A Sacramento County Superior Court judge has ruled in favor of the city of Santa Cruz by denying a petition by industry groups seeking to halt the implementation of a voter-approved sugary drink tax measure.
Santa Cruz voters approved Measure Z, or the Sugar-Sweetened Beverage Tax, in November 2024, instituting a two cents per fluid ounce excise tax on the distribution of non-alcoholic beverages with added caloric sweeteners that contain more than 40 calories per 12 fluid ounces.
The tax is supposed to generate general revenue for the city, the use of which will be governed by a Sugar-Sweetened Beverage Tax Oversight Committee, according to the city.
A consortium of industry groups that included the California Grocers Association, American Beverage Association, and the California Chamber of Commerce filed a petition to halt the tax, alleging that it defied three state laws that restricted local governments from imposing taxes on groceries.
In his ruling, Sacramento County Superior Court Judge Stephen Acquisto found that the tax does not violate any of the three laws and denied the petition.
“The court’s ruling sends a clear message: local democracy can withstand even the deepest-pocketed opposition,” said Santa Cruz Vice Mayor Shebreh Kalantari-Johnson in a news release issued by the city Tuesday. “Santa Cruz voters made a clear choice to fund healthier futures for our kids, seniors, and families, and this decision protects that choice from a costly industry challenge.”
The city expects that the court will file a final judgment within the next two weeks and that the petitioners will likely file an appeal.
While the appellate process plays out, the city will continue collecting the tax to generate revenue to support city initiatives, the news release said.