Why the Soda Tax Lost in San Francisco

by on November 6, 2014

For soda tax supporters in San Francisco, where Proposition E fell short of passing this week, NYU Professor Marion Nestle, one of the country’s foremost experts on food politics, has some comforting words. “With the tax initiative passing in Berkeley,” says Nestle, “I don’t see how it can help but inspire other forward seeking communities to follow suit. I bet new tax initiatives will pop up all over the place.”

Why Berkeley and not SF?

There are several reasons why Berkeley’s Measure D fared better than San Francisco’s Proposition E. The most obvious is that Berkeley needed only a majority vote to pass its general tax. SF voters were asked to approve a special use tax; under California law, such taxes, with proceeds guaranteed to specific uses, require a 2/3 majority. While Measure D was able to garner support from 75% of Berkeley voters, Prop E, which needed just over 66%, was supported by about 55% of SF voters.

The beverage industry spent big to prevent a high profile soda tax win in San Francisco, pouring over $9 million dollars into the No on E campaign, outspending the Yes on E campaign by over 30-1. Big Soda was apparently less worried about a win in Berkeley, which industry spokesman Roger Salazar has derided as “not necessarily the trendsetter that they claim to be.”

As a result, Big Soda put only about $2.4 million into the fight there. Sara Soka, campaign manager for the Yes on D campaign, told me that with help from Michael Bloomberg, Berkeley’s soda tax supporters were able to raise just over $850,000 in cash and in kind contributions to fight back, meaning No on D outspent Yes on D by only about 3-1.

The SF tax, at 2 cents per ounce, was twice the size of Berkeley’s penny per ounce, and so perhaps twice as difficult for voters to accept.

Some have even suggested that because Berkeley’s population is so highly educated – with nearly 70% of residents college graduates, as compared to SF’s 52% – it was harder for Big Soda to run their usual “scare and confuse” campaign in Berkeley.

In the end, though, what may have mattered most is that there was far more leadership to pass a soda tax shown by elected officials in Berkeley than by their counterparts in SF.

Berkeley’s elected officials were unanimous in their support for Measure D. Mayor Tom Bates, all 8 city council members, and all 5 school board members, publicly endorsed D, as did all of the candidates for Berkeley city council who ran in this election and 4 of the 5 school board candidates.

No leadership from SF Mayor

In SF, however, Mayor Ed Lee, while not publicly opposing Proposition E, did not come out in support either. Some members of the Mayor’s administration have opined that Lee was only interested in supporting ballot issues “that polled well and for which Lee could claim victory, like raising the minimum wage,” according to an August article in the SF Chronicle.

Another reason why Lee may not have been interested in supporting Prop E is because it was co-authored by SF Supervisor Scott Wiener. Wiener was also behind Prop B, a public transit funding measure put before voters despite opposition from Lee, who feared his own favored transportation measure, Prop A, would be negatively impacted by the presence of Prop B on the ballot.

So angry was the Mayor when Prop B was placed on the ballot despite his opposition that, according to the Chronicle, he “vow[ed] publicly he would ‘hold the supervisors that did this accountable.'”

Although Lee professed support for SF’s public schools, which stood to benefit to the tune of $20 million annually for better school food and more PE if the soda tax had passed, the Mayor may have let his animosity towards Wiener drive a petulant refusal to support Wiener’s soda tax proposal.

No consensus on the SF Board of Education

As a direct result of the Mayor’s refusal to endorse Prop E, school board member Hydra Mendoza also refused to support it. No doubt Mendoza was forced to take that position despite her many years of advocacy on behalf of better nutrition for SFUSD students, because her day job is serving as Mayor Lee’s education advisor. As such, she serves at the pleasure of the Mayor, who could replace her at any time if she failed to support him – in anything.

The Board of Education voted to endorse Prop E even without Mendoza’s support. However, as she was running for reelection and appearing at many public functions to promote her own campaign, it would have benefited the approximately 55,000 SFUSD students had she also used those occasions to speak up on behalf of Prop E.

That’s because 40% of the revenue generated by the soda tax would have been directed to SFUSD, to be used for better school food, more school gardens, cooking classes and afterschool programs, as well as more and better PE. With the SF Controller’s office estimating that Prop E would generate between $35-54 million dollars annually, that would have meant as much as $20 million dollars – every year – flowing to our public schools, guaranteed to be spent on programs to improve student health.

The invisible SFUSD Superintendent

And speaking of SFUSD leaders who displayed no leadership around this issue, where was district superintendent Richard Carranza? It is inexplicable that the leader of a public school system that stood to receive $20 million annually to improve student health never said one word publicly in support of Prop E, or even acknowledged that such a proposal was being put before voters, or that the students in his care would benefit from it.

It can’t be that Carranza was unaware that more funding for our public schools is needed. Shortly after taking over leadership of the district in 2012, Carranza told a Huffington Post reporter that funding was the biggest challenge facing the district’s students:

“Funding is absolutely critical to us. We’ve never funded schools the way we should have funded schools. And funding really does make a difference.

“It takes funding to be able to provide better classroom instruction. We’re proving that point in San Francisco. Students come to school with lots of needs. They may be homeless, have nutrition issues, have health and dental issues. The schools serve as the hub for those students and their families to access broader services. It takes funding to have people on staff be able to make those connections. We are proving that we can make a difference when you use funding in a strategic, well-defined way.”

So when the opportunity to receive $20 million annually to fund just those kinds of health and nutrition programs was put on the table, why did the Superintendent pull a vanishing act?

Carranza has fully embraced an extensive plan the Board of Education adopted for changing the school dining experience (“If you’re in a leadership role in a large urban school system, you can’t be timid about embracing a vision for a better life for kids.”) However, the plan is so complex and contains so many moving parts that no one is able to say for sure how much it will cost to implement it in the over 100 SFUSD schools, and there is no money in the SFUSD budget to do so.

Instead, the district has set up a website to panhandle donations from the public to pay for this new vision for cafeteria dining. The plan never made clear exactly how much money would be required to bring the vision to reality, but it is safe to assume that the approximately $5 million each year dedicated to student nutrition services (as part of SFUSD’s $20 million slice of the soda tax revenue pie) would have gone a long way towards making that vision real.

Mayor Lee, school board member Mendoza, and Superintendent Carranza all actively supported Prop C (renewal of the Children’s Fund and the Public Education Enrichment Fund, called PEEF), and it has been suggested that they feared also endorsing Prop E might somehow negatively impact Prop C’s chances of passage, since both measures benefited children.

That seems like a fabrication, though, given that Prop C was virtually guaranteed to pass. It was a renewal of two existing funds, both of which were last approved with more than 70% of the vote. The Children’s Fund was last renewed in November 2000 as Prop D and got 73% of the vote, while PEEF was passed in March 2004 as Prop H, winning 70.77%. Both funds are hugely popular and there was no reason to think they would not be easily renewed.

In addition, a war chest of about $1 million was amassed for Prop C, including sizeable donations from venture capitalist Ron Conway ($50,000), from PG&E ($105,000), and even from Steve Jobs’ widow Laurene Powell Jobs ($25,000). All this to help support a Proposition that had virtually no opposition.

In fact, so certain was Prop C’s success that, as the SF Chronicle was starting to assemble its post election coverage in the last week of October, it accidentally posted online a summary of election “results” that included the happy news that the city’s voters had successfully rallied around and passed Prop C – 5 days before the election!

So the whole idea that the Mayor, his education advisor/school board member, and the SFUSD Superintendent were too terrified of harming Prop C’s chances of passage to endorse Prop E smells more than a little funny. In the end, Prop C passed easily, again, with over 73% of the vote.

Other SF leaders who did not support Prop E can be found on the Board of Supervisors. Despite a majority of Supervisors voting to put Prop E on the ballot, there were a few holdouts who never endorsed the soda tax – Supervisors Jane Kim, London Breed, and Katy Tang. The Board of Supervisors vote to put the measure on the ballot last July showed Supervisors Wiener, Mar, Cohen, Chiu, Campos, and Farrell in support, with Avalos absent that day but having previously endorsed the measure. The 11th Supervisor, Norman Yee, voted against putting the tax on the ballot, but later changed his position and declared his support for the tax.

“We have a responsibility to act”

SF Supervisor Scott Wiener, co-author of Prop E, says,

“Voters in San Francisco and Berkeley just gave the soda industry a double black eye.  Despite nearly $2.5 million in corporate soda industry spending, Berkeley resoundingly adopted the very first soda tax in the United States.  And, despite over $9 million in corporate spending, a majority of San Franciscans voted in favor of a soda tax twice as large as Berkeley’s.

“While we are all disappointed that the San Francisco soda tax measure didn’t reach the high two-thirds threshold necessary for passage, we significantly elevated discussion around this important public health issue. Sugary beverages are fueling the explosion of type 2 diabetes, liver disease, and other metabolic diseases. These drinks are a primary cause of these diseases, and we have a responsibility to act.

“Soda taxes are important, but they aren’t the only step we can take. We need to raise public awareness through sugary beverage warnings, limiting advertising to kids, and other education efforts. We must address food policy at all levels, including ending the subsidy of high fructose corn syrup that makes soda artificially cheap.

“We have a lot of work to do to improve our community’s health, to address the impacts of sugary drinks, and to reduce consumption. Working together, we can do that, and we will.”

Bloomberg supportive of another try

The $9 million Big Soda spent to defeat the SF measure may, in the end, buy the industry only a little more time. It certainly did not produce the crushing defeat tax opponents were hoping for, and supporters were gratified to see Prop E win a majority, given that the campaign to pass the tax, absent any big money donations, was run by volunteers on a bare bones budget.

Imagine what kind of a fight those supporters could wage if only there was enough funding to level the playing field to something less than 30-1.

That may be happening a lot sooner than beverage companies would like. In the wake of Berkeley’s huge triumph, conversations are already starting in San Francisco about how soon a new measure could be placed on the ballot, perhaps with only a 50% threshold for passage.

In a phone press conference on Wednesday, Bloomberg senior advisor Howard Wolfson said that Bloomberg looks at two criteria when deciding which communities to support in their efforts to pass a soda tax: local leadership and viability. He explained that SF passed the local leadership test, but that the 2/3 vote needed to pass a special use tax was perhaps too high to be viable.

“Having said that, we were enormously pleased that the measure got 54% of the vote,” Wolfson clarified. “We hope they decide to come at it again, and come at it in a different year, and in a different form.  This is an issue of getting the details right, and then pass it into law.”

Dana Woldow has been a school food advocate since 2002 and shares what she has learned at PEACHSF.org. Follow her on Twitter @nestwife, or read more than 140 characters of her writing in her complete archive.

Contributor

Dana Woldow

Dana Woldow advocates for policies, including soda taxes and better school meals, to improve the health of all children through better nutrition and education. She has been a leader in improving school food in San Francisco since 2002, when she formed a school nutrition group to run a pilot removing junk food from SFUSD's Aptos Middle School, where her children were students; the pilot was expanded to all of the city's public middle and high schools in 2003. She served as co-chair of the SFUSD Student Nutrition and Physical Activity Committee from October 2003 to June 2011.

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