I want to move to Santa Cruz to join the rebellion. Wanna come along?
Hoping to improve public health and raise revenue, Santa Cruz has established a two-cent-per-ounce tax on sodas — in defiance of a 2018 state law that prohibits local governments from imposing such levies.
This Santa Cruz Rebellion might seem small. But in a dark moment of deepening authoritarianism, California — heck, the whole damn world — needs a new age of local defiance. We must learn to hit back against the extortionists who control our society these days.
In Washington, Donald Trump, the Sith Lord of blackmail, is nullifying the law and the U.S. constitution in a relentless ransoming of countries and institutions, from law firms to universities, unless they support his policies and fatten his wallet. In California, Gavin Newsom is threatening to strip cities of housing and homeless funds unless they adopt a local oridnance the governor wrote to ban encampment.
But in Santa Cruz, on matters of soda, the people are standing up and saying: We won’t compromise on local democracy.
This story begins back in 2018, with a shameful surrender by Gov. Jerry Brown, the legislature, and California local governments. After California cities, Santa Cruz included, pioneered soda taxes to fight obesity, the beverage industry qualified a ballot initiative that was pure extortion. It said that if cities didn’t drop their soda taxes, they would lose the power to raise any kind of sales tax.
Facing that dire prospect, state and local governments negotiated with the beverage industry and wrote a new law that would bar local taxes on groceries, including soft drinks, until 2031. One awful provision of the law required the state to withhold local sales tax revenue from any city with its own soda tax — even if a court found that such a tax “is a valid exercise of a city’s authority.”
Having leveraged its way to what it wanted, the beverage industry dropped its ballot initiative.California officials admitted they had bowed to blackmail. “This industry is aiming a nuclear weapon at government in California and saying, ‘If you don’t do what we want we are going to pull the trigger and you are not going to be able to fund basic government services,’” said State Sen. Scott Wiener of San Francisco, in 2018.
At first, Santa Cruz dropped its soda tax. But in 2023, a state appellate court threw out that awful provision withholding funds from cities with soda taxes. The court said that such a penalty could not be applied to cities with their own local charters, or constitutions.
Santa Cruz has a charter. So, under the court’s decision, the city wouldn’t lose funding if it imposed soda taxes. Last November, the city asked voters to approve a soda tax — which they did. This spring, the soda, tax, the first adopted by a U.S. city in years, went into effect.
The beverage industry has called the action illegal and could sue. But Santa Cruz, as of this writing, is not backing down.
“It’s about democracy and standing up to special interests,” said Santa Cruz City Councilmember and Vice Mayor Shebreh Kalantari-Johnson after approving the law. “It’s about having the independence to generate revenue for our community.”
“The independence to generate revenue” might seem a dull phrase. But if Santa Cruz and other California cities were to protect their democratic right to collect taxes, it would be revolutionary.
Since the 1978 passage of Prop 13, which took away local governments’ control over their property taxes, fiscal power in California has been increasingly centralized in state government. Most local governments, limited in their ability to raise their own revenues, have become beggars and lobbyists, who must travel to Sacramento ask for money. Maddeningly, local officials have grown accustomed to their fiscal weakness. There hasn’t been a serious ballot initiative to challenge our centralized system of governance in this century.
Santa Cruz’s rebellion suggests that now might be the time for localities to stop begging and instead seize back power over taxation, whether state law allows it or not. Trump’s misconduct also makes this case. With the man in the White House lawlessly withholding funding to California cities and counties, why should localities bow to laws that limit their ability to boost funding?
After all, Trump’s dismantling of the federal government means that more problems are going to fall to local governments. They need to find money where they can. Novel taxes make sense. So does denying money to Washington. To start, California’s governments should stop withholding federal taxes for their own employees, keeping that cash for themselves.
Local defiance isn’t always good. There are too many harmful culture war acts of defiance, in which locals impose biased election rules, or ban books. It’s also not a great look when wealthy Encinitas, in northern San Diego County, leads efforts to avoid their housing responsiblities.
But when it comes to the capacity and funding of local governance, our local communities should assert themselves more forcefully and stand up for democratic self-government, which is under attack around the world.
As they experiment with new ways to claim authority, localities should collaborate to roll back anti-democratic structures at the global, national, and state levels. Cities and counties should be campaigning to rewrite the state constitution. And they should leap into national movements to urge state legislatures to call a so-called Article V Convention under the current U.S. constitution, which would open the door for the first comprehensive updating of that document in our nation’s history.
In those conventions, localities should push for systems of government that give them primary power, with the authority to confer citizenship, set and collect taxation, and make policy in any area that affects them. That’s already how government works in some of the world’s richest and most peaceful countries, notably Switzerland and Canada.
Let’s get started right away. See you in Santa Cruz.
Joe Mathews writes the Connecting California column for Zócalo Public Square, an ASU Media Enterprise publication, and is founder-editor-columnist at Democracy Local, a planetary publication.
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