April 4, 2016

Rules & Legislation Committee

Oakland City Hall
1 Frank H. Ogawa Plaza
Oakland, California 94612
Delivered Electronically
RE: Agenda Item #15 Tax on Sugar Sweetened Beverages Ballot Measure
Dear Chairperson Gibson McElhaney:
The California Restaurant Association (CRA) is the definitive voice of the food service
industry in California, and the oldest restaurant trade association in the nation. On
behalf of our members within the City of Oakland, I respectfully submit this letter
opposing the Councils proposed November 2016 ballot measure, which seeks to
create a tax on Sugar Sweetened Beverages (SSBs) in order to fund new government
programs and services.
The restaurant community is committed to a proactive role in addressing obesity and
strives to provide our customers with healthy options when it comes to food and
beverage choices. However, we believe this approach is an overreach of government
and is a misguided tactic to address the obesity problem in California. Sweetened
beverages have not been isolated as the sole cause of obesity. Balancing calories
consumed from all sources with calories burned through physical activity is the key
equation to weight maintenance.
This proposed tax is not just a tax on soda, but would be applied to juices, teas, sports
drinks, energy drinks, coffee drinks, and other sugar-sweetened beverages with more
than 25 calories per twelve-ounce beverage. Restaurants offer hundreds of choices in
order to please all customers. This tax would make it more expensive to operate a
business in Oakland, as a distribution tax equates to higher costs for the business
owner. The business owner would then be forced to decide whether to absorb the
cost increase as a cost of doing business, or to raise the price of some or all of the
items that they offer a burden that would fall on already cost-conscious consumers.
As it is, restaurateurs are under great cost pressure as they try to emerge from the
battered economy of recent years, and, for many, pay down loans that helped them
stay in business throughout that period. The industry already deals with the heavy
cost of basic commodities such as food, rent, and utilities. Other government
621 Capitol Mall, Suite 2000 Sacramento, California 95814 www.calrest.org

mandates, such as the paid sick leave law, compliance with the Affordable Care Act,
and the overnight increase of 36% to the minimum wage due to the passage of
Measure FF, have burdened the industry with even greater cost increases.
Finally, and of greatest concern, this proposed tax would create new government
programs and services that have the ability to become locked into the citys budget
for several years to come. If industry revenue drops, the costs for these programs will
continue to be necessary - and even more new taxes may need to be created to make
up the difference. This proposed tax has no accountability to the voters, as the
revenue generated from it would go to the Citys General Fund - therefore giving the
ability to be spent on anything, with no guarantees that it would be spent on the
promised programs.
We believe a discriminatory tax increase of this type is misguided, would have little
impact on obesity rates, and adds to the surmounting fiscal pressures on our industry
at a time when we can least afford it. For these reasons listed above and others, we
do respectfully oppose any tax on SSBs.
Thank you for your time. If you have any additional questions regarding CRAs
position on this matter, please do not hesitate to contact me at jlynam@calrest.org.
Sincerely,

Jessica Lynam
Director of Local Government Affairs Bay Area
California Restaurant Association
CC: Councilmember Guillen
Councilmember Kalb
President Pro Tempore Reid
City Clerks Hannah Zima and LaTonda Simmons
City Administrators Stephanie Hom and Claudia Cappio

621 Capitol Mall, Suite 2000 Sacramento, California 95814 www.calrest.org