Proposition E, a 2 cent per ounce tax on the purchase of sugary beverages that was heavily opposed by the American Beverage Association, was defeated at the polls Tuesday when fewer than two-thirds of voters supported the proposal.
The tax was proposed to combat health-related illnesses like obesity and diabetes. It drew the support of the majority of the Board of Supervisors, which voted to place it on the ballot, and a number of health organizations, such as the American Heart Association and the California Dental Association.
The American Beverage Association, which represents the large soda companies, had raised $7.7 million as of Sept. 30 to oppose the measure. The group's campaign had seized upon San Francisco's rising cost of living and growing income inequality, and had suggested in ads that the tax would increase the cost of groceries and meals at restaurants.
It is estimated that San Francisco consumes about 3 billion ounces of soda and other sugary beverages annually and that a 2 cent per ounce tax would decrease consumption by as much as 31 percent, according to a City Controller's Office report. Estimates said the tax could generate as much as $54 million a year.
Since the measure specified how the tax money would be spent — on such things as nutritional school lunches, dental care for low-income residents, increased recreation center hours and water-bottle fill stations — it required a two-thirds majority of votes to pass.
Supervisor Scott Wiener, one of the most outspoken supporters of the soda tax, looked at Tuesday election results in a positive light despite losing. “The soda industry got a double black eye today,” Wiener said. “While we didn't get to 2/3, a majority of voters supported the soda tax despite $10 million in corporate spending against it. No city has ever even gotten close to a majority vote, and tonight Berkeley won in a landslide and San Francisco got a majority.”
Supporters had argued that “if we do nothing to address this emerging health crisis, 1 in 3 children today will develop Type II diabetes in their lifetime; for children of color the risk is 1 in 2.”
Opponents argued that the tax was unwise in a city where families are already struggling to get by amid rising rents and cost-of-living and questioned whether the funding would result in any effective programs.
The vote came two years after residents in the nearby city of Richmond rejected a similar tax measure by more than 60 percent.
Last year, Mexico adopted a 1-peso-per-liter tax on sugary drinks that took effect this year.
But in the U.S., past efforts to curb soda consumption have failed.
Michael Bloomberg, the former mayor of New York, planned to ban the sale of large sodas, but a judge struck that down last year. And also last year, voters in Telluride, Colo., opposed a soda tax.
A 2012 UC San Francisco study found that a penny-per-ounce tax on sweetened beverages “would reduce consumption of these beverages by 15 percent among adults ages 25-64.” Such a tax nationwide could “prevent 2.4 million diabetes person-years, 95,000 coronary heart events, 8,000 strokes and 26,000 premature deaths, while avoiding more than $17 billion in medical costs.”