The tax on sugary drinks comes into force in the city of California beach, despite the prohibition of the state

A tax on sugary drinks enters the Santa Cruz beach community on Thursday, seven years after California banned their local grocery taxes and counties as part of a reluctant treatment with the powerful drink industry.

The two percent tax per ounce, approved by the voters in November, is the first in the state since the legislators approved theOffer 2018. The American Drink Association spent a lot on campaigning against the measurement of voting in the small city of 60,000, and in court they called the illegal tax and probably to pull the city’s resources.

Santa Cruz officials are ready to challenge the State Premiseision Law in court, and despite legal uncertainty, they expect their new tax to promote other states and cities to act. The measure aims to reduce sugar consumption, especially among children and adolescents, and raise money for health programs and other community initiatives.

“It is democracy and planting special interests,” said Shebre Kalantari-Johnson, the Deputy Mayor of the Santa Cruz City Council. “It’s about having the independence of generating revenue for our community.”

The commercial organization that representsCoca-Cola, Pepsico And others said in a statement on Wednesday that it is evaluating the next steps.

The tax opposed a wide coalition, including unions and small businesses, “as an unfair load for working -class working families,” said Steven Maviglio, a spokesman for the American Drink Association.

Health proponents have been struggling for more than a decade to impose sugar -sweetened drinks, saying that higher prices would slow down a product that increases the risk of obesity, heart disease and stroke. Opponents say that the regressive tax disproportionately affects low -income families who can least afford it and harm local companies.

Berkeley, a close city similar to Santa Cruz, in 2014 approved the first tax in the country directed specifically to sugar -sweetened drinks. A good handful of other cities followed, included nearbySan Francisco, Oakland and AlbanyevenPhiladelphia; Seattle and Boulder, Colorado.

No state has approved a state -of -the -level drink tax, thoughSome have tried it.

In 2018, California legislators have a badly approved the affordable law of Keep groceriesBan local taxes on sodaand other sugary drinks until 2031. In return, the promotion group of the California Business Round Tablewithdrew a voting measure to the drinks industryThis would have made it much more difficult for cities and counties to increase taxes.

The agreement forced Santa Cruz to abandon his plans to vote on a sugary drink tax. But the city’s leaders did not give up.

That same year, a city councilor and a non -profit health defense sued, arguing that the provision of penalty of the grocery law illegally led the nautical cities approved by voters to exercise their authority on local affairs. By virtue of the law, a nautical city could be penalized that pursued a local tax on sweetened drinks when losing sales tax revenue.

In 2023, however, a state appeal court declared a penalty as an unconstitutional, but did not govern their own preempting. In June, the City Council of Santa Cruz put a fiscal measure in the vote and in November, about 32,000 voters approved it for a margin of 52 to 48.

The “No” side spent $ 2.8 million; The “Yes” side spent less than $ 100,000.

The 2 percent tax per ounce applies to sodas, ice teas, sports drinks and any other non -alcoholic beverage contained in an added caloric sweetener and has 40 calories or more for 12 ounces of drink. There is an exemption for small businesses with less than $ 500,000 in gross receipts a year.

Carina Moreno opposed the fiscal measure and said he will have to raise prices at his restaurant, Tacos Moreno.

“I was very disappointed when I heard it was happening,” he said in an email. “We already pay high prices for sugar drinks.”

But tax proponents say that Santa Cruz’s victory is impressive, as the amount of money spent the opposition.

John Maa, a San Francisco surgeon and chairman of the American Heart Association Advisory Committee in California, said that the future of sugary drinks can be in smaller communities where proponents can mobilize basic support.

“This is a great week for Soda’s fiscal movement,” he said.

This story originally presented to Fortune.com

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