A customer in a shop selling drinks in El Monte, where the City Council is considering a tax on soda in hope of easing a budget crunch.
Municipal leaders in this cash-strapped San Gabriel Valley city of 113,000 are looking for a sugar fix: the City Council voted 5-0 Tuesday night to declare a fiscal emergency so it can place a proposed soda tax on the Nov. 6 special election ballot, according to advocate Mayor Andre Quintero.
The tax would bring in between $3 million and $7 million per year, according to Quintero.
That's a lot in a city that has seen its general fund budget cut from $60 million in 2007 to $50.5 million now, according to Quintero.
The city has laid off 120 employees in the past four years, he said – a reduction of 29 percent.
Three car dealerships in the city closed in recent years, dramatically reducing sales tax revenues.
The city expects to be able close a $2.3 million deficit in this year's budget, but the proposed sugary drink tax would hedge against future shortfalls, city officials said.
Quintero's plan is to charge a penny per ounce of soda or sugary beverages such as Snapple or Gatorade. He said it's not just about finances; it's about health too, he said, citing high local obesity rates.
"One of our schools has a dedicated dental chair for the type of dental care that's needed because so many of the kids are coming with cavities," Quintero said. "So there is a lot of health implications to the types of drinks we are taxing."
But the California Nevada Soft Drink Association said the tax would be irresponsible in a city facing above-average unemployment.
"Singling out one item in the grocery cart for an additional tax is discriminatory and regressive – and it makes no sense. Families in El Monte continue to struggle in this economy. Adding to their burden with a tax on groceries is not the right way to tackle the city’s budget problems," said Bob Achermann, executive director of the association, in a statement.
And some store owners in El Monte are concerned with the proposal. Blanca Gonzalez, who has owned party supply store Piñata World for 19 years, worries about the effect on her customer base.
"Knowing the tax will be increasing, they might get their soda somewhere else," Gonzales said.
El Monte is among many California cities struggling to balance its budget in the face of lower revenues, higher labor costs and decreased state funding.
Its vote Tuesday is set to mirror one taken earlier this month in San Bernardino to declare fiscal emergency, but Quintero sought to distinguish the two cities.
California's constitution requires cities to declare fiscal emergency in order to put a tax before voters in a special municipal election. If approved by a unanimous vote of the El Monte City Council, the tax would go to voters on Nov. 6.
El Monte holds its regular city elections in November of odd years, making the election this fall special.