Matt Wuerker Soda fight's last stand

BERKELEY, Calif. — Here in one of the most liberal corners of the nation, health advocates are preparing for what could be their last stand in the battle over taxing soda.

Voters in San Francisco and Berkeley will consider a 1 or 2 cents per ounce sin tax on sugar-sweetened drinks on the ballot in November.


If the tax passes in one of the two cities, as polls show it might, it’ll be the first loss for the beverage industry, which has emerged undefeated in more than 30 similar fights in states and cities, from Maine to El Monte, California in recent years.

The industry is all in, pouring at least $2 million into the fight already, to hold its perfect record. If it can beat back this latest threat in a liberal haven, it could very well kill soda taxes, once and for all, by discouraging other cities and states from even trying.

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“If a soda tax can’t pass in the most progressive city in America, it can’t pass anywhere. Big Soda knows that, which is why it’s determined to kill it here,” wrote former Labor Secretary Robert Reich, who is now a professor at the University of California Berkeley and a supporter of the tax, in a recent op-ed.

The debate over the sin tax pits those who believe it is needed to help stem the rise of obesity and diabetes and fund health programs and those who believe taxing beverages — the source of just 6 percent of American’s daily calories — is not only government overreach but a regressive tax that would further drive up the cost of living. So far, the beverage industry has successfully argued that taxing sugary drinks is bad for consumers, bad for business and useless for addressing the country’s diet-related health crisis.

In New York City, the fight was over beverage size limits proposed by former Mayor Michael Bloomberg, and the soda industry won that time, too.

The American Beverage Association has funneled significant support into the “No” campaigns through its California PAC for extensive political research, billboards and a whole lot of direct mail. The group launched a major cable, broadcast and radio blitz Tuesday. TV ads, which urge people to vote no on San Francisco’s Proposition E, will run in Spanish, Cantonese and English.

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Roger Salazar, a spokesman for both No campaigns, declined to provide a dollar amount for the recent TV buy but said “everybody will see it.”

The No campaign’s San Francisco TV ads were made by Goddard Gunster — a creative firm well-known for the Harry and Louise spots attacking health care reform in the 1990s — which also produced ads in opposition to Bloomberg’s soda size crackdown. Election filings show the firm has been paid nearly $950,000.

All of the TV and radio ads use female narrators and focus on prices.

“Two pennies per ounce on sugar sweetened beverages can really add up,” the narrator says in one of the ads running in San Francisco. “A 12-pack of soda would cost $3 more. Some beverages could go up 75 percent. Businesses would lose $60 million in revenue and nearly $6 million dollars of the tax would be paid by families with an annual income of less than $20,000.”

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But Bay Area residents don’t need to turn on the TV to see signs of the battle. San Francisco is awash with anti-tax billboards, including one that looms large alongside the Giants baseball park. It features Taylor Peck, co-owner of The Fizzary — an “urban menagerie of soda” — declaring he is “voting No on E.”

The Yes on Proposition E campaign is fighting back with about $275,000, including $50,000 in donations from billionaire couple Lisa and John Pritzker. The Yes team is focused heavily on its ground game.

In Berkeley, a city of 112,000, the No on Measure D campaign has already brought in $800,000 — roughly 10 times what the Yes campaign has raised — a war chest that locals say is blowing away previous election spending records.

“This is totally unprecedented,” said Larry Tramutola, a political consultant for the Yes on D campaign, who noted, for comparison, that a Berkeley mayoral candidate would be in good shape if they raised $200,000. “We’ve never seen anything like it. Are we scared? You betcha.”

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But Tramutola notes that Berkeley’s Measure D also has “unprecedented” local political support. All eight city council members support the measure, along with the mayor and all of the political candidates, he said. Around town, you can’t miss the orange “Berkeley vs. Big Soda” signs dotting lawns.

And pro-tax organizers think the flood of cash has backfired in some cases. As Berkeley voters have been bombarded with phone calls and canvasser visits, more have also been stopping into the Yes campaign headquarters on the main drag downtown asking for yard signs, according to Sara Soka, campaign manager for the Yes on Measure D, which calls itself “Berkeley vs. Big Soda.”

“People are upset that Big Soda is knocking on their door,” said Soka, who added that the money coming in is overwhelming. “It’s like they’re dumping soda on us, trying to wash us away.”

Of the two ballot initiatives, Berkeley’s Measure D seems to be a bigger threat to beverage interests, even as the No campaign hammers advocates for writing a ballot measure that they say is so riddled with loopholes and exemptions that “it’s just an exercise in vanity.” Campaign mailers note that a 360-calorie milkshake would not be covered, but a lightly sweetened 35 calorie coconut water would be. Dairy products are mostly exempted under both proposals but sports drinks, sweetened teas and energy drinks would be covered.

The Berkeley initiative, which would levy a penny-per-ounce tax, requires only a simple majority because the $1 million -$3 million it could raise each year would go into the city’s general fund. Two city-commissioned polls in March and April indicated that between 53 and 66 percent of likely Berkeley voters were in support of the tax, with 28 to 38 percent against.

The No campaign’s Salazar declined to share any of his own polling data, but said the No effort is tracking public opinion in Berkeley and is “pleased with the direction things are going.”

There’s no question it’s going to be tougher in Berkeley,” he said.

Across the bay in San Francisco, Proposition E requires a two-thirds vote because the $30 million or so it could raise each year from a 2-penny-per-ounce tax is dedicated to funding nutrition and physical education programs at local schools, and other projects like water-bottle-filling stations. A 1978 state law requires the higher margin if special taxes are earmarked.

The most recent public poll in San Francisco, taken in May, found 54 percent in support of the measure and 44 percent opposed — well short of the vote needed.

Karen Hanretty, a consultant for the No campaigns, said her side is feeling somewhat more confident in San Francisco, despite the industry facing its first professionally run pro-tax campaign. The No on E campaign’s more recent polling shows support for the tax remains short, similar to what was reflected in the May poll.

Campaign consultants Maureen Erwin and Maggie Muir of Erwin & Muir, who are running the Yes on E campaign pro bono, are formidable opponents, said Hanretty, who has been involved in several efforts to defeat soda taxes. Erwin & Muir boasts a 90 percent win record, including a number of initiatives that required two-thirds approval.

Also, the San Francisco Yes on E campaign has built a broad coalition, including unions, nurses, teachers and PTAs. Organizers for the Yes sides in both cities maintain that they are strong because their coalitions and their volunteer base is truly grass roots; the opponents have an army of paid canvassers.

For example, Erwin said she knew ahead of time that the opposition was working on a TV ad because one of her volunteers — an actor — received a casting call and alerted her.

Similarly, the Yes on Measure D campaign knew about extensive focus groups being conducted in Berkeley because it heard from those who volunteered to participate. Pamela Gray, a volunteer for Yes on Measure D, said her daughter participated in one of the focus groups out of curiosity, then took the crisp $100 bill she was given for her time and promptly donated it to the Yes campaign.

Based on what they’ve gathered, Tramulta estimates the No on Measure D campaign has spent somewhere in the neighborhood of $125,000 just on political research in Berkeley. The No campaign has declined to confirm the number, instead noting that the City of Berkeley used $52,000 of taxpayer funds to “test the waters for Measure D.”

That Berkeley or San Francisco could reignite interest in soda taxes in other parts of the country is a nerve-wracking — and potentially very expensive — prospect for an industry that has maintained a 100 percent win rate so far. An economist for the City of San Francisco estimates that Proposition E would raise the price of sodas between 23 percent and 36 percent and reduce consumption by 31 percent.

The No campaign, however, questions whether the liberal bastion really has national pull. “No matter what happens in Berkeley, Berkeley is Berkeley. It’s not a precedent-setter,” said Salazar.

Pro-tax activists in the Bay Area, of course, disagree. They view themselves as decades ahead of the curve. Talk to anyone plugged into the political scene and they will remind you Berkeley was ground zero for the student free speech movement and led the charge for disability rights.

“We’re just early adopters,” said Tramulta. “We will succeed, whether it’s this time or in the future.”

“This isn’t a local campaign. This is a national campaign. If we pass ours, other cities will have it on the ballot.”