PROP. 163 : Snack Attack

Is candy food? Is bottled water? Last year the Legislature decided they are not and changed the law so that these products along with snack foods generally could be subjected to state and local sales taxes. Traditional food products purchased for home use remain exempt from sales tax.

The tax has proven to be a significant revenue producer. This year it will bring the state revenues of about $210 million and local governments about $70 million.

Snack food and bottled water producers, needless to say, are eager to have the tax repealed. They are the chief sponsors of Proposition 163, which would not just restore the tax exemption on their products but would define candy, snacks and bottled water as foods and lock into the Constitution a ban on any sale tax or use tax on these products.

We oppose that approach and we oppose eliminating a relatively painless source of hundreds of millions of dollars in necessary revenues.

Californians know that this is not the time to be discarding proven sources of revenue. No one likes to pay taxes but everyone wants to benefit from the services that local and state governments provide, and taxes are what makes those services possible. The recession in California, from all signs, will linger at least well into next year. Demands for government services haven’t slackened, but the revenue pinch seems likely to grow worse.

In these circumstances it makes no sense to throw away hundreds of millions of dollars in irreplaceable revenues. For these reasons we urge a “no” vote on Proposition 163.