Oregon voters have again rejected an initiative that would have overhauled the state's tax system.
This time it was Measure 103, which would have prohibited most new taxes on grocers and banned soda taxes anywhere in the state. The initiative was rejected 42.6 percent to 57.4 percent Tuesday with nearly 1.8 million votes counted.
Measure 103 was in large part a reaction to Measure 97, the failed, union-backed initiative from 2016 that sought to raise $3 billion a year with a broad tax on business revenue. Legislators have subsequently considered a similar gross-receipts tax, albeit on a much smaller scale.
Grocers and soda companies sought to preempt that, spending $5.3 million on Measure 103 to exempt them and their products from new taxes, with most of the money coming from the American Beverage Association. But the big companies had no better results this year than the unions did two years ago.
Measure 103 backers pitched it as a ban on taxing food, but campaign finance records show the real focus was on one element of the initiative: a sweeping ban on soda taxes. Oregon has no soda taxes now, and Measure 103 was meant to ensure it never would.
A handful of communities across the country have established soda taxes, either to discourage consumption of unhealthy beverages or to raise money for public spending. Academic studies have shown sales fall sharply in communities with soda taxes.
A similar ballot measure in Washington, I-1634, passed handily Tuesday. It leaves in place a soda tax in Seattle but precludes a tax hike and new taxes in other jurisdictions.
Most of the money in support of Oregon's initiative came from the American Beverage Association, which sought to amend Oregon's constitution to establish a tax exemption for its industry, along with a prohibition on its products ever being taxed.
Michael Bloomberg, a billionaire and former mayor of New York, gave $2.1 million to the campaign against Measure 103. He's an advocate for taxing soda as a means to improving public health.
"The beverage industry fears sugary drink taxes precisely because these taxes work—they reduce consumption of drinks that have no nutritional value and are tied to chronic diseases, and they raise critical revenue for a variety of health initiatives," said Kelly Henning, head of Bloomberg Philanthropies' public health programs, in a written statement.
Public unions and big companies, including Nike, formed a rare alliance and spent heavily in opposition of the ballot initiative. Unions feared it would limit public spending, while businesses worried that exempting grocers and soda companies would push any new taxes onto other industries at a disproportionate rate.
"Measure 103 was always about protecting special interests and never about helping Oregonians put food on the table," said Annie Kirschner, director of Partners for a Hunger-Free Oregon, in a written statement.
-- Mike Rogoway | twitter: @rogoway | 503-294-7699