No need to uncork Champagne; beverage industry leaders might rather pop sodas to celebrate the defeat of State Sen. Bill Monning's, D-Carmel, proposed soda tax in the California Senate Committee on Appropriations Thursday.
SB 622 would've placed a penny-per-ounce excise tax on sugar-sweetened beverages in California, generating an estimated $1.7 billion annually to fund children's nutrition and phys ed programs, intended to battle obesity in California.
Appropriations held the bill back due to the start-up costs to the Board of Equalization of administering a new tax. That means the bill can still be revived next year.
“I remain committed to enacting SB 622, as it will improve children’s lives and significantly reduce the amount Californians will pay to treat chronic diseases,” Monning said in a statement.
Monning proposed a similar tax as an assemblyman about two years ago, which similarly never advanced to a floor vote. He expressed optimism that this time around it would be different.
“It’s a little bit of a different playing field now,” Monning told the Weekly.
The beverage industry has rallied against sugary-drink taxes, leveraging the American Beverage Association PAC to battle two 2012 local ballot initiatives that would've taxed soda, in the cities of El Monte and Richmond. (Voters defeated both.)
Appropriations Committee Chair Sen. Kevin de León, D-Los Angeles, reported a $1,000 contribution from the lobbyist California Beer & Beverage Distributors in 2011.
American Beverage Association Spokesman Chuck Finnie says the tax would be less effective than supporters have portrayed it would be, because it would tax distributors, who may not pass the full penny-per-ounce on to consumers. Instead, they could absorb that cost by increasing the price of other products, or laying off workers, Finnie says. "The argument that a tax like this is go to change consumption habits is ridiculous."