COLUMN Why I'm Joining the Santa Cruz Rebellion

A City Defies State Law in Service of Democracy and Local Sovereignty. If Only Every Community Did the Same

This column is co-published with Zócalo Public Square. Photo credit: Wikimedia Commons, CC 2.5

I want to move to Santa Cruz, but not for the boardwalk, or the cool summer temperatures, or to earn a graduate degree.

I want to move to Santa Cruz to join the rebellion. Wanna come with me?

Hoping to improve public health and raise revenue, Santa Cruz has established a two-cent-per-ounce tax on sodas. The new tax defies a 2018 state law that prohibits local governments from imposing such levies.

This Santa Cruz Rebellion might seem like small root beer. But in a dark moment of centralizing power and deepening authoritarianism, this act of local sovereignty could be the beginning of the most glorious revolution since 1688, when the Brits overthrew James II and strengthened Parliament.

California—and, heck, the whole damn world—needs to usher in a new age of local defiance. We must find the courage and combat skills to hit back against the extortionists who control so much of our society these days.

In Washington, Donald Trump, the Sith Lord of blackmail, is nullifying the law and the U.S. constitution in a relentless ransoming of countries and institutions, from law firms to universities to tech companies, unless they support his policies and fatten his wallet. In California, Gavin Newsom is threatening to strip cities of housing and homeless funds unless they adopt a local ordinance, drafted by the governor’s office, to ban encampments.

But in Santa Cruz, on matters of soda, city residents and leaders are standing up to the state and to beverage companies. Come and get us if you like, they say. We won’t compromise on democracy and local sovereignty.

This story begins back in 2018, with a shameful surrender by Gov. Jerry Brown, the legislature, and too many California local governments. After California cities, Santa Cruz included, pioneered soda taxes as a way to fight obesity and diabetes, the beverage industry qualified a ballot initiative that threatened to make it harder for cities to raise sales taxes of any kind. The beverage industry initiative was thus extortion: drop your soda taxes, or we’ll push forward this measure to blow up your finances.

Facing that dire prospect, the state government negotiated with the beverage industry and wrote a new law that would bar local taxes on groceries, including soft drinks, until 2031. Extortion was baked directly into the law. One awful provision required the state to withhold local sales tax revenue from any city with its own grocery or soda tax—even if a court found that such a tax “is a valid exercise of a city’s authority.”

Having leveraged its way to what it wanted, the beverage industry, which had won similar bans on soda taxes in Arizona and Michigan, dropped its ballot initiative.

California officials admitted they had bowed to blackmail. “This industry is aiming a nuclear weapon at government in California and saying, ‘If you don’t do what we want we are going to pull the trigger and you are not going to be able to fund basic government services,’” said State Sen. Scott Wiener of San Francisco, after the deal was cut in 2018. Sacramento Mayor Darrell Steinberg explained why California had knuckled under: “I’ve been in politics a long time, and sometimes you have to do what’s necessary to avoid catastrophe.”

At first, Santa Cruz also bent to the new law, dropping its soda tax. But in 2023, a state appellate court threw out that awful provision withholding funds from cities with soda taxes, on the grounds that such a penalty could not be applied to cities that have their own charters, or local constitutions.

Santa Cruz has a charter. So, under the court’s decision, the city wouldn’t lose funding if it imposed soda taxes. Last November, the city asked voters to approve a soda tax—which they did. This spring, Santa Cruz’s city council imposed the people’s will by adopting the first new soda tax in the U.S. in years.

The beverage industry has called the action illegal and said it is assessing next steps, which could include suing the city. But Santa Cruz, as of this writing, is not backing down.

In fact, the city has gone on the offense—explicitly. “It’s about democracy and standing up to special interests,” said Santa Cruz City Councilmember and Vice Mayor Shebreh Kalantari-Johnson after approving the law. “It’s about having the independence to generate revenue for our community.”

“The independence to generate revenue” might seem a dull phrase. But if Santa Cruz and other California cities were to protect their democratic right to collect taxes across the board, it would be revolutionary.

Since the 1978 passage of Prop 13, which took away local governments’ control over their property taxes, fiscal power in California has been increasingly centralized in state government. Most local governments, limited in their ability to raise their own revenues, have become beggars and lobbyists, who must travel to Sacramento ask for money (as L.A.’s scandalously weak mayor, Karen Bass, has been doing in the face of a $1 billion budget shortfall).

Maddeningly, local officials have grown accustomed to their fiscal weakness. There hasn’t been a serious ballot initiative to challenge our heavily centralized system of governance in this century.

Santa Cruz’s rebellion suggests that now might be the time for localities to stop begging and instead seize back power over taxation, whether state law allows it or not. Trump’s misconduct also makes this case. With the man in the White House lawlessly withholding funding to California cities and counties, why should localities bow to laws that limit their ability to boost funding? Especially when they are seeking money for the public health, law enforcement, and infrastructure programs targeted by the administration.

After all, Trump’s dismantling of the federal bureaucracy and retreat from federal responsibilities mean that more problems are going to fall to local governments. They need to find money where they can. Novel taxes make sense. So does denying money to Washington. California’s local governments should immediately stop withholding federal taxes for their own employees, keeping that cash for themselves.

Local defiance isn’t always good. There are too many harmful culture war acts of defiance, in which locals impose biased election rules, or ban books from schools or libraries. It’s also not a great look when wealthy Encinitas, in northern San Diego County, leads an effort by cities to avoid building needed housing.

But when it comes to the capacity and funding of local governance, our cities and communities should assert themselves more often and more forcefully. In so doing, they’ll be standing up for democratic self-government, which is under attack here and around the world.

As they experiment with new ways to claim authority, localities should also talk to each other about ways to remake anti-democratic structures at the global, national, and state levels. California cities and counties should launch a campaign for a convention to create a new state constitution. And they should leap into national movements to urge state legislatures to call a so-called Article V Convention under the current U.S. constitution, which would open the door for the first comprehensive updating of that document in our nation’s history.

In those conventions, localities should push for systems of government that give them primary power, with the authority to confer citizenship, set and collect taxation, and make policy in any area that affects them. That’s already how government works in some of the world’s richest and most peaceful countries, notably Switzerland and Canada.

Let’s get started right away. See you in Santa Cruz.