areas said that they had consumed fewer sugar-sweetened beverages.

“Although this proportion may seem significant, for Philadelphians, it actually only translates to consuming three fewer drinks per month,” according to the study, wrote Medical News Today. “This is not at all a drastic change from the trends at baseline.”

In low-income neighborhoods across San Francisco, Oakland, and Berkeley, Calif., water consumption is increasing. Soda consumption has decreased.

A 2017 study indicated that residents are buying fewer sugary drinks, water sales are up 16%, and grocery bills have not gone up.

“This positive impact is magnified by the fact that the revenue from the tax is being invested in health and wellness across the city,” said Nancy Brown, CEO of the American Heart Association.

How Did the Sugary Drink Tax Pass in Berkeley, California?

Berkeley, California was the first U.S. city to enact a sugary drink tax.

The tax was enacted by the work of community advocates like Xavier Morales, then-leader of Latino Coalition for a Healthy California, who is now the Executive Director of Praxis Project.

He and other health advocates believed adding a small tax to sugary drinks had potential to both reduce consumption and disease—and increase healthy programs in Berkeley.

“We wanted to disincentivize the consumption of sugar-sweetened beverages, but at the same time we wanted to generate resources so we could go out and support school-based and community-based efforts to prevent chronic diseases,” Morales said.

In February 2014, they formed Berkeley vs. Big Soda—a broad coalition of community groups, academic researchers, medical professionals and parents—to propose a local one-center-per-ounce tax on sugary drinks.

They mobilized support and brought the issue to the Berkeley City Council in February 2014.

The council agreed to add the sugary drink tax to a community poll assessing possible ballot measures for the November 2014 election.

The community poll revealed that a tax on sugary drinks would have enough support to warrant a vote, and on July 1, 2014 the council approved adding the measure, officially known as Measure D, to its November 2014 ballot.

Despite opposition and campaigning from the soda industry, Morales and his supporters helped get the measure passed in November 2014, with 76% of residents supporting a sugary drink tax.

What Has Happened Since the Campaign Passed in 2014?

Since the measure passed in Berkeley in 2014, the campaign has faced strong opposition.

After intense lobbying from the beverage industry, California passed the Keep Groceries Affordable Act in 2018, a measure intended to prevent and punish cities enacting sugary drink taxes until 2031.

This measure was a preemption law, preventing cities and counties from adopting any new taxes on sugary drinks until January 1, 2031. Charter cities that adopted a new or increased sugary drink tax also risked losing their sales tax revenues.

In 2020, proponents of sugary drink taxes took legal action against the state measure.

soda tax sugary drink tax shopper latina woman grocery storeCultiva La Salud, a California-based organization working to advance health equity, and a member of the Santa Cruz City Council, filed a lawsuit that claimed the penalty provision of the 2018 Keep Groceries Affordable Act was unconstitutional.

This lawsuit was supported by the American Heart Association and ChangeLab Solutions, two organizations that often back health equity causes.

On Oct. 1, 2021, the Sacramento County Superior Court ruled in favor of the sugary drink tax proponents, declaring the penalty clause was unconstitutional.

“Thanks to this landmark ruling, cities across California can once again enact public health policies like sugary drink taxes without fear of unlawful punishment,” said Martine Watkins, the plaintiff who is a Santa Cruz City Council member, according to a press release. “Across our state, sugary drink tax revenues are being reinvested directly in the health of local communities. We’re now one step closer to more California residents being able to reap the benefits of these types of policies.”

How You Can Help Reduce Sugary Drink Consumption?

The win in California is a step toward reducing overconsumption of sugary drinks and harmful marketing from the soda industry.

There are more ways we can help fight the negative consequences of overconsumption of sugary drinks.

Here are 5 pediatrician-approved recommendations to limit sugary drinks for kids:

  1. Raise the price of sugary drinks.
  2. Reduce sugary drink marketing to children and teens.
  3. Remove sugary drinks from kid’s menus. Emphasize healthy drink options.
  4. Add accurate nutrition labels and information.
  5. Hospital should serve as models with policies to limit or discourage purchase of sugary drinks.

Salud America! also created an Action Pack to help school leaders push for Water Bottle Fountains. This refillable water station can boost access to water for Latino and all kids.

ADD A WATER BOTTLE FOUNTAIN!

Explore More:

Healthy Food, Water

By The Numbers By The Numbers

1

Supermarket

for every Latino neighborhood, compared to 3 for every non-Latino neighborhood

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