Philly’s soda tax

Philly’s soda tax is under fire again. Who wants to see it end, and who still thinks it’s a win?

Mayor Kenney’s signature program has funded rec centers and pre-K. A new report raises questions about where the money goes.

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Dan Levy / Billy Penn
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After a short ceasefire, a new front has opened in the Philly soda tax war, with a new effort in City Council to repeal the program considered Mayor Jim Kenney’s signature achievement.

Introduced by Councilmember David Oh last week, Bill No. 220054 would end the city’s levy on sugary drinks that began in 2016. Few think the legislation has a real chance of passing, but it reignited conversation about the measure.

Kenney, who promoted the tax as a way to fund pre-K, community schools, and upgrades for recreation centers and libraries, has successfully defended the ordinance through myriad legal challenges over the years.

So far, nine sites in the Rebuild program have officially cut the ribbon on renovated facilities, with nine more in construction and 42 more in the community engagement part of the process. Since 2017, the PHLpreK program has benefitted 10,000 3- and 4-year-olds, according to city spokesperson Kevin Lessard. The program expanded this year, adding 700 new slots — bringing the total seat count to 4,000 — and 27 new providers.

Over half the funds collected from the tax, however, have so far gone to the city’s General Fund instead of the targeted program, according to data released earlier this month by City Controller Rebbeca Rhynhart’s office. In its statement about the repeal bill, Oh’s office noted that “just 36.6% of the total revenue has gone toward funding pre-K programs and 6% toward Rebuild.”

The Kenney administration takes issue with the presentation of those figures, with Lessard noting the Controller’s report “look[s] at only expenditures, not obligations,” and fails to mention spending delays that existed while the tax’s legality was in question.

Councilwoman Maria Quiñones-Sánchez, one of the four councilmembers who voted against the tax back in 2016, said Oh’s bill wasn’t on her radar — and she doesn’t think it will go anywhere. However, she told Billy Penn, “there should be a review on the tax and where the burden was laid.”

Who else has been a consistent critic of the measure? Who are some of the major proponents for keeping the program in place? Here’s a quick list of the major players.

Soda tax critics

American Beverage Association

Founded in 1919, the ABA is the major lobbying outfit for America’s non-alcoholic beverage industry. It’s currently fighting to stop similar soda taxes around the nation, after a major (failed) effort to stop Philly from enacting taxes on sugary drinks. The organization spent more than $600k trying to defeat Kenney during the 2019 mayoral race, when he was elected to a second term.

Maria Quiñones-Sánchez

Councilwoman Quiñones-Sánchez, who represents North Philly’s 7th District, first introduced legislation to study the tax’s impact in 2019, and has regularly voiced concerns about the levy’s structure and impact. She describes it as a regressive tax that disproportionately burdens working-class people with lower incomes, who studies show are more likely to drink sugar-sweetened beverages. A bottling company resides in her district, and the ABA deployed more than $630k of funding supporting her 2019 campaign.

Jeff Brown

Jeff Brown, president and CEO of Brown’s Super Stores — and likely 2023 mayoral candidate — is known for operating ShopRites all over the city, including areas where residents have below average household incomes. The fourth-generation grocer also makes efforts to employ formerly incarcerated people. Brown didn’t answer requests for comment, but in the past he has decried the soda tax and blamed it for the closure of a of one of his grocery stores, calling the mayor a “bully” who was “causing harm to the people of Philadelphia.”

Beverage tax supporters

Councilmembers asking, ‘Well, what else is there?’

While some councilmembers declined to comment on the soda tax or didn’t respond to queries, a pattern emerged in the statements Billy Penn received.

Councilmembers Kendra Brooks, Isaiah Thomas, and Jamie Gauthier indicated varying levels of direct support for the tax itself, but all raised a similar question: Where would comparable funding for pre-K, recreation center renovation, and community schools come from, if not soda tax revenue?

“Repealing the soda tax without an alternative isn’t a good faith attempt to more equitably distribute the tax burden that disproportionately falls on working class people,” said Brooks. Councilmember Thomas took issue with his colleague’s methodology, saying there “wasn’t time to explore [Oh’s] proposal or understand how his plan will fund pre-K and other critical services.”

Kenney administration

Unsurprisingly, the Kenney administration is resolute in its defense of the Mayor’s signature reinvestment initiative. Spokesperson Lessard bluntly addressed the question of funding by sharing the administration’s determination that “the fiscal reality is that other funding sources do not exist.”

Philadelphians for a Fair Future

In what might be seen as a counterpoint to the ABA-supported Ax the Bev Tax coalition of small business owners, Philadelphians for a Fair Future is a collection of local organizations that came together to support the tax.

The Lenfest Center, the Health Federation of Philadelphia, Greater Philadelphia Cultural Alliance, and multiple labor unions and community development corporations are just a sampling of the full list of supporters.

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

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