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California Shields Big soda from local taxes



SAN FRANCISCO state legislature banned all local taxes on food for 12 years in California on Thursday, a significant victory for the soda industry, which used the country's ballot initiative system to force lawmakers hands.

The ban was legally signed by

Governor Jerry Brown

after it had passed through the national legislation. Legislators said they had no choice but to pass the tax ban because they were under threat from an election campaign run by the soda industry that made it more difficult had made all local taxes to raise ballot measure, partly supported by the soda industry, withdrew the initiative from voting in November as soon as the food tax tax ban existed.

San Francisco, Berkeley and Oakland have already passed soda taxes, which public health groups say help to reduce sugar consumption, especially in low-income neighborhoods. The new law will not affect these measures, but will block soda tax proposals in four other California cities.

"This is definitely one of the toughest voices I have to take ̵

1; another example of how special interests our politics hijack the system," the state said.

Senator Ricardo Lara,

a Democrat from Los Angeles, who has reluctantly voted for the tax ban.

The beverage industry has been fighting mineral oil taxes, which have also been enforced in Philadelphia and Seattle with millions of campaigns and local business interests.

In California, the relatively new tactic of getting a lawmaker in the country to block local measures that tax soda and other foodstuffs enforced the beverage industry. Similar preemption laws have been passed in Arizona and Michigan. Corporate groups in Oregon and Washington are supporting electoral rulings that would anticipate local food taxes in these states.

To rule in California, where Democrats control the state government, lawmakers said the beverage industry's threat of limited electoral decision use local taxes as a means to influence them.

The measure, if approved by voters in November, would have required local tax increases to obtain support from two-thirds of voters, rather than the simple majority now required, among other restraints

The beverage industry welcomed this Limo tax ban as a gain for consumers.

"Our goal is to help working families by preventing unjustified increases in their groceries," said

William M. Dermody Jr.

, a spokesman for the American Beverage Association, which has dozens of beverage companies

Coke
Co.

and

PepsiCo
Inc.

Mr. Dermody said the industry is committed to "helping Californians reduce sugar consumption in ways that do not cost jobs or harm small businesses."

Taxpayers and oil tax advocates responded with annoyance to the vote "This law is one of the worst laws I've witnessed in more than 30 years fighting for better health for children and families," he said

Nancy Brown,

the managing director of the American Heart Association.

The Service Employees International Union helped broker the deal with the group behind the campaign, the California Business Roundtable. The agreement was made before Thursday's deadline for each election decision before it officially went into the November poll.

In a statement, the union said it was still required to tax soda and sugar-containing beverages, but had tried to protect communities from service restrictions if the electoral verdict had been passed.

In a statement, Mr. Brown said that while only four Californian cities had considered a soda tax, the ballot boxes he termed "anathema" would have "affected all 482 cities in the state." The fears over the Voting has outweighed the support for the oil tax, he said.

"Mayors from countless cities have called for their concerns to be voiced and to strongly support the compromise that this bill represents," said Brown.

Write to Alejandro Lazo at alejandro.lazo@wsj.com


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