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City's plan to tax sugary soft drinks faces backlash

July 25, 2012 |  6:03 pm

A battle is already brewing over El Monte’s effort to tax all sugary beverages sold within the city, as the City Council faced criticism from residents and business groups at its meeting Tuesday.

The proposal, which is one of the first of its kind in California, would add a 1-cent tax to every ounce of “sugar sweetened” beverages sold within the city. El Monte’s council members voted unanimously to place the measure on the November ballot, saying it would provide much-needed revenue for the city government and combat the health problems caused by sodas and other sweet beverages.

Business leaders have already begun to challenge the sugary drinks tax, arguing it would hurt El Monte’s local economy.

“It is irresponsible for a city with 13.7% unemployment to impose a new business tax on beverages that will threaten local grocers, restaurants and movie theaters and the jobs they provide in the community,” said Bob Achermann, executive director of the California Nevada Soft Drink Assn. “Singling out one item in the grocery cart for an additional tax is discriminatory and regressive, and it makes no sense.”

Mayor Andre Quintero, who first introduced the tax plan earlier this year, said he was not surprised by the backlash.

“Oh yeah, we anticipate the industries that sell these products to put up a fight, because this is a novel approach,” Quintero said. “If this is successful here and it works, then it might be successful in other cities. They’re not going to want anything like this to take hold anywhere.”
The San Gabriel Valley suburb, which has about 113,000 residents, has been hard hit by the economic recession. The city has reduced its workforce by more than 100 employees, deferred raises for some workers and cut the benefits received by council members.
But city officials say they still need new revenue to cover a half-cent sales tax that is set to expire in 2014. The sugary drinks tax, they said, would make up for that funding gap, providing as much as $7 million in annual revenues.
The City Council voted to declare a fiscal emergency Tuesday, which allowed it to approve the special election for the tax measure. However, El Monte officials say they are not yet at the brink of bankruptcy.
“We’re taking a precautionary, anticipatory step so we don’t take a significant financial event in the future,” finance director Julio Morales said.

 He was adamant that El Monte would not follow in the footsteps of Mammoth Lakes, San Bernardino and Stockton, which have all filed for bankruptcy this year.


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