Philly’s soda tax

Why so many people are still fighting Philly’s soda tax months later

The controversial levy is being challenged on four fronts.

soda cans
Shannon Wink / Billy Penn
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At this point, the soda tax feels permanent. Sugary beverage prices have been up for months and pre-K seats have been filled for almost as long. Soon, recreation centers, libraries and parks will receive millions in funding for improvements. And yet the war over the tax continues to rage.

More than 15 months since City Council approved the bill and nine months since the law went into effect, the soda tax is facing arguably as much opposition as it ever has. Mayor Jim Kenney’s signature piece of legislation is now being challenged on four fronts: from a Pennsylvania Senate hearing, a potential bill from Sen. Mario Scavello, City Controller Alan Butkovitz and the American Beverage Association’s lawsuit, which has twice been defeated but is on its last leg at the Supreme Court level.

Scavello, a former supermarket owner and district manager who represents the 40th senatorial district of Eastern Pennsylvania— which includes his hometown of Mt. Pocono — is the latest to join the opposition. Last week, he began circulating a memo seeking co-sponsors for legislation he claims will invalidate Philly’s soda tax and prohibit other municipalities from levying similar taxes. His biggest concern with the soda tax is its effects on grocery stores and convenience stores.

“It’s a penny on the dollar business,” he said. … “Don’t be surprised if it continues. You might just lose one or two of those stores. It’s a significant hit when you’re just barely making it.”

Since the tax went into effect, corner store and supermarket owners have claimed declining sales for sugary beverages and at their stores overall. The anti-tax Pennsylvania Food Merchants Association performed a study showing sugary drink sales are down 50 percent at 35 local stores.

The Mayor’s Office intends to fight Scavello’s proposal, said Lauren Hitt, Kenney’s communications director, via email. She listed several of the tax’s accomplishments, such as sending 2,000 kids to pre-K, creating 250 jobs and supporting 11 community schools.

“If this tax goes away, all of that progress will go away too,” Hitt said. “With the $1 billion deficit the School District is facing and the state’s own fiscal challenges, there is no other way to fund these programs.”

Asked whether he’d received much interest on co-sponsoring legislation, Scavello said it was “still early.” But he’s not the only state senator targeting the soda tax. A Senate Local Government public hearing, put together by Sens. Anthony Williams and Scott Wagner, is scheduled for Tuesday morning in Harrisburg. They’ll be discussing the soda tax, at least if protesters don’t drown them out with vuvuzelas. That’s what happened in June when they tried holding the same hearing in City Council chambers.

A more routine hearing is expected this time, though pro-tax groups intend to feature speakers. Union leaders, corner store owners and supermarket operators will speak out against the tax. Wagner, unlike Scavello, hasn’t formally come out as an opponent of it. In June, he said he planned the hearing with Williams because he “wanted to learn” more about the sugary beverages tax.

Another expected speaker is Butkovitz. The outgoing City Controller, who, according to the Inquirer, may mount a mayoral run with the backing of the soda industry, also announced findings from a survey of 1,600 local businesses affected by the beverage tax this afternoon. About 800 business responded, and 400 of them reported a decline in year-to-year revenue at least partially attributed to the soda tax. According to the survey, the majority of these 400 businesses reported a loss of 10 percent or greater.

Scavello believes numbers like these are common and will continue. For him and a handful of others it’s still not time to give up on fighting the soda tax.

“I have family in Philly. I have friends in Philly,” he said. “And I just think it’s wrong. So what’s to stop another municipality from raising a tax on a certain item. Where does it end? There should be continuity between municipalities.”

Want some more? Explore other Philly’s soda tax stories.

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Alan Butkovitz