California cities and towns are now banned from enacting taxes on soda — thanks to a new state law.
A similar bill that would eliminate Philadelphia’s tax on soda and other sweetened beverages is pending in the Pennsylvania House. But it’s less likely to become a reality. Legislators have taken no action on it since the bill passed out of committee in May.
“With the limited number of days left in session, I do not feel there is a realistic shot to move the bill,” its primary sponsor, Rep. Mark Mustio (R., Allegheny), said in a statement Wednesday.
Even if it doesn’t pass, the proposed bill, the California law, and similar measures under consideration in other states show that the beverage industry is taking its fight against soda taxes to state governments. Success in statehouses across the country would allow the beverage industry to prevent or repeal taxes on soda rather than lobbying local governments in every town where leaders consider passing one.
American Beverage Association spokesperson Lauren Kane said that beverage companies employ and support thousands of people and businesses who are hurt by taxes on soda and other groceries.
“That’s why we are standing with local businesses and consumers as supporters of local, broad-based coalitions that keep groceries more affordable for people everywhere,” Kane said in a statement.
Philadelphia became the first major U.S. city to pass a tax on sweetened beverages in 2016. But California is home to the first soda tax; Berkeley passed one in 2014. Several cities across the country have followed and passed their own versions of the levy.
Berkeley, San Francisco, and other California cities that already tax soda and sweetened beverages can keep their taxes under the new law passed at the end of June, according to the Los Angeles Times. Other municipalities are banned from passing taxes on groceries for the next 12 years.
The bill proposed in Pennsylvania, however, would eliminate Philadelphia’s tax by banning any levy on food, beverages, or food and beverage containers. The city’s 1.5-cents-per-ounce tax pays for pre-K programs, community schools, and the Rebuild initiative to improve parks, libraries, and recreation centers. Both its supporters and opponents have poured money into the ongoing legal and public relations fight over the Philadelphia tax, and its fate is pending before the Pennsylvania Supreme Court.
Mayor Kenney traveled to Harrisburg last month to lobby against the bill, which has the backing of the beverage industry. While Philadelphia is the only city with a tax on soda, his administration has emphasized that the legislation would limit the local control of every municipality in the state.
“Jurisdictions across the commonwealth have different needs, and for decades, the General Assembly has understood this and empowered local governments through Home Rule,” city spokesperson Mike Dunn said in a statement. “This legislation usurps that power. This is a dangerous precedent to set, especially at a time when voters are showing their support for more local control over matters.”
Gov. Wolf, a Democrat, opposes the bill, according to his spokesperson, J.J. Abbott.
While the governor “is a strong supporter of early childhood education,” Abbott said in a statement, Wolf has generally opposed preemption laws, adding, “We do not believe Harrisburg politicians should override the legal activities of local municipalities, where those elected officials are directly accountable to their constituents.”
In California, however, the new law to prevent taxes on soda gained approval from the Democratic-controlled legislature and was signed by Democratic Gov. Jerry Brown. Some lawmakers told reporters in California that they supported the bill only because their hands were tied; the beverage industry had also supported a statewide referendum that, if approved this fall, would have made it harder to pass any new local or state tax. The referendum, which was removed from the November statewide ballot in exchange for passage of the soda tax ban, would have required a two-thirds majority of lawmakers or voters to approve a new local or state tax of any kind.
“The passage of preemption legislation in California demonstrates the lengths to which the beverage industry will go in their national and multi-tentacled battle against such taxes,” Dunn said in a statement Wednesday. “The industry put California legislators in an untenable position by threatening them with a far more onerous ballot question.”
The beverage industry, meanwhile, defends the California law. Kane, the spokesperson for the American Beverage Association, said the group wants to help reduce sugar consumption without harming working families, costing jobs or hurting small businesses.
“We believe the legislation approved in California will allow us to work toward those goals,” she said.
In Pennsylvania, the bill to preempt local taxes on food and beverage will remain in limbo until it either receives a vote or the legislative session ends later this year.