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Picking a Fight with Big Soda

Dollars likely to flow into campaigns for and against mayor’s proposed tax on sugary beverages

February 1, 2017, 12:00 am

It is uncontroversial to say Santa Fe suffers from woefully underfunded pre-K programs, which experts say are integral to improving children’s economic outcomes. About 1,000 3- to 4-year-olds in the city don’t have access to “five-star” care. Families are stuck on waiting lists, banking on lotteries for a slot in the city’s best preschools.

Disagreement arises over how the mayor plans to throw money at that problem: a tax of 2 cents per fluid ounce on sugar-sweetened drinks, including sodas, mixers, sports drinks, energy drinks, iced teas and fruit juices that contain artificial sweeteners. Exempted from the new duty would be booze, 100 percent vegetable or fruit juice and products where milk is the main ingredient. The tax would be directed at distributors, who ultimately decide how much to pass on to retailers. The proposal has already pitted city government against local business owners—not to mention the corporations collectively known as Big Soda.

After introducing his sugar tax late last year, Gonzales launched a public relations campaign to sell the plan to the locals who will be most affected. He met with the editorial boards of The New Mexican and the Albuquerque Journal’s Santa Fe office. (SFR sent a reporter to meet with the mayor.) He unveiled the official proposal on Jan. 18 and then scheduled a round of town halls at early childhood education centers that would benefit from grant programs funded by the tax.

Part of the mayor’s central message is, “You gotta find a way to pay for it.” Gonzales and his advisers also considered property or gross receipt tax hikes to raise $7.2 million to expand pre-K access. He stresses that, one way or another, Santa Fe is likely on its own to raise the cash.

"You gotta find a way to pay for it."
-Mayor Javier Gonzales

“Santa Feans told me before the election that they support the city taking on more responsibility for our values,” he says. “They know it’s not going to come out of a Trump administration. They have yet to see it come out of the Martinez administration.”

A couple dozen employees of the Coca-Cola Bottling Company of Santa Fe arrive at his second town hall Saturday morning, Jan. 28, at Aspen Magnet Community School to protest the proposal. Decked in red jackets and fleeces bearing the ubiquitous company logo, they describe fears of losing their jobs while their bosses bring the doomsday scenarios.

“Mayor, we want to work with you. We do. But we don’t want to lose this company,” says Stuart Feltman, president of the local Coca-Cola franchise. “I worry about my employees if we have to cut heads.”

Other opponents say they can’t afford to be nickel-and-dimed. Ginger Griego de Olivares, a local artist, holds up a clear plastic container of Simply Orange and tells the crowd that her husband drinks three a week. “If I have to, I’ll stop by Walmart on the way to town from Albuquerque and pick up four or five bottles of juice.”

But the mayor also has his supporters. Josh Herrera, a wrestling coach, walks up to the front of the classroom and stands shoulder-to-shoulder with Gonzales. “This isn’t about cents on the dollar,” he says. “Everybody’s worried about their children.” A home visitor who works with new parents stands up and says she struggles to keep up with her caseload of 20 families. “To get them into early childhood care, it’s hard,” she says.

City Council committees will debate the legislation before the full Council decides whether to put it to voters in a special election. But Gonzales tells SFR he’s secured the votes among Santa Fe’s nine-member governing body to make that happen. (When we polled the Council, some key votes were non-committal.) The last time Santa Fe held a special election in 2008, voters struck down a proposed real estate transfer tax.

If the sugar tax makes it to the ballot, Santa Fe could face opponents much bigger than local businesses; namely, the American Beverage Association, a trade group that represents the nation’s biggest drink brands: Coca-Cola, PepsiCo and several bottling companies.

When other cities have floated similar measures, the lobby showed its displeasure through expensive ads. The American Beverage Association threw more than $2.4 million to stop a similar proposal in Berkeley, California. (Berkeley citizens voted for the tax.) When Philadelphia’s governing body passed its own sugar tax, bypassing an election, Big Soda took the city to court. There, a judge threw out the case.

When SFR contacted the American Beverage Association last week, a representative declined to comment, referring us to Kathy Hart, human resources manager of the Santa Fe Coca-Cola bottling plant and third-generation member of the founding Hart family.

Asked whether her family would financially support a campaign against Gonzales’ soda tax, Hart says, “I don’t know at this point.”

But supporters of soda taxes also have heavy coffers on their side, potentially setting up a high-dollar fight. Bloomberg Philanthropies, the nonprofit arm of former New York City mayor Michael Bloomberg, poured millions into campaigns to support proposals in Boulder, the Bay Area and Cook County, Illinois. (Bloomberg previously pushed for a soda tax in New York, though those efforts failed.)

According to a schedule obtained through a public records request, Mayor Gonzales met with Bloomberg Philanthropies just days after announcing in November his intention to pursue a tax on sugary beverages. The mayor says he did not meet with Bloomberg personally, adding that he did not coordinate any ad campaign during his meeting in New York City.

“I’m not part of their campaign efforts—or whatever campaign might be in place. I have not talked with them about making an investment. But I do hope they do get involved in this,” Gonzales says. “I was sitting down with them to learn how they were successful in other communities.”

 

 

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