Sorry, pop-up beer garden haters. Those outdoor alcohol oases are contributing to a huge bump in revenue for the city’s cash-strapped school district.
Between FY2013 and FY2017, liquor tax revenues in Philadelphia increased by 38 percent from $52 million to $73 million, according to numbers crunched by the Office of City Controller Alan Butkovitz. “The growth in tourism combined with the ongoing success of beer gardens” contributed to the increase, the controller said in a statement released Thursday.
“Not only has the City realized the advantages,” Butkovitz said, “but it has embraced the concept by continuing with its creative ‘Parks on Tap’ this summer.”
Philadelphia’s 10 percent “liquor-by-the-drink” tax on the sale of alcoholic beverages at restaurants, bars, clubs and hotels was first imposed back in 1994. In 2013, then-Mayor Michael Nutter and other city officials wanted to hike that rate to 15 percent, but they faced strong pushback and were ultimately defeated.
At the time, Philly boasted only a handful of beer gardens — whether pop-up or permanent — and annual liquor tax revenues were $20 million less than they are now. The scene has changed dramatically: This summer, there were at least 15 beer gardens across the city, and since 2013, the tax has generated $313 million in revenue.
In Butkovitz’ monthly economic report, his office indicated that “sin and sweet” taxes (aka the liquor tax, the cigarette tax and the new sugar-sweetened beverage tax) have generated half a billion dollars in the last five years. Nearly all that cash was remitted to the School District of Philadelphia, save for about $32 million generated over five months in FY2017 from the beverage tax. That revenue goes into the city’s general fund.
Since the city’s $2-per-pack cigarette tax was enacted in 2015, it’s generated about $155 million. Revenue from that tax has decreased, dipping from $58 million in FY2016 — the first full year of the tax — to $47 million in FY2017, representing a 20 percent decrease in revenue. When the tax was enacted, the state committed to covering some shortfalls as a result of decreasing cigarette sales, so the state is expected to fork up the remainder of the projected $58 million.
Here’s the full June 2017 economic report: