As NPR’s Allison Aubrey has reported, “One of the mayor’s selling points in persuading the City Council to support the measure is that much of the estimated $91 million the tax would bring to the city’s coffers each year would boost funding for programs including citywide pre-K education”. The city’s Parks and Recreation department could use it: It runs on a $60 million annual budget-that’s below the national average and the lowest of the top 10 cities in the country, according to PlanPhilly.
Advertisement
The tax was a hard-fought win for the city.
“This is a terrific day”.
“This is a generational problem”, Mr. Kenney said.
Other cities: San Francisco; Boulder, Colorado; Oakland, California, and several smaller communities are planning to introduce soda tax measures this year.
Critics of the Philadelphia tax, including the powerful American Beverage Association, have vowed to fight in court, labeling the tax unconstitutional.
“We believe we’re on strong legal ground”. “Indeed, we are already hearing from some of them”.
But, it nearly didn’t happen.
Now in the City of Brotherly Love, sugary drinks like soda, sweetened iced tea, and lemonade, will cost 1.5 cents more per ounce than other, healthier beverages.
With effect from January 1 next year, 1.5 cent per ounce of tax will be imposed on carbonated sugary drinks.
Harold Honickman, chairman of Honickman Group, which distributes Canada Dry and Snapple in Philadelphia, said the beverage tax could create a big black market and that sales volumes could fall more than 50% in the city as residents make shopping trips to neighboring counties. I’m just not sure that a tax on sweet drinks is the most effective way to address the problem.
He is not convinced about the impact of a beverage tax of any kind.
The biggest chunk of the soda tax will go toward making universal pre-K more accessible to everyone and building better schools-25 of them. That strategy worked, except the city council noticed that Kenney planned to divert some of the money to the general fund, so it cut his proposed rate in half and broadened the base, applying the tax to artificially sweetened as well as sugar-sweetened drinks. NY and San Francisco have both failed to pass similar measures, but National Public Radio’s (NPR) Allison Aubrey notes that Philadelphia’s decision could establish a powerful precedent for future decisions.
Advertisement
Furthermore, even those who do initially cut back on soda consumption tend to return to their old habits over time as they become accustomed to the higher prices and, perhaps, adjust their other spending accordingly.
