Board votes to put 2-cent-per-ounce sugary beverage tax on November ballot after hours of debate

The San Francisco Board of Supervisors voted 6–4 on July 22 to place a proposed 2¢ per ounce tax on the distribution of sugar‑sweetened beverages on the Nov. 4 ballot.

Supporters said the tax — which would be assessed on distributors, not retailers, and would exempt 100% fruit juice, milk, baby formula and medical foods — could both reduce consumption and generate up to an estimated $50 million a year for nutrition, physical activity and school programs. Supervisor Eric Mar, the chief sponsor, said the measure was aimed at “the health of our families, communities, and neighborhoods” and noted studies estimating a large local fiscal and health burden from sugary drinks.

Opponents raised equity concerns, calling the tax regressive and urging more emphasis on education and subsidized alternatives. Several supervisors who opposed the motion said they supported the goal of reducing sugary‑drink consumption but questioned whether a city tax was the best mechanism. Supervisor David Chiu, who supported the measure, said he agreed that statewide or federal action would be preferable but argued the city must act when higher levels of government have not.

The ordinance would create a special‑purpose tax. The proposed revenue distribution in the draft measure assigns: 40% to San Francisco Unified School District programs (school lunches, nutrition education, physical education), 25% for community food and health access (including healthy retail and water stations), 25% for community physical activity programs and recreation, and at least 10% to community‑based nonprofit programs. Supporters said an oversight committee with community representation would govern spending and that the law prohibits using the new revenue to backfill existing departmental budgets.

Supervisor Mar said estimates from the city economist suggested a possible 18–40% reduction in consumption and up to $50 million in annual revenue. Supervisor Scott Wiener, a co‑sponsor, compared the measure to cigarette taxes as a public‑health tool and said taxes combined with education and investments can change behavior; he thanked City Attorney staff for drafting the measure.

Opponents, including Supervisors London Breed, Jane Kim and Norman Yee, voiced two principal objections: (1) a flat per‑ounce tax could be regressive and disproportionately affect low‑income consumers, and (2) a city‑only tax can create cross‑border shopping (residents buying drinks outside San Francisco) that will blunt the measure’s effectiveness. Some critics urged alternatives such as subsidizing healthy foods, strengthening healthy‑corner‑store programs, local limits on outlet density or labeling measures.

Several speakers described health disparities and cited alarming diabetes statistics for communities of color. Supporters emphasized that the revenue would be targeted toward those same communities through nutrition, dental and fitness programs and school services.

After several hours of public testimony and debate among supervisors, the motion to submit the ordinance to the ballot passed 6–4. The board approved the motion to send the ordinance to voters; the measure will appear on the consolidated Nov. 4, 2014 ballot and require a two‑thirds vote at the ballot box to become law because it is structured as a special tax.

Implementation: If approved by voters, the tax would be imposed at the distributor level and administered by city departments under the oversight of a community advisory panel. The measure as drafted exempts diet beverages and certain other categories and directs funds to new programs rather than replacing existing funding.

What’s next: The measure will be finalized for printing on the November ballot. Supervisors and the sponsor signaled they expect an intense public information and campaign period before voters decide.