Many California municipalities face budget issues. One of these cities is El Monte, in the San Gabriel Valley east of Los Angeles. El Monte is looking at a $7 million deficit when a local sales tax expires in 2014. So is the city looking at cutting costs? Well, perhaps. But it’s doing the typical California thing: Asking for more tax revenue.
El Monte has declared a fiscal emergency. That allows for an off-year election this November. And the plan is to have on the ballot a measure asking for a penny-an-ounce tax on “sugary drinks.” So if you purchase a 32-ounce soda, you will owe an additional $0.32 in tax. Needless to say, the California-Nevada Soft Drink Association isn’t thrilled with the idea.
Personally, I think El Monte should consider the only real solution to the problem: Cuts in salaries. As this article in the Los Angeles Times mentions, El Monte has cut 100 employees, reduced salaries for city council members, and deferred wages for other employees. They should really look at cutting even more.
If El Monte voters approve the measure, this will be a huge boon…for neighboring cities such as South El Monte, Rosemead, and West Covina. Shoppers will end up heading to supermarkets and stores in neighboring towns to purchase their soft drinks. Consider someone who drinks 64 ounces of soda a day. He or she could save $4.48 a week by going to a neighboring town. And it’s likely those individuals won’t just buy their soda in West Covina; they’ll also get all their other groceries. That will lower El Monte’s sales tax revenues.
Yes, soda isn’t the most healthy of drinks. That said, using taxes to legislate morality is not a good thing. In this case, it will likely backfire on all concerned. Hopefully, El Monte voters will be wise enough to vote down this tax.
