Judge Rules Berkeley Must Change Soda Tax Language

Update September 2, 6:05 p.m.: A judge ruled Tuesday that Berkeley officials must change the soda tax measure language because it is currently misleading.

Alameda County Superior Court Judge Evelio Grillo said the city's statement that the tax would only be imposed on "high-calorie, sugary drinks" is "a form of advocacy and therefore not impartial."

Grillo ordered the city to change the summary to say that the tax would apply to "sugar-sweetened beverages," which he said is more neutral and less likely to create prejudice for or against Measure D.

Anthony Johnson and Leon Cain filed the lawsuit in August. Cain has previously attended Berkeley council meetings on behalf of the No Berkeley Beverage Tax campaign.

Tax opponents had also argued that ballot language that says the tax would be paid by distributors, not by consumers, is misleading because they believe distributors would pass on the extra cost to consumers.

But Grillo ruled against tax opponents on that issue, saying they failed to provide clear and convincing evidence based on the ballot statement that the tax won't be paid by consumers is misleading or partial.

The judge said tax opponents "only speculate that it is like that such cost will be passed down to consumers, but it is unknown at this point whether or not any of the tax will eventually be passed down to consumers."

Grillo said the city correctly pointed out that distributors and retailers could choose to absorb the cost of the tax in order to better compete with other businesses.

Berkeley school board member Joshua Daniels, who is co-chair of the campaign in favor of Measure D, said Grillo's order that the ballot language be changed is only a "relatively minor" development and "doesn't concern us at all" because "everyone knows that the measure is focused on preventing diabetes," and he thinks it will still be approved.

Daniels said that overall Grillo's ruling is "a victory" for Measure D supporters.

Grillo's ruling came one day before the deadline on Wednesday for the Alameda County Registrar of Voters Office to send ballot arguments to the printer so that voters can receive them well in advance of the election on Nov. 4.

Original Post July 2, 2014  

By Charles Siler, Berkeleyside

Berkeley City Council voted unanimously Tuesday night to include a proposal that would tax distributors of sugar-sweetened beverages on the November ballot.

The measure, which proposes a one-cent-per-ounce charge at the distributor level, would be the first such tax passed in the country. Richmond tried to pass a similar tax in 2012, but it was voted down after a $2.7 million campaign by the soda industry.

Supporters of the tax point to studies linking sugary drinks to childhood obesity and diabetes. Members of community organization Berkeley vs. Big Soda gathered on the steps of city hall before the Tuesday night meeting to voice their support of the tax.

“We want to support our kids. We don’t want our kids to be sick with diabetes,” said Dr. Vicki Alexander, co-chair of the Berkeley Healthy Child Foundation, at the council meeting. “We know that we can change that trend.”

Opponents of the tax said the measure would prove ineffective.

“I agree that diabetes and childhood obesity are big issues. I just don’t necessarily agree that taxation on sweetened beverages or soda is the best way to deal with that,” said Jennifer Skidmore of J&J Vending. “Statistics show that purchasing of sweetened beverages is already on the decline, without taxation.”

Supporters also say the tax is a social justice issue, pointing to the higher rates of obesity in black and Latino communities.

“Research shows diabetes rates in Latino, African-American communities have reached epidemic proportions,” said Xavier Morales, executive director of the Latino Coalition for a Healthy California. “That’s not an exaggeration.”

“Big Soda will claim that we are attacking a product that is beloved by low-income folks,” said Councilmember Laurie Capitelli, “but those are the people who are coming to us and asking us to put this on the ballot.”

Ted Mundorff, CEO and president of Landmark Theaters, which owns both the Shattuck Cinemas and the California Theater, said revenue from the tax would not be earmarked for any healthy initiatives.

“If we could solve obesity and diabetes with a one-cent tax I’d say bring it on, let’s do two cents,” Mundorff said. “But the reality is that this cent is going into the general fund, and it is not earmarked to do anything, except to hurt business.”

Because the measure proposes a general tax, as opposed to a special tax, revenue from the tax would go into the general fund and cannot be reserved for any special purpose. With a special tax, the money could be designated for anti-obesity initiatives, such as nutrition programs in schools — but a special tax requires a two-thirds majority vote, while a general tax requires only 50 percent plus one.

The sugar tax on San Francisco’s November ballot is a special tax, and so will require a two-thirds majority to pass, unlike the Berkeley proposal. The San Francisco measure also proposes a tax of two cents per ounce, rather than Berkeley’s one.

Berkeley’s November ballot will read: “Shall an ordinance imposing a 1¢ per ounce general tax on the distribution of high-calorie, sugary drinks (e.g., sodas, energy drinks, presweetened teas) and sweeteners used to sweeten such drinks, but exempting: (1) sweeteners (e.g., sugar, honey,syrups) typically used by consumers and distributed to grocery stores; (2) drinks and sweeteners distributed to very small retailers; (3) diet drinks, milk products, 100% juice, baby formula, alcohol, or drinks taken for medical reasons, be adopted?” Councilmember Linda Maio proposed the new, slightly different language at the Tuesday meeting.

Supporters of the tax acknowledged that in the coming months, the soda industry will likely campaign heavily against the tax measure in Berkeley and in San Francisco.

“I don’t think even if they spent a million dollars they could confuse the people of Berkeley. So I’m not really worried about how much money they spend,” said Councilmember Kriss Worthington. “The people of Berkeley are too smart to be confused.”

“There’s going to be a lot of opposition, there’s going to be lot of lies,” said Mayor Tom Bates. “They’re going to be sending people door to door with distortions, with misinformation, and it’s going to be tough. So we all need to work. This is the beginning, this is not the end.”

KQED News Associate Berkeleyside is an independently owned news website based in Berkeley, Calif. Click here if you would you like to receive the latest Berkeley news in your inbox once a day for free with Berkeleyside’s Daily Briefing email.