Lawsuit Seeks to Overturn Ban on Local SSB Taxes
On Monday, a lawsuit was filed in the Sacramento County Superior Court seeking to overturn a law that restricts local jurisdictions throughout California from enacting new taxes on sugar sweetened beverages (SSBs) until 2031. Recall, the Legislature passed and then-Governor Jerry Brown signed into law AB 1838 in 2018. The measure represented a deal struck by labor and the California Business Roundtable to stop the “Tax Fairness, Transparency, and Accountability Act of 2018” initiative that would have required two-thirds voter approval for a local tax or fee increase and a two-thirds vote by a local electorate to place a tax on the ballot. Proponents of the “Tax Fairness, Transparency, and Accountability Act of 2018” withdrew the initiative upon AB 1838 being signed into law in June 2018.
Monday’s lawsuit was filed by Jarvis, Fay & Gibson, LLP, on behalf of Cultiva La Salud, Santa Cruz City Councilwoman Martine Watkins, ChangeLab Solutions, and the American Heart Association. The lawsuit argues that the state statute unlawfully penalizes charter cities that exercise their constitutionally protected authority to manage municipal affairs, including taxation. Plaintiffs in the case further argue that if the case is successful, California communities would not experience state interference with local governments’ ability to enact policies aimed at protecting the health, safety, and welfare of residents. Further, ChangeLab Solutions points to the successes of a handful of California communities that have enacted SSB taxes prior to the prohibition on taxes enacted through AB 1838, indicating cities have generated significant revenues to help provide food to families experiencing food insecurity during the COVID-19 pandemic, as well as the installation of clean drinking water systems in schools and childcare centers.
A press release from ChangeLab Solutions regarding the lawsuit is available here.