San Francisco’s Missed Opportunity to Pass Anti-Obesity Soda Tax

Written by Ralph E. Stone. Posted in Healthcare, Opinion, Politics

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Published on November 19, 2014 with 13 Comments

Proposition E, San Francisco's effort to curb obesity, failed to pass due to a failure of imagination.

Proposition E, San Francisco’s effort to curb obesity, failed to pass due to a failure of imagination.

By Ralph E. Stone

November 19, 2014

It is now old news that San Francisco’s proposed Soda Tax (Proposition E) did not pass and Berkeley’s (Measure D) did.  Proposition E would have placed a two-cent per ounce tax on sugar-sweetened beverages while Berkeley’s Measure D will now place a one-cent per ounce tax.

Proposition E required a two-thirds majority to pass because the tax revenue would have gone into a special fund for recreation and nutrition programs in schools and parks.  Proposition E received 55 percent of the vote, less than the two-thirds requirement for passage.

Berkeley’s Measure D required only a majority to pass because the tax funds will go into the general fund. Measure D passed easily with 75 percent of the vote.

Why the interest in a soda tax?  Research has shown that reducing sugar-sweetened beverage consumption would reduce the risk of obesity, type 2 diabetes, heart disease and other chronic health problems.

What is puzzling is why the authors of Proposition E chose to have the tax proceeds go to a special fund rather than to the general fund, thus requiring a two-thirds majority to pass.

According to San Francisco Supervisor Scott Wiener, who spearheaded the legislation, “Had we gone with a general tax, Prop E would have lost badly.  We would have been lucky to get more than 40% of the vote.  San Francisco isn’t Berkeley.  For many people, what moved them from skepticism to yes were the guaranteed and important uses.”

I am not sure I agree with Supervisor Wiener.  Surely, emphasizing the consequences of sugar-sweetened beverages resonated with voters as much as where the tax funds would have gone.

The Proposition E authors knew or should have known that the American Beverage Industry would spend heavily to defeat the measure.  In fact, the ABI spent more than $10 million to defeat Proposition E.  In retrospect, the authors of Proposition E misread the voting public as to whether they would support a tax for general purposes which would require only a simple majority for passage.

The bottom line: Berkeley now has an anti-obesity soda tax and San Francisco does not.

Ralph E. Stone

Ralph E. Stone

I was born in Massachusetts; graduated from Middlebury College and Suffolk Law School; served as an officer in the Vietnam war; retired from the Federal Trade Commission (consumer and antitrust law); travel extensively with my wife Judi; and since retirement involved in domestic violence prevention and consumer issues.

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  • Flubert

    No, I think Wiener is correct. The main purpose of any tax is to raise revenues, and a big part of the point of Prop E was that those revenues were targeted towards healthcare and combating the harm done by soda. Take away that special purpose and you just have the money going to the General/slush fund, ending up who knows where.

    So if Prop E had been non-targeted it would most likely have failed to pass the 50% threshold.

    More generally a tax whose main purpose is to punish those who don’t behave as the government tells them puts off many liberals who otherwise support higher taxes. It offends the sensibilities of those who cherish personal freedom. The same argument can of course be made against special taxes on alcohol, tobacco, gambling or any so-called sin tax.

    Throw in the fact that the tax was successfully painted as being regressive and it was a far from perfect voter initiative. But gutting the proposal in an unseemly bid to lower the required majority isn’t the right way either, even if it worked in Berkeley, where it passed by more than 2/3 anyway.

    Better to try again with better language and more powerful and persuasive arguments.

  • Ralph E. Stone

    Flubert, as I understand your argument, Proposition E needed better language and more powerful and persuasive arguments to pass. You are in effect saying that the co-authors did a lousy job in putting forth a Proposition that at best, had a long shot of ever getting a 2/3 majority. I don’t believe no matter how well written that goal is achievable. And the purpose of sin taxes is primarily to eliminate or ameliorate the sin, rather than raise revenue. I would like to see a poll of voters as to whether they really cared where the tax funds were going. I bet most didn’t care one way or another.

  • FriscoSF

    Agreed. It was foolish to submit a proposition that needed 2/3rds for passage. A straight majority would have voted for this proposition. Try it again without the 2/3rds requirement. Wiener is normally a pretty good Supervisor, but he screwed up this time

  • Richmondman

    Too bad the soda tax was not approved (not). We could have rid all of the mom and pop grocery and liquor stores in the city, since these are the businesses that would have paid the tax (not “BIG SODA”) and suffered the loss of business. Does the city have a tax on beer, cigarettes, liquor or pot? Hell no.Yet you could argue that the city spends more money on health issues related to these “sins” than sugar. How about taxes on juice – lots of sugar there. Or candy – lots of sugar there too. And don’t forget about breakfast cereals, ice cream. Prop E should have stated the money would go to the general fund – because that is were it would have ultimately ended. It would be just another “bait and switch” tax. Another knee-jerk piece of legislation proposed by the most foolish BOS in the world.

  • Yes, the soda tax did not pass in San Francisco, and similar measures have been defeated in more than 30 cities and states across the country. This is reflective of the broad opposition to taxes on common grocery items – a fact that many studies have also reinforced. For example, a Harris Interactive/Health Day poll (http://bit.ly/1pluHQp) determined that 62 percent oppose taxing sugar-sweetened beverages. In other words, while Berkeley passed a tax, it’s clear that this position is not shared by mainstream America – and such a measure won’t deliver measurable or meaningful results either.
    -American Beverage Association

    • SarahBJones

      ya’ll gettin scuuuuuuured

  • Ralph E. Stone

    ABI, the fact that a majority of voters in San Francisco and 75 percent in Berkeley voted for the soda tax contradicts your argument that voters do not favor a tax on sugar-sweetened beverages. Why is the ABI spending so much money to defeat a tax on products that are so harmful to our health.

  • Richmondman

    What is shameful is to try to sell voters that this was not a tax on small Mom and Pop businesses. Instead, they tried the old “bait and switch”. Tell people that this is a tax on “BIG (bad) SODA”, when in reality Big Soda would pay ZILCH. Who would pay? Every Mom and Pop store owner in San Francisco. This is another badly written law that preys on the poor and those with little education and language skills – like CleanPowerSF in its’ original form – which also LOST.

    • Granted, Prop E’s passage threshold was a major goof, but the underlying effort to curb sugary drinks consumption was well intended.

      But let’s agree on one thing: there is an obesity and diabetes epidemic in the U.S so any and all efforts to reduce sugar consumption is a good thing, no?

      Furthermore, tariffs and subsidies are the mechanisms employed by governments to discourage or encourage certain behaviors. Beats me why Sacramento doesn’t employ these mechanisms to deter dirty fossil fuel use (via tariffs) while encouraging rapid deployment of renewable energy systems (via subsidies).

      • Richmondman

        It wasn’t just the threshold – the entire law was flawed. It fails to address other “unhealthy” sugar sources – ice cream, candy, cookies, cereals, etc, plus it placed the burden squarely on small businesses.
        The city banned the sale of bottled water on city-owned property, and then tried to DOUBLE the price of the primary alternative to bottled water. I hope you can connect the dots here.
        There was no guarantee that “health programs” would see even $1 more in funding; it was ripe for a bait and switch.
        Does the city tax small businesses (over and above normal) for liquor sales? Tobacco? Candy? Cookies? No – that is a sure sign that this was a poorly written measure. As usual.

  • Rainforester

    Because Phil Ginsburg wanted funds, and Scott Wiener was providing them.

    The tax itself is regressive and way too high!

    • Richmondman

      This had nothing to do with Phil Ginsburg, and everything to do with the progressive food nazis and supporters of big government, like Eric Mar who feel the need to protect us poor uneducated folks from “BIG SODA”.

      • Rainforester

        Wrong!

        This was Wiener’s initiative and Wiener makes neocoms look liberal.

        Mar is not a “progressive” (whatever that means),

        A % of the tax would go to Phil Ginburg so he could hire yet more publicists so they can pretend RPD is using the money to help low income youth. 🙁