Santa Cruz The city of Santa Cruz’s ballot initiative, Measure Z, or the Sugar-Sweetened Beverage Tax, has formally passed after the Santa Cruz County Clerk certified the final certification of votes on Tuesday afternoon.
The Santa Cruz County Elections Department reports that 14,364 votes, or roughly 48%, were cast against the passage of Measure Z, while 15,780 votes, or roughly 52%, were cast in favor of the ballot proposal.
Santa Cruz City Councilmembers Martine Watkins, Sonja Brunner, and Shebreh Kalantari-Johnson spearheaded the Yes on Measure Z for a Safe and Healthy Santa Cruz campaign and thanked the community, volunteers, and organizations that helped make the effort possible.
Watkins expressed his gratitude to the Santa Cruz voters for their support, saying, “We are immensely proud of the hard-fought campaign for Measure Z.” This triumph symbolizes a united front for community well-being, public health, and the strength of local democracy.
“The people of Santa Cruz stood strong and made their voices heard, even though corporate special interests outspent us by $1.9 million to our $85,000,” Kalantari-Johnson continued. This result demonstrates the power of community organization, the devotion of community champions, and the will of our citizens to build a healthy future for everybody.
Campaign for an Affordable Santa Cruz spokesperson Steve Maviglio noted that the campaign was close, with the initiative prevailing by roughly 1,400 votes, and that the tax may be challenged in court in the future.
This issue is governed by state law, which states that local grocery taxes are unlawful in California, according to Maviglio. Even in California’s most progressive neighborhoods, voters are resisting a regressive tax that harms local companies, working families, and their employees, as evidenced by the tight result. Given the overwhelming support for the statewide ban on local grocery taxes that the legislature passed in 2018, this is not surprising. We are appreciative of the progressive leaders, labor unions, small business owners, students, and locals who united to oppose this unfair tax and keep Santa Cruz affordable.
Watkins and others pushed for a 1.5-cent-per-ounce sugary drink tax ballot issue in 2018, which was passed by the Santa Cruz City Council and put to a vote by city citizens that November. This marked the beginning of the city’s history of imposing a tax on sugar-sweetened beverages.
In June 2018, then-Governor Jerry Brown signed the Keep Groceries Affordable Act into law, ending the initiative two days later. The act prohibits taxes on groceries until 2031 and includes a penalty clause that would deduct all sales and use tax revenue from any charter city that tried to impose a grocery-related tax, like a soda tax.
Fearing the penalty, then-Santa Cruz City Manager Martin Bernal recommended that the act be removed off the 2018 ballot after it was passed, and the City Council did just that.
Jarvis, Fay & Gibson, LLP filed a complaint in 2020 on behalf of Watkins and Cultiva La Salud, a nonprofit organization based in Fresno. The American Heart Association and ChangeLab Solutions also backed the lawsuit. The penalty clause of the Keep Groceries Affordable Act was declared illegal and unenforceable by the Sacramento County Superior Court in the fall of 2021. The state subsequently filed an appeal against the court’s ruling.
The California Third District Court of Appeals ruled in March 2023 that the law’s penalty clause was invalid and unenforceable, allowing charter towns like Santa Cruz to vote on sugary drink tax proposals without facing consequences. The statute is still in effect even though the penalty clause for breaking the act is unenforceable.
Following the initiative’s passage, distributors of sugar-sweetened beverages in the city of Santa Cruz will be required to pay a general excise tax of two cents per fluid ounce, with a small business exemption granted to distributors with gross yearly revenues under $500,000. Certain beverages, such as those with fewer than 40 calories per 12 fluid ounces, milk products, drinks with honey or other natural sweeteners, baby formula, alcoholic beverages, and beverages meant for medical purposes or as a meal replacement, are exempt from the levy.
An estimated $1.3 million is raised for the city’s general fund each year by the tax. A seven-member community oversight body, which has not yet been formed, will distribute the tax money. The panel will include representatives from the education and health sectors.
“By working together, we can create a future where our neighbors’ and children’s health comes before corporate profits,” Watkins added. We are grateful to everyone who supported us along the way. Santa Cruz deserves this win, which embodies the best of what we can do when we band together.
Go to votescount.santacruzcounty.gov to view the official election results for Santa Cruz County.
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