Signs on Bay Area city soda tax referendums are pictured. | Helena Bottemiller Evich/POLITICO Soda's last stand

OAKLAND, Calif. — The rest of America may be fixating on Donald Trump vs. Hillary Clinton. But here in the liberal Bay Area, an even more divisive battle is playing out over the future of soda and the scope of the nanny state.

Residents in San Francisco, Oakland and Albany, Calif., are voting Tuesday on a referendum that would impose penny-per-ounce taxes on sugary drinks from Coca-Cola to Gatorade in what has become the most expensive city-level ballot fight ever waged in the United States.


The stakes could not be higher for the beverage industry, which fears being cast as the next tobacco — a public health pariah that is heavily taxed in cities and states across the U.S. The outcome is equally critical for health advocates, including billionaires Michael Bloomberg and Laura and John Arnold, who are flush from recent victories in Philadelphia, Berkeley and Mexico and who see the tax as a way to reduce sugar consumption in the fight against soaring obesity and diabetes rates.

Using the same media firm that ran the Brexit campaign, the powerful American Beverage Association has spent nearly $30 million to oppose the taxes. Proponents, meanwhile, have poured nearly $20 million into the effort, with most of it coming from Bloomberg, whose unsuccessful effort to ban super-sized sodas while mayor of New York City was pilloried.

So much cash has now streamed into the soda tax debate in the Bay Area — with millions dropping almost daily in the final sprint — that the campaigns could have given $40 to each resident across the three cities considering taxes. Polls show a tight race — although neither side will publicly share its data.

“It could very well be the turning point in how people perceive soda,” said David Goldberg, a spokesman for Healthy Food America, a nonprofit backed by the Houston-based Arnolds. “If one or more of these measures passes, there will be, if not a groundswell, a significant uptick in interest.”

The beverage industry is dismissive of the idea that what happens in California will spread like wildfire. “I just don't see something passing in the Bay Area sweeping the State Capitol in Des Moines — or pick another mainstream city or state,” Susan Neely, president and CEO of the industry trade group, told POLITICO.

But advocates see their effort as the beginning of a movement — another cause that California can export, like recycling, gay rights and smoking bans.

“We’re already hearing from a lot of places that are interested [in soda taxes] and they are all watching closely,” Goldberg said.

If a tax is approved by voters in either Oakland or San Francisco, it would be a first for a major city in the U.S. and would move such a tax more into the mainstream.

Berkeley's 2014 passage of a soda tax was dismissed as an outlier. That same cycle, San Francisco didn’t approve a similar proposal -- 55 percent voted in favor, short of the two-thirds needed to pass the earmarked tax. This time, the initiative only needs a simple majority.

Meanwhile, In Philadelphia, it was the city council, not voters, that approved a sin tax to pay for universal pre-K in June. Now, as advocates turn their sights to Cook County in Chicago, where city officials have proposed a tax, they see an opportunity to make the idea mainstream for cities and states across the country.

Boulder, Colo., one of the fittest cities in America, is also voting on a soda tax Tuesday, and the fight there is also the most expensive that city has ever seen — by a long shot.

The tax battle out west has national and international implications, particularly after the World Health Organization last month urged governments to consider levying such taxes as a way to reduce sugar consumption. But it’s being waged here in Northern California at a hyper local level, block by block, bodega by bodega, in working class neighborhoods that are already being squeezed by unsustainable increases in the cost of living increases and rapid gentrification.

Residents have been bombarded with anti-tax television ads and have had glossy mailers overflowing their mailboxes. In recent weeks, pro-tax ads have joined the fray, too, in a big way. During game 7 of the World Series this week, Bay Area watchers saw ads for both sides.

Corner grocery stores are visibly divided. A few doors down from the “Yes on V” campaign headquarters in the Mission District in San Francisco, a historically Latino neighborhood, one bodega has a “Vote No on Prop V” signs in its window — right above a produce display of jicama and limes and right next to a line of Pepsi posters. “Enough is enough! Don’t tax our groceries!” the sign says.

On the same block, a liquor store, with plenty of sugary drinks in stock, is displaying a “Vote Yes on V” in its window amid posters for Dia de los Muertos celebrations.

The debate has been bitter, with both sides claiming the moral high ground.

Tax opponents — whose campaign is almost exclusively funded by the American Beverage Association, which represents PepsiCo, Coca-Cola and Dr. Pepper Snapple Group — include small grocers, retailers and restaurateurs who argue that a sugary drink tax is bad for business, and will hit hardest on already squeezed working-class residents.

“I’m not here representing the beverage companies,” says Abdul Taleb, who has run his Mi Carnal corner grocery store in a predominantly Latino Oakland neighborhood for a decade and is featured prominently in anti-tax advertisements. “I’m doing this because I think it’s unfair to low-income communities.”

Taleb, whose corner store boasts an impressive display of fresh produce and meats, says he wants to see incentives to encourage healthy food choices, not taxes that will increase the cost of living for his customers. He’s particularly upset that many of the people in his community that will be most affected by the tax don’t have the privilege of voting for or against it because they may work long hours or may not be citizens.

Taleb says he’s received threatening phone calls over his public opposition to the tax. Other store owners say they were tricked into appearing in opposition ads and have since come out in favor of the proposal.

“You are awful, I cannot believe you are advocating against the SODA TAX, not a ‘grocery tax’ as you were paid to say in the commercial I just saw...it is disgusting you are trying to hoodwink people,” wrote one reviewer to Grandma’s Deli & Cafe in San Francisco. (The campaign, which helps businesses remove such reviews, says it hasn’t paid any businesses to appear in ads.)

Among those most upset about the tax proposal is Aaron Pan, owner of Sweetheart Cafe, a Boba tea shop in Oakland’s Chinatown, which he says was the first cafe to serve Boba tea in the U.S. more than two decades ago.

“Very, very bad!” says Pan, with a thumbs down, of the tax proposal.

Pan, whose English is limited, has already been through a sugary drink tax. He also owns a Boba tea shop in neighboring Berkeley, Calif., which voted for a similar tax by a wide margin in 2014. That tax, combined with many other increased costs, from rent to a big bump in the minimum wage to garbage collection rates, led him to sell his shop in Berkeley, he says. Pan is also featured prominently in beverage industry-funded advertisements, in which he tells his story in Chinese with subtitles.

Like Taleb, Pan worries that kids are drinking too much soda, but doesn’t think the solution is a tax on all sweetened drinks, from Vitasoy to Chrysanthemum tea. He thinks people are being deceived into thinking that it’s only a soda tax.

On the other side, tax proponents are livid with the beverage industry for framing the soda tax as a grocery tax that would likely apply to produce, bread and other staples. While the tax would be levied at the distributor level, at the rate of one penny per ounce of sugary beverage, there is fierce disagreement about how it might be passed onto consumers. Technically, a retailer could decide to absorb the tax, or recoup the money by charging slightly higher prices for other goods, but tax supporters say that’s just not likely to happen.

“Big Soda has come to Oakland ... and they are already telling Big Lies!” reads a stack of bright red flyers in a field office. The handouts feature alarming health statistics: One in two African American and Latino children are likely to get diabetes. Nearly half of the adult population in Oakland already has diabetes or is pre diabetic.

Both sides of the tax fight have amassed small armies of paid phone bankers and canvassers, operations that have directly reached well over 200,000 people, though the pro-tax effort appears to have a much larger and more enthusiastic ground game.

Some of the young people working for the campaign are already familiar with the political playbook after having worked on the successful Berkeley tax effort. And many also have a personal connection to the issue.

Clem Howard, who lost her mother to diabetes in 2012, has been knocking on doors and calling voters on behalf of the soda tax since August.

“It’s so personal for me,” said Howard. She said her mother was essentially “addicted” to Coca-Cola, drinking one with nearly every meal, and ultimately needed limbs amputated and to go on dialysis several times a week. “I have seen how it can wreak havoc on the body,” she said.

Howard, who is African-American, said she’s gotten an overwhelmingly positive response, particularly when talking to black and Hispanic parents about the soda tax.

In a meeting at a campaign office set up in a Service Employees International Union hall on Wednesday, Larry Tramutola, the lead consultant running the pro-tax effort, urged volunteers to get to know one another.

“You all are going to make history,” he said. “People all over the world are looking at this election.”