Santa Cruz implements sugary drink tax after 7-year battle

Public health victory supported by the American Heart Association overcame fierce soda industry opposition

News Release 1-May-2025

Business Announcement

American Heart Association

DALLAS, May 1, 2025 – After a seven-year battle, Santa Cruz today became the first California city to implement a sugary drink tax since 2018, when the beverage industry pressured the state legislature to pass a preemption bill blocking cities from enacting local excise taxes in a backroom deal to protect the industry’s profits.

Santa Cruz also becomes the first U.S. city to implement a sugary drink tax in seven years, representing a major victory for public health advocates against a soda industry that works nationwide to undermine public policies that reduce consumption of sugary drinks.

“Santa Cruz demonstrates that when presented with the facts about the dangers of sugary drinks, voters see through the soda industry’s multi-million-dollar efforts to deceive them with misinformation,” said Nancy Brown, CEO of the American Heart Association. “The American Heart Association was proud to support the ballot measure and remains committed to the city of Santa Cruz in this years-long David vs. Goliath effort against the beverage industry. By ensuring the voices of voters are heard in Santa Cruz and other communities nationwide, we can continue to pave the way for a healthier future and reduce the harmful effects of sugary drink overconsumption.”

The city of Santa Cruz was considering an initiative to implement a sugary drink tax when the 2018 preemption bill was passed and signed by then-Gov. Jerry Brown. As a result, Santa Cruz officials were forced to pull the initiative from the ballot. Advocates from Fresno and an elected official from Santa Cruz filed a lawsuit against the preemption law. In 2021, the Sacramento County Superior Court found the law’s penalty provisions unconstitutional, a ruling affirmed by an appeals court in 2023.  

The Santa Cruz City Council then voted unanimously to place a sugary drink tax on the November 2024 ballot. The people of Santa Cruz voted in favor of Measure Z, which imposes a two-cents-per-ounce tax on soda and other sugary beverages that will generate an estimated $1.3 million per year for the city. A local advisory board will recommend how to invest the revenue. 

Scientific studies have long shown that sugary drink consumption can lead to heart disease, type 2 diabetes and serious tooth decay. Children who regularly consume sugary drinks may be at higher risk of chronic disease. Taxes on sugary drinks, including soda, sports drinks and fruit drinks with added sugar, have proven effective at reducing purchases of these drinks. In addition, cities that have implemented sugary drink taxes have generated tens of millions of dollars in revenue for health-related community improvements, from funding pre-K programs to expanding healthy food access to improving parks and recreation centers.  

“For decades, the American Heart Association has been on the forefront of the fight against the soda industry’s efforts to drive consumption of sugary drinks and increase profits,” Nancy Brown said. “At every turn, the soda industry has worked to defeat these proposals, putting profits ahead of public health. When communities are presented with the facts and given the opportunity to take action to address the health threats of sugary drinks, they are increasingly rejecting the soda industry’s deceptions.”

The Association remains steadfastly committed to the shared goal of decreasing sugary beverage consumption through sugary drink taxes and other policies including improving the nutrition of restaurant kids’ meals. The Association has worked with public health partners across the country to increase sugary beverage taxes in Boulder, Philadelphia, Seattle and several communities in California – including Santa Cruz. In 2018, the Association successfully advocated for healthier kids’ meals in restaurants (SB 1192), requiring restaurants offering children’s meals to include water or milk as the default beverage.

“The Association always has and always will support public policies that reduce sugary drink consumption so everyone, everywhere can live their longest, healthiest life,” Nancy Brown said.