In the News

  • Fox News- January 6, 2017

    Philadelphia residents up in arms over soda tax hit

    Philadelphia residents are getting hit by the first big-city soda tax in the country, and they’re not happy. Pictures are going viral of hefty receipts that show the 1.5 cent-per-ounce tax adding up to several dollars extra on a single purchase.

    “The magnitude of this tax is historic and Philadelphian consumers can’t afford it,” said David McCorkle, CEO of the Pennsylvania Food Merchants Association.

    When the levy was approved last year, Philadelphia became the largest city in the nation to create a specific tax for soda and sugary beverages. The tax took effect on Jan. 1, with a per-ounce rate 24 times more expensive than the state’s tax on beer.

    The 1.5 cent-per-ounce rate sounds small. But it can add up on purchases of packs and large bottles.

    In one photo that went viral after being posted to Facebook, a receipt shows more than $3 in tax added to the cost of a $5.99 12-pack of Propel, an energy drink. Because of the broad language, the tax captures not only sodas but energy drinks, zero-calorie diet beverages, juice and even milk substitutes for lactose-intolerant people.

    Philadelphia Mayor Jim Kenney first proposed the tax in March 2016; it passed the City Council 13-4. The revenue will be used to fund initiatives for areas in need of improvement like community schools, parks, rec centers, and libraries – and for expanding the city’s pre-K programs.

    But the city has been in a legal battle with the American Beverage Association, which opposes the measure. And the Kenney administration has gone to the state Supreme Court seeking a final legal decision. A spokesperson for Kenney told FoxNews.com that without the tax, the city cannot fund additional pre-K seats come September – and stressed it’s not technically a sales tax.

    “The Philadelphia Beverage Tax is a tax on the distribution of sweetened beverages intended for retail; it is not a sales tax to be paid by the consumer and collected by the retailer,” spokesman Mike Dunn said. “There are thousands of Philadelphians who are thrilled with the infrastructure this tax will pay for, so it depends on who you’re speaking to.”

    The mayor’s office said there was no “mandate” on consumers, but rather on dealers and distributors who could choose whether to increase prices.

    “Since it is not a sales tax, distributors … do not have to pass it down to their customers, the dealers,” Dunn said. “They could choose to slightly lessen their seven-figure bonuses, for example.”

    But McCorkle, a plaintiff in the case against the tax, said despite what the mayor’s office says, the tax will be passed onto consumers.

    “I would ask anyone in the mayor’s office to walk through a supermarket or convenience store—the consumers are seeing a dramatic increase in the price of products in these Philadelphia stores and Philadelphians will vote with their feet by finding a neighboring community where they can buy the products they want at prices they did prior to January 1st,” McCorkle said. “If Philadelphians shop outside the city, sales decline, not only in the beverage category, but in all categories.”

    McCorkle said the Philadelphia economy in general could be affected.

    “I think the city needs to take a hard look at the potential impact, and we suspect that if store revenue declines, cuts have to be made somewhere,” McCorkle said.

    According to the mayor’s office, Philadelphia has established a Healthy Beverages Tax Credit to help those small stores and bodegas McCorkle is concerned about. The credit is offered to “qualifying merchants who increase their inventory of healthy beverages.”

    Philadelphia’s experience could shape how the soda tax debate plays out across the country. Illinois is considering a statewide soda tax, and cities including Santa Fe, N.M., are considering new local levies.
  • Fox News Politics - January 6, 2017

    Philadelphia residents up in arms over soda tax hit

    Philadelphia residents are getting hit by the first big-city soda tax in the country, and they’re not happy. Pictures are going viral of hefty receipts that show the 1.5 cent-per-ounce tax adding up to several dollars extra on a single purchase.

    “The magnitude of this tax is historic and Philadelphian consumers can’t afford it,” said David McCorkle, CEO of the Pennsylvania Food Merchants Association.

    When the levy was approved last year, Philadelphia became the largest city in the nation to create a specific tax for soda and sugary beverages. The tax took effect on Jan. 1, with a per-ounce rate 24 times more expensive than the state’s tax on beer.

    The 1.5 cent-per-ounce rate sounds small. But it can add up on purchases of packs and large bottles.

    In one photo that went viral after being posted to Facebook, a receipt shows more than $3 in tax added to the cost of a $5.99 12-pack of Propel, an energy drink. Because of the broad language, the tax captures not only sodas but energy drinks, zero-calorie diet beverages, juice and even milk substitutes for lactose-intolerant people.

    Philadelphia Mayor Jim Kenney first proposed the tax in March 2016; it passed the City Council 13-4. The revenue will be used to fund initiatives for areas in need of improvement like community schools, parks, rec centers, and libraries – and for expanding the city’s pre-K programs.

    But the city has been in a legal battle with the American Beverage Association, which opposes the measure. And the Kenney administration has gone to the state Supreme Court seeking a final legal decision. A spokesperson for Kenney told FoxNews.com that without the tax, the city cannot fund additional pre-K seats come September – and stressed it’s not technically a sales tax.

    “The Philadelphia Beverage Tax is a tax on the distribution of sweetened beverages intended for retail; it is not a sales tax to be paid by the consumer and collected by the retailer,” spokesman Mike Dunn said. “There are thousands of Philadelphians who are thrilled with the infrastructure this tax will pay for, so it depends on who you’re speaking to.”

    The mayor’s office said there was no “mandate” on consumers, but rather on dealers and distributors who could choose whether to increase prices.

    “Since it is not a sales tax, distributors … do not have to pass it down to their customers, the dealers,” Dunn said. “They could choose to slightly lessen their seven-figure bonuses, for example.”

    But McCorkle, a plaintiff in the case against the tax, said despite what the mayor’s office says, the tax will be passed onto consumers.

    “I would ask anyone in the mayor’s office to walk through a supermarket or convenience store—the consumers are seeing a dramatic increase in the price of products in these Philadelphia stores and Philadelphians will vote with their feet by finding a neighboring community where they can buy the products they want at prices they did prior to January 1st,” McCorkle said. “If Philadelphians shop outside the city, sales decline, not only in the beverage category, but in all categories.”

    McCorkle said the Philadelphia economy in general could be affected.

    “I think the city needs to take a hard look at the potential impact, and we suspect that if store revenue declines, cuts have to be made somewhere,” McCorkle said.

    According to the mayor’s office, Philadelphia has established a Healthy Beverages Tax Credit to help those small stores and bodegas McCorkle is concerned about. The credit is offered to “qualifying merchants who increase their inventory of healthy beverages.”

    Philadelphia’s experience could shape how the soda tax debate plays out across the country. Illinois is considering a statewide soda tax, and cities including Santa Fe, N.M., are considering new local levies.

  • Reason.com- January 5, 2017

    Outrage in Philadelphia as New Soda Tax Doubles Drink Prices

    That won't stop other cities and states from trying to duplicate the dubious policy

    A new tax on soda and other sugary drinks that took effect in New Year's Day in Philadelphia is already generating outrage from some residents and businesses in the city.

    Meanwhile, in New York and elsewhere, lobbyists and public officials are looking to duplicate the dubious policy.

    When it was passed last year, Philadelphia became the largest city in the nation to create a specific tax for soda and sugary beverages, a policy that had previously been contained to progressive enclaves like Berkeley, California. The tax is levied at a rate of 1.5 cents per ounce, which makes it 24 times more expensive than Pennsylvania's taxes on beer.

    Practically, that means that some drinks end up being nearly twice as expensive after the tax is applied, turning $2 sodas into $4 sodas.

    That's causing quite a stir in the city, as social media posts this week have revealed. In one photo that went viral after being posted to Facebook, a receipt shows more than $3 in tax added to the cost of a $5.99 12-pack of Propel, an energy drink.

    The Tax Foundation posted photos from inside grocery stores in Philadelphia and confirmed the ridiculously high taxes on products like Propel and other sports drinks. With the tax added, the 12 pack of Propel ends up costing more than a 12-pack of cheap beer, the organization noted.

    City officials told KYW-3 that the tax was intended to hit distributors of sugary drinks. In a shocking twist, the TV station reported on Wednesday night that the tax "is being passed onto the customer."

    After the tax was passed, some economists suggested that it would hurt businesses in the city by giving customers a good incentive to buy beverages outside city limits. Small businesses interviewed by Reason in October expressed similar concerns, since the tax is applied not only to cans and bottles of soda, but to soda fountains (like the ones found in many pizza places and cheesesteak joints across Philadelphia) too.

    Already, those predictions seem to be coming true, at least anecdotally.

    Rather than nudging people to make heather decisions about what they drink—as the tax is supposed to, even though the health benefits of soda taxes are overrated —it might just nudge Philadelphians to shop outside the city whenever possible.

    Businesses in the city might suffer from the tax, but they also get to deal with more paperwork too.

    Marisa Waxman, Philadelphia's first deputy revenue commissioner, tells WHYY that city retailers need to keep their bills to show their compliance, since there won't be a tax stamp or sticker on the beverages.

    "Even if you are compliant," said Waxman, "make sure you are hanging on to all your invoices and records so if we show up at your establishment you can show us yep I am doing what I need to be doing."

    The city will be hiring additional tax collectors to make sure everything is paid up, WHYY reports.

    About the only people happy with the new tax are, predictably, the city officials who will have an estimated $90 million in new annual revenue to spend. Officials in Philadelphia sold the soda tax by promising to use the revenue to fund a new pre-K program for the city's youngest schoolchildren. As Baylen Linnekin noted in July, "spending tens of millions of dollars to expand pre-K in a city where even the most optimistic reports show city schools already fail to educate children and are routinely broke may not be the best idea."

    That's really only half the story , though. Fifty-one percent of the soda tax revenue will be spent on other things, including the city's parks, economic development programs and disability benefits for city employees, among other things. By the third year the tax is in place, about 30 percent of the revenue would flow to the city's fund balance, meaning it could be used for almost anything.

    Even with the outrage over Philadelphia's new soda tax, some special interests in New York State are already calling for a similar, statewide, measure there.

    The New York Daily News reports that the head of a hospital lobby wants the state to impose a soda tax, with the revenue raised dedicated to help fund health care.

    According to sources who spoke with the Daily News, the president of the Greater New York Hospital Association told his board that a soda tax could help ameliorate the financial hit the state's health care system faces with the potential repeal of Obamacare under a Trump administration and Republican-controlled Congress.

    Michael Bloomberg has voiced support for more sugary drink taxes along the line of what Philadelphia has adopted. Four cities—Boulder, Colorado, and three California cities: San Francisco, Oakland, and Albany— approved soda taxes in November via ballot initiative and the Board of Commissioners in Cook County, Illinois, passed a soda tax in November too.

    Expect more stories of sticker shock—and incredulous reporting about how taxes end up being paid by consumer even though they are targeted at distributors—as soda taxes continue to expand.

  • CBS Philly- January 4, 2017

    Sugary Drink Tax Costing More Than Some Of The Products Themselves

    Today was the first day of PHL Pre-K — Philadelphia’s locally funded Pre-K initiative paid for by the new drink tax. As students arrived at the classroom, some at area stores came down with a case of sticker shock.

    This is a tax on sweetened beverage distributors and if they are not able to eat the cost, they pass it down to retailers. While some larger ones may try to absorb some of the cost, many can’t — and their customers won’t.

    To better understand the sticker shock, take a three liter bottle of discount soda — that’s about 101 ounces.

    Taxed in Philadelphia at a cent and half per ounce, that’s an additional $1.52 — in some cases making the tax more expensive than the product itself. Include eight percent sales tax and that bottle priced $1.39, becomes $3.14.

    ShopRites in Philadelphia will absorb some of the tax with a special two-week promotion.

    “It’s our way to help the customer,” said Jeff Brown, president of Brown’s Superstores.

    But some say they fear what the future loss of business will do.

    “Actually a few people have left the store due to that,” explained Joe Rutter, co-owner of Old City’s Rocket Fizz.

    Rutter says as a small business they couldn’t afford to not raise prices on their artisan sodas.

    “It’s definitely going to affect us.”

    Meanwhile, Mayor Jim Kenney’s administration celebrated the first day of expanded Pre-K programs thanks to projected revenue from the drink tax.

    “We are so excited we have been just thrilled with the Kenney administration’s initiative,” said Kathy Brown-McHale, president and ceo of SPIN.

    6500 Pre-K seats is the city’s overall goal — 2000 are currently being filled.

    Still, the question remains — who will end up footing the bill? At a second location outside the city, Rutter says his customers won’t.

    “We were going to go somewhere into the Rittenhouse area, possibly University City, but most likely will go outside of the city — Bucks County or somewhere.”

    City administrators say that it is up to distributors and retailers how that tax is passed along. The city asks hat if prices of water or other items are affected that the retailer do so with transparency.
  • CBS Philly - January 4, 2016

    Sugary Drink Tax Costing More Than Some Of The Products Themselves

    PHILADELPHIA (CBS) — Today was the first day of PHL Pre-K — Philadelphia’s locally funded Pre-K initiative paid for by the new drink tax. As students arrived at the classroom, some at area stores came down with a case of sticker shock.

    This is a tax on sweetened beverage distributors and if they are not able to eat the cost, they pass it down to retailers. While some larger ones may try to absorb some of the cost, many can’t — and their customers won’t.

    To better understand the sticker shock, take a three liter bottle of discount soda — that’s about 101 ounces.

    Taxed in Philadelphia at a cent and half per ounce, that’s an additional $1.52 — in some cases making the tax more expensive than the product itself. Include eight percent sales tax and that bottle priced $1.39, becomes $3.14.

    ShopRites in Philadelphia will absorb some of the tax with a special two-week promotion.

    “It’s our way to help the customer,” said Jeff Brown, president of Brown’s Superstores.

    But some say they fear what the future loss of business will do.

    “Actually a few people have left the store due to that,” explained Joe Rutter, co-owner of Old City’s Rocket Fizz.

    Rutter says as a small business they couldn’t afford to not raise prices on their artisan sodas.

    “It’s definitely going to affect us.”

    Meanwhile, Mayor Jim Kenney’s administration celebrated the first day of expanded Pre-K programs thanks to projected revenue from the drink tax.

    “We are so excited we have been just thrilled with the Kenney administration’s initiative,” said Kathy Brown-McHale, president and ceo of SPIN.

    6500 Pre-K seats is the city’s overall goal — 2000 are currently being filled.

    Still, the question remains — who will end up footing the bill? At a second location outside the city, Rutter says his customers won’t.

    “We were going to go somewhere into the Rittenhouse area, possibly University City, but most likely will go outside of the city — Bucks County or somewhere.”

    City administrators say that it is up to distributors and retailers how that tax is passed along. The city asks hat if prices of water or other items are affected that the retailer do so with transparency.

  • CBS News- January 4, 2017

    Philly residents sour about soda tax

    Philadelphia has became the largest city to impose a tax on sugary drinks. Many consumers are not liking the price hike, 1.5 cents per ounce, which adds almost $2 to a one-gallon container. Jericka Duncan has more.

    Click here to view video.
  • Tax Foundation- January 4, 2017

    Sports Drinks Are Now More Expensive than Beer Thanks to the Philadelphia Soda Tax

    On January 1st, the controversial Philadelphia soda tax took effect. It is levied at a rate of 1.5 cents per ounce, which is 24 times the tax levied on beer in the state of Pennsylvania. This stark new tax has prompted a few interesting reactions on Twitter as customers are starting to see just how large the effects on prices of sweetened beverages in the city are. One person on Craigslist (the post has now been flagged for removal) posted a joke page offering to smuggle in untaxed soda, noting that they “deal in weight only” and “cash or Bitcoin accepted.”

    My colleague Bill Rickards—former Tax Foundation intern, Philadelphia native, and all-around great guy—just sent me some pictures of what this looks like on the ground in the city. Some observations (all photo credits to Bill):

    A 12-pack of sports drinks is now more expensive than beer. Here’s a 12-pack of Propel energy water versus a 12-pack of Icehouse beer. Before sales taxes, 12 Propels is $5.99 plus $3.04 in soda taxes for a total of $9.03 (and that's when it's on sale for $1 less than the $6.99 standard). The 12 Icehouses are $7.99, beer tax included.


    The tax on sweetened beverages is approaching the base price of the beverage in some instances. Here’s a picture of store-brand root beer, where the price of a 12-pack is $2.99, plus a beverage tax of $2.16. That’s a 73 percent excise tax. Taxes on 2-liter sodas are even higher percentages.

    The “soda” tax is capturing a lot more drinks than just soda. Because of the overly broad statute language, the tax captures zero-calorie diet beverages, juice, and even milk substitutes for lactose-intolerant people. Here’s the tax on Pineapple Orange Banana juice:

    Here are at least a few consumers pledging to do their shopping outside the city limits as a result of the tax.

    Be sure to catch up on our recent research on soda taxes, which shows that soda taxes increase tax complexity, they have little impact on obesity outcomes, and they end up causing many consumers to switch to beer.

  • Philadelphia Inquirer- January 4, 2017

    Philly finds new tax not so sweet

    Those ounces add up.

    Philadelphia's 1.5-cent-per-ounce sweetened-beverage tax is now in effect, and stores across the city have jacked up prices, to the outrage of some thirsty customers.

    "If we pay taxes, why does everything else have to be taxed too?" Xavier Harrell said outside the Wawa store at Broad and Walnut Streets on Tuesday afternoon.

    Harrell, 21, of Center City, had stopped in to use the $5 remaining on a gift card to buy a quesadilla and a 20-ounce Sprite. He got some bad news at the register. The soda was $2.29 and he was over the card's balance. He put the drink back, paid for the food, and walked out.

    "Now I've got to eat this dry ... salty quesadilla, and I've got to be thirsty?" he asked.

    Harrell wasn't the only person left with a bad taste over the levy Tuesday. People posted receipts to Twitter complaining about the hike, which went into effect Sunday.

    An employee at a 7-Eleven store near City Hall, who declined to be named, said he'd been "yelled at all day" by customers.

    Those who fought against the tax, which will fund parks, recreation centers, and early childhood education, say the sticker shock was expected.

    "Consumers in Philadelphia should not be surprised at the vast increase in product pricing," said Alex Baloga, vice president of external relations for the Pennsylvania Food Merchants Association. "Our industry as well as others who are subject to this tax have been warning about this for the past year."

    The tax is levied on distributors and was intended to be covered by distributors, but Tuesday it was clear that plenty had passed the increase on to retailers, who in turn raised prices on the shelves.

    Major beverage companies such as Pepsi, Coca-Cola, and Canada Dry sent invoices to customers showing the price jump that stores could expect.

    At a ShopRite in Northeast Philadelphia, a $5.99 10-pack of Propel flavored water sold for $9.75 after a $3.04 add-on for the beverage tax and 72 cents for state sales tax.

    A case of Gatorade went from $20 to $30 at Nicoletti Beverage Center in Tacony. Nicoletti also raised the price of cans of soda from 50 cents to $1.

    Michael Nicoletti, co-owner of the distribution center, which also sells beer, said that given the store's proximity to Bensalem in Bucks County, he would likely stop selling sodas and sweetened beverages.

    "People can just go up the street," Nicoletti said. "It's just a nightmare. I don't know if they realize what they've done."

    City spokesman Mike Dunn noted that the tax applies only to products purchased from distributors after Sunday, so at least right now, some of the increase could be premature.

    "It is unlikely that every sweetened beverage sold to consumers by supermarkets or other dealers in the first few days of the month were purchased by that dealer after Jan. 1," Dunn said. "Consumers should be wary of signs that claim their supermarket had to pay extra for that product."

    Bertolino's Pharmacy in South Philadelphia was increasing prices last week in preparation for the tax. Little Hug juices - the sugary, fruit-flavored kids' drinks that come in colorful 8-ounce barrels - went from 25 to 40 cents.

    "A little kid comes in after school with a quarter to buy a Hug and now it's 40 cents," Tom Bertolino said. "It's a substantial difference to pay for a little kid."

    Of course, for some people, the tax didn't prompt more than a shrug.

    Robert Prather, 42, bought a Coke Zero and a bag of Combos at the 7-Eleven at Juniper and 13th Streets on Tuesday. He had no idea that the Coke had increased by 30 cents or that there was even a beverage tax on the books. He doesn't think it will change his twice-a-week soda habit.

    "To be honest," he said, taking a swig from the bottle, "I didn't know anything about it."
  • ABC6- January 3, 2017

    New Philadelphia Beverage Tax Giving Shoppers Sticker Shock

    We knew it was coming, but Philadelphia's new beverage tax is still giving some shoppers sticker shock.

    The tax took effect on Sunday at the distribution level, and, as expected, some companies are passing the added cost on to customers.

    Shoppers on Monday were checking receipts to gauge the impact of the new beverage tax.

    Different retailers have different policies.

    Acme is adding the full cost of the tax - 1.5 cents per ounce - to the retail price. So, a 20 ounce soda that was $1.88 on Saturday is now up 30 cents to $2.18.

    ShopRite says in the interest of transparency it wants customers to understand why prices are significantly up, and is taking a different approach. The primary shelf tags show the untaxed price. But below them in yellow is the full tax that will be added at the register and printed as a separate line item.

    Chuck Andrews picked up a $1.77 gallon jug of tea, got home and looked at his receipt.

    "When I read the receipt I'm like, 'Wait a minute. I paid more in tax than I did for the product,'" Andrews said.

    The tax on the $1.77 gallon of tea was $1.92 cents.

    "Which is OK if you had told me," he said.

    Andrews' point is he would rather have the full cost, the product and the tax inclusive, posted on the main shelf tag.

    A customer at a Save-A-Lot on Woodhaven Road snapped a picture of a 12-pack of diet green tea and the price surge of what normally costs $4.99. It's now $8.03.

    The money generated from the tax will help fund Mayor Jim Kenney's Pre-K program.

    "I understand that the school systems need money, but there's other ways to go about it than to make such a drastic increase on soda," Elena Porsch of South Philadelphia said.

    The mayor's office tells Action News, "The tax is on the distribution of sweetened beverages from companies like Coca-Cola to dealers like supermarkets, and because it's not a sales tax... distributors don't have to pass it on to customers."

    Small businesses like Franzones in Manayunk have already been getting an earful from customers about the higher prices and wonder what this will mean for their future.

    "The businesses take a hit with profits, the customers take a hit with payment, and it's kind of a lose-lose in Philadelphia with this tax," Mike Maziarz of Franzones said.

    Many people are saying they will go out of Philadelphia rather than pay the tax. Others say they will change what they buy.

    "So now I know. I'm buying water, water, water," Carl Saulsbury of North Philadelphia said.

    It's also important to note, if grocery stores purchased these taxable beverages last week from their distributors, then the soda tax wouldn't apply. But if the beverages were purchased on the first of January or after, it would.
  • ABC 6 - January 3, 2017

    NEW PHILADELPHIA BEVERAGE TAX GIVING SHOPPERS STICKER SHOCK

    PHILADELPHIA (WPVI) -- We knew it was coming, but Philadelphia's new beverage tax is still giving some shoppers sticker shock.

    The tax took effect on Sunday at the distribution level, and, as expected, some companies are passing the added cost on to customers.

    Shoppers on Monday were checking receipts to gauge the impact of the new beverage tax.

    Different retailers have different policies.

    Acme is adding the full cost of the tax - 1.5 cents per ounce - to the retail price. So, a 20 ounce soda that was $1.88 on Saturday is now up 30 cents to $2.18.

    ShopRite says in the interest of transparency it wants customers to understand why prices are significantly up, and is taking a different approach. The primary shelf tags show the untaxed price. But below them in yellow is the full tax that will be added at the register and printed as a separate line item.

    Chuck Andrews picked up a $1.77 gallon jug of tea, got home and looked at his receipt.

    "When I read the receipt I'm like, 'Wait a minute. I paid more in tax than I did for the product,'" Andrews said.

    The tax on the $1.77 gallon of tea was $1.92 cents.

    "Which is OK if you had told me," he said.

    Andrews' point is he would rather have the full cost, the product and the tax inclusive, posted on the main shelf tag.

    A customer at a Save-A-Lot on Woodhaven Road snapped a picture of a 12-pack of diet green tea and the price surge of what normally costs $4.99. It's now $8.03.

    The money generated from the tax will help fund Mayor Jim Kenney's Pre-K program.

    "I understand that the school systems need money, but there's other ways to go about it than to make such a drastic increase on soda," Elena Porsch of South Philadelphia said.

    The mayor's office tells Action News, "The tax is on the distribution of sweetened beverages from companies like Coca-Cola to dealers like supermarkets, and because it's not a sales tax... distributors don't have to pass it on to customers."

    Small businesses like Franzones in Manayunk have already been getting an earful from customers about the higher prices and wonder what this will mean for their future.

    "The businesses take a hit with profits, the customers take a hit with payment, and it's kind of a lose-lose in Philadelphia with this tax," Mike Maziarz of Franzones said.

    Many people are saying they will go out of Philadelphia rather than pay the tax. Others say they will change what they buy.

    "So now I know. I'm buying water, water, water," Carl Saulsbury of North Philadelphia said.

    It's also important to note, if grocery stores purchased these taxable beverages last week from their distributors, then the soda tax wouldn't apply. But if the beverages were purchased on the first of January or after, it would.

  • Philadelphia Inquirer- January 3, 2017

    Soda tax still catches shoppers by surprise

    Philadelphians have known a new soda tax was coming since June, when Mayor Kenney signed into law a bill placing a 1.5-cent-per-ounce levy on sugary drinks, including diet beverages.

    That tax, which is levied at the distributor level but was expected to be passed on to consumers, went into effect Sunday at the start of the new year. As 2016 ended, outreach teams were making stops around the city to alert store owners about the new tax.

    But despite those efforts and the months of contentious debate that preceded City Council's vote passing the tax, many consumers have still been surprised this week when they were charged higher prices for sweetened beverages.

    Photos and observations of receipts and store displays reflecting new, higher prices were generating debate on social media.

    Some Philadelphians expressed relief at not having a soda habit, or indicated they might start drinking less of the taxed beverages.

    Others suggested they would start shopping for sweetened drinks elsewhere.

    And some wondered whether stores were simply using the new levy as an excuse to raise prices.
  • Philadelphia Magazine- January 3, 2017

    The Soda Tax Went Into Effect, and People Are Freaking Out About It
    After all the debating and protesting last year, did we forget this was going to happen?

    We knew it was coming.

    And yet, maybe predictably so, a social media storm is erupting over Philly’s brand new soda tax, which went into effect two days ago. Images of receipts and promises to drink only water (which, frankly, might not be the worst idea) are clogging Twitter feeds.

    It’s true – maybe we didn’t know how bad it would be. The tax, which will benefit parks, recreation centers, libraries, pre-K and community schools, is applied at the distributor level – meaning it’s unclear exactly how much of it will be passed on to retailers and then to customers. But with distributors long fuming over the levy, you can expect soda companies to do whatever they can to ease their own brunt. Plus, many stores are reportedly adding the full cost of the tax – 1.5 cents per ounce – directly onto the retail price. Other shops are adding a separate line item on receipts, reading “Philly Bev Tax.”
  • Billy Penn- January 3, 2017


    Philly Soda Tax: The big list of drinks that are and aren’t taxed

    You’ll notice it’s pretty much everything except milk, water and the purest fruit juices.

    So you’re at the corner store looking for something delicious and cheap to drink. Under Philadelphia’s new sugar-sweetened beverage tax, it’ll cost you more than it did in 2016.

    The tax went into effect Jan. 1 and already the full cost of the tax, which is levied as 1.5 cents per ounce on distributors, is being passed through to consumers at many establishments. Example: A gallon of sweetened tea that cost $1.77 now goes for $3.69 because of an added $1.92 in tax.

    But what drinks are actually going to cost you more because of the tax? Well, a lot of them. Any drink containing a sugar-based sweetener (i.e. natural sugar, high fructose corn syrup) falls under the tax, as does any drink with an artificial sweetener. Some of the few exceptions are drinks comprised of greater than 50 percent milk or greater than 50 percent fruit or vegetables or a combination of both.

    Here’s a list of some of the most popular beverages likely to cost you more — and the few that won’t.

    Sodas
    All sodas and diet sodas are subject to the sugary sweetened beverage tax, including cans, bottles, two-liters, cases and fountain sodas. (That doesn’t include sparkling waters.) Here are some of the most popular items subject to the tax:

    A&W Root Beer
    Canada Dry
    Coke/ Pepsi products including diet, Coke Zero, etc.
    Dr. Pepper
    Fresca
    Mountain Dew
    Mug Root Beer
    Schweppes Ginger Ale
    Stewart’s Sierra Mist/ Sprite/ 7 Up
    Sunkist

    Energy drinks
    Taxed
    All energy drinks are subject to tax under the new beverage tax law, including:

    5-hour Energy
    Amp
    Monster
    Mountain Dew
    Kickstart
    Red Bull
    Rockstar
    SoBe Energize
    Starbucks Doubleshot

    Juices
    Taxed
    Fruit juices, punches and lemonade that are less than 50 percent fruit and/ or vegetable juice. That includes popular drinks like:

    Arizona fruit punches and juices (most of which are less than 50 percent juice)
    Capri Sun
    Goya
    Hawaiian Punch
    Hi-C
    Little Hug
    Minute Maid juices and punches that are less than 50 percent juice, including some punches and lemonades
    Mistic
    Nantucket Nectars
    Ocean Spray juices that are less than 50 percent juice, including Cranberry, Cran Apple and similar beverages
    Snapple juices less than 50 percent juice, including “Apple Drink” and Island Punch
    Starbucks bottled refreshers
    Sunny Delight
    Tropicana fruit juices that are less than 50 percent juice, including Tropical Punch and Tropicana Twisters
    V8 Splash juices less than 50 percent juice, including Apple Medley and Grape Welch’s juices (both diet, low-cal and regular) less than 50 percent juice, including Grape and White Grape juices

    Not taxed
    Orange juice:
    For the most part, orange juices are close to 100 percent pure, such as those by Minute Maid, Simply Orange and Tropicana. Orange drink like you’d find from Hi-C or Sunny Delight is taxed.
    Tomato juice:
    If you’re going for straight-up tomato juice, you should be good with any brand. But beware, some V8 or other brand beverages that add fruit to tomato juice can be taxed.
    Apple juice and apple cider:
    Top brands like Musselman and Simply Balanced are not taxed. Minute Maid Apple Coolers and most every drink mixing apple juice with another type of fruit juice are taxed.

    Alcohol mixers
    Alcoholic beverages are not taxed, regardless of their sugar content. However, mixers that feature sugar-based sweeteners or artificial sugar substances are taxed.

    Taxed
    Most Margarita mixes, such as those by Jose Cuervo and Margaritaville

    Not Taxed
    V8 Bloody Mary mix

    Sports drinks
    Taxed
    All sports drinks contain some amount of sugar substance or artificial sweetener. They are all taxed.

    Gatorade
    Powerade
    G2
    Vitamin Water
    Glaceau
    Propel

    Teas and Coffee drinks
    Taxed
    According to the law, a tea or coffee drink is subject to the tax if it has “any form of caloric sugar-based sweetener, including, but not limited to, sucrose, glucose or high fructose corn syrup or any form of artificial sugar substitute, including stevia, aspartame, sucralose, neotame, acesulfame potassium (Ace-K), saccharin, and advantame.” That includes popular regular and diet items like:

    Arizona Green Tea, Peach Tea and Sweet Tea
    Brisk sweetened and flavored teas
    Country Time iced tea
    Frappucinos (the pre-bottled kind)
    Fuze flavored teas
    Gold Peak flavored and sweetened teas
    Honest Tea Half Tea and Kombucha
    International Delight Iced Coffee
    Lipton sweetened and flavored teas
    Pom Wonderful teas
    Snapple sweetened and flavored teas, including Green Tea, Half & Half, Lemon Tea and Sweet Tea
    Starbucks iced coffees and refreshers (the pre-bottled ones)
    Sweet Leaf sweetened and flavored teas
    Tazo sweetened and flavored teas
    Turkey Hill sweetened and flavored teas
    V8 Iced Tea
    Wawa sweetened and flavored teas, including Iced Tea, Green Tea and Sweet Tea

    Not taxed
    Plain teas and coffees without a sugar-based or artificial sweetener

    Tea*
    Taxed
    Arctic Splash
    *We’re not sure if Arctic Splash is really tea.
  • The Daily Caller- January 3, 2017

    Massive New Soda Tax In Philly Is Leaving Residents In Shock

    Soft drink shoppers are experiencing “sticker shock” at steep price hikes on their favorite products after a massive soda tax went into effect in Philadelphia Sunday.

    The contentious soda tax secured passage in June but consumers in Philadelphia are still flabbergasted by the price increases the tax is sparking. In some cases, shoppers found that they were paying more for the soda tax than the actual product they were purchasing. The 1.5 cents per ounce tax on sugary drinks is implemented at the distribution level, meaning retailers must choose how much of the cost to pass onto consumers at the shelves. A 12-pack of Lipton Diet Green Tea at a Save-A-Lot in the city is now priced at $8.03, instead the $4.99 it costed in December, reports WPVI.

    The revenue from the tax will go to a pre-K program spearheaded by Philadelphia Mayor Jim Kenney.

    “The businesses take a hit with profits, and the customers take a hit with their payment, and it’s kind of a lose-lose in Philadelphia right now with this tax,” Mike Maziarz, of Franzones pizzeria, told WPVI.

  • Philadelphia Business Journal- January 3, 2017

    Soda tax causes sticker shockfor consumers

    The start of the New Year brought with it the start of the sugary drinks tax in Philadelphia – and higher prices on sodas and other beverages.

    Multiple news outlets reported customers' shock when seeing the actual financial impact of the soda tax, which at least two major supermarket chains made clear in how they advertised their prices.

    Acme stores, 6abc.com reported, are putting the soda tax on receipts so it is clear how much of the tax is passed on to customers. The local TV news station also said other retailers – like ShopRite – have updated the price tags on store shelves to indicate the full price.

    Some items nearly doubled in price, like this ice tea at a Save-A-Lot location in the city.

    The tax, meant to generate millions in funding for the city's beleaguered school system, is imposed at the distributor level. It is up to the beverage companies to pass the cost of the tax onto retailers, which can then pass it on to consumers. The city has long insisted that the beverage industry could take a different strategy to pay for the tax. For example, soda companies could still pass the additional cost burden on to consumers but distribute it across all their products, which includes snacks and other beverages, like bottled water.

    Big soda challenged the legality of the soda tax, claiming – among other things – it would impose an additional sales tax on consumers. But a recent ruling from Philadelphia Court of Common Pleas Judge Gary S.Glazer dismissed that idea. The industry, however, appealed the ruling.

  • NJ Advance Media/Star-Ledger- January 3, 2017

    Sugary drink tax hits with major sticker shock in Philly

    PHILADELPHIA -- It just got considerably more expensive to buy sugary drinks in Philadelphia and customers have been sharing receipts that show the itemized additional cost.

    In some instances consumers are paying more in taxes than they are for the product itself, 6ABC.com said. For example, one man who bought one gallon of sweet tea paid $3.69 - $1.77 for the tea and $1.92 in tax.

    The city's 1.5 cent per ounce tax took effect Sunday, driving up the prices customers will pay for soda, tea and other drinks with sugar or artificial sweetener.

    The tax also applies to diet soda as well as powders and concentrates used to make sweet drinks.

    It's being levied on beverage distributors, who pass it on to merchants. The vendors then make customers pay more.

    The American Beverage Association sued to stop the tax last month, but a Philadelphia judge tossed the lawsuit, Fox29.com said.

    The tax is expected to generate about $90 million this year and fund city pre-school educational programs, parks and recreation centers.
  • Town Hall- January 2, 2017

    Check Out The Jaw-Dropping New Soda Tax in Philadelphia

    Philadelphia rang in the new year with a controversial new beverage tax on soda and other sugar-sweetened drinks. The tax, which went into effect on Sunday, is the first one of its kind in a major city in the United States.

    While the tax is technically 1.5 cents per ounce, which doesn't sound too terrible, when buying a 10-pack of 20 oz bottles those numbers climb pretty quickly. In this case, a 10-pack of Propel flavored water that originally retailed for $5.99 had an additional three dollars tacked on to it in taxes.

    Yikes!

    Other people were similarly shocked at how six dollars in beverages could be subject to such high taxes, and pointed out that the tax is higher than the one on alcoholic beverages.
  • No Philly Grocery Tax - December 19, 2016

    Philadelphians Against Grocery Tax Coalition Statement regarding Judge Glazer's ruling

    Anthony Campisi
    (215) 735-6760
    Anthony@ceislermedia.com

    "We are disappointed with today's decision. More than 30,000 Philadelphians and more than 1,600 businesses and local organizations have joined together to say that this tax unfairly targets working families and small businesses. Families will face an additional tax burden even as the city has demonstrated that it has the resources to move forward with pre-K without this tax.

    "We will continue to oppose this discriminatory and regressive tax, which is not a sustainable revenue source to support important initiatives like pre-K programs. Philadelphia families will be shocked in January when prices jump on more than one thousand common beverages, including teas, soft drinks, juice drinks and no-calorie and low-calorie options. It will also become more expensive to see a movie, eat at a restaurant or attend a ballgame."

    # # #
  • No Philly Grocery Tax - September 14, 2016

    Grassroots Coalition Supports Legal Challenge to Unconstitutional and Regressive Tax

    Contact: Larry Miller or Anthony Campisi
    (215) 735-6760
    LMiller@ceislermedia.com or Anthony@ceislermedia.com

    The Philadelphians Against the Grocery Tax Coalition fully supports the lawsuit filed earlier today that asks the courts to strike down Philadelphia’s unconstitutional and regressive tax on beverages.

    More than 30,000 Philadelphians, as well as 1,600 organizations and local businesses have joined the coalition to register their opposition to a regressive 1.5 cent per ounce tax that will hurt low-income families and the family-owned businesses which are the backbone of Philadelphia’s neighborhoods.

    Local business owners expressed their support for this lawsuit because this tax will force them to dramatically increase prices on more than 1,000 types of beverages, sending people outside the city to do their shopping. The tax will raise prices on both sugar-sweetened beverages – like teas, juices, soft drinks and sports drinks – as well as low- and no-calorie and low- and no-sugar options like diet drinks.

    Because of this tax, the price of a 12-pack of sports drinks will skyrocket nearly 50 percent, to $7.15. The price of a 2-liter will go up by $1.01.

    The impact of the tax would be felt most intensely in low-income communities, where residents will not be able to shift their shopping to the suburbs to avoid this new tax.

    “My family has worked hard to create an honest business that provides groceries in an under-served neighborhood,” said Dany Vinas, who owns a C-Town supermarket in North Philadelphia. “I’ll have to raise my prices. My customers will either stop shopping at my store or have to pay more for many popular products. That’s why it’s so important that we do whatever we can to keep this tax from going into effect.”

    These sentiments are widely shared by Philadelphians. Nearly 60 percent of likely voters in a recent poll said they opposed a tax on beverages in Philadelphia.

    Restaurants and corner stores located on the Philadelphia border are also concerned they will lose customers to less-expensive options in the suburbs.

    “We stand fully behind this lawsuit,” said Gina DiSanto, President of the National Association of Theater Owners of Pennsylvania. “Movie theaters make most of our profits from concession stand sales. This tax will force theaters to raise their concession prices and make it more expensive for families to spend quality time together doing something they love.”

    “We already pay high sales and business taxes. We can’t afford to pay anything more,” said Michele Recupido, general manager of Locust Rendezvous, a popular Center City bar. “Before the city puts up more obstacles in front of small businesses, it should do a better job collecting the hundreds of millions of dollars in unpaid taxes that it’s already owed.”

    At the same time, business organizations and individual Philadelphians decried 11th hour revelations on how the money raised by this tax would be spent. Tens of millions of dollars will be used for a variety of projects, like bolstering the city’s surplus, that were only disclosed in the days before the final vote on the tax.

    “The taxpayers of Philadelphia never got the open and transparent process they deserved,” added Adam Xu, President of the Asian American Licensed Beverage Association, which represents hundreds of restaurants and corner stores throughout the city. “We support this effort because it will protect taxpayers and small businesses from an onerous and illegal tax.”

    ###


    The Philadelphians Against the Grocery Tax is a broad-based coalition of more than 30,000 concerned citizens and 1,600 businesses and community organizations opposing the mayor’s proposed new grocery tax. The coalition is taking a stand because over-taxed Philadelphians can’t afford to pay more at the grocery store.

  • South Philly Review - June 23, 2016

    What is your reaction to the impending implementation of Mayor Jim Kenney’s sugary-beverages tax?

    “It reminds me of other taxes under [former mayor Michael] Nutter because I doubt the City will use the money for the intended purposes. It’s another measure that makes me wonder who we can trust.”

    Alfredo Rodriguez,

    North Philadelphia

    “It’s ridiculous. Many people already struggle to afford stuff, so I think the prices [of goods] should remain the same.”

    Roseann Stabile,

    Broad and Jackson streets

    “Everything is getting more expensive. It’s funny that the tax is going to be on sugary drinks because that’s definitely going to affect the poor and the middle class more so than it will affect the rich.”

    Christine Fisler, 1700 block of South 13th Street

  • Yahoo Finance - June 23, 2016

    Here’s why Philadelphia residents are outraged about the new soda tax

    With a 13-4 City Council vote, Philadelphia became the first major city to pass a 1.5 cent per ounce tax on sugary drinks. While it’s a win for Mayor James Kenney, some city residents and business owners are outraged.

    “I really don’t like it. I’m disappointed in it,” one Philadelphia resident told Yahoo Finance’s Seana Smith in the video above. “I think it's incredibly regressive, and I think the population it's purported to aid and help is exactly the population it's going to negatively affect.”

    The tax is expected to generate $91 million in the first year and up to $386 million over five years. Some of the money will be earmarked for improving early education and fixing neglected infrastructure such as parks and recreation facilities in the inner city.

    But here’s what Yahoo Finance found out when talking to Philadelphia residents: They’re upset that all of the money is not being allocated to pre-K and parks and recreation facilities. During final negotiations with council members, it was determined that some of the money generated from the tax will go to the city's general fund and other expenditures including retrials for juveniles.

    A Philadelphia resident told Yahoo Finance that he doesn’t agree with how the tax will be spent, calling City Council's decision a "disgrace." Another critic of the tax said it will have a negative impact on the restaurant industry and cause sales to slow.

    Here’s why: People who buy sugary drinks in the city of Brotherly Love will have to pay an additional 18 cents in tax for each 12-ounce can of soda and $2.16 in tax for each 12-pack purchased. The new tax will affect thousands of beverages—essentially anything that contains either artificial sweetener or sugar. Drinks that will not be taxed are those that are more than 50% juice or milk. Philadelphia will start collecting the tax January 1.

  • No Philly Grocery Tax - June 20, 2016

    Coalition response to Grocery Tax Bill Signing

    Mayor Kenney signed into law this morning an unconstitutional and regressive tax that will force Philadelphians to pay higher prices in grocery stores, theaters, restaurants and taverns. In response, the Center City law firm of Kline & Specter P.C. has been retained to pursue legal action that will protect working families and small businesses across Philadelphia that can’t afford to pay this tax.

    Although Mayor Kenney promised that the money raised from this tax would expand pre-Kindergarten, pay for community schools and fund a reconstruction of city infrastructure, repeated 11th hour revelations showed that tens of millions of hard-earned taxpayer money are instead being spent on totally unrelated items – from padding the city surplus to paying for employee benefits. Less than half of the money collected by this new discriminatory tax will go toward pre-K.

    Philadelphians did not get the transparent budget process they deserved.

    “For months Mayor Kenney told us the grocery tax was all about the kids, but we learned in the 11th hour that less than half of the money will actually go toward pre-K,” said Carmen Craig, a sixth-grade teacher in Southwest Philadelphia. “This tax was a bait and switch with Philadelphians intentionally left in the dark. “

    If permitted to go into effect next year, this tax would have wide-ranging and negative impacts on the small businesses that are the anchors of our community.

    “Small restaurants such as mine will bear the brunt of this tax,” said Anne McNally, owner of McNally's Tavern in Chestnut Hill. “My establishment has been a staple of Northwest Philadelphia since 1921 and has given Philadelphia the iconic Schmitter. Restaurants such as mine are the heart and soul of our communities, yet the city is trying to drive them out of business.”

    “This unfair tax is bad for businesses like mine, which will need to pass on this cost to customers,” said Michele Recupido, general manager of Center City tavern Locust Rendezvous. “Similarly, it's bad for grocery-store owners, who will lose revenue when customers like me take our shopping to the suburbs.”

    Retailers, restaurant and tavern owners, movie theaters and sports stadium concession operators would also have no choice but to pass the tax on to consumers.

    “City leaders forgot about the little people like me when they passed the grocery tax,” said Dany Vinas, owner of the CTown supermarket in North Philadelphia. “I’ve worked hard to build my business, and the city keeps making it tougher for small businesses like mine to succeed with all these taxes. This grocery tax is really going to hurt – not only me but my customers who are going to end up paying it.”

    “It’s hard enough to succeed as a small business with all the business taxes and the 8 percent sales tax, and now the city is adding another huge tax,” said Steve Klein, co-owner of Klein’s Supermarket. “Our family-owned business operates and on thin margins and will not be able to absorb this tax – we’ll be forced to pass it along to our customers.”

    Philadelphians Against the Grocery Tax is a broad coalition of more than 30,000 concerned citizens and more than 1,600 businesses owners, movie theaters, and community organizations actively opposing the city's proposed new grocery taxes. To learn more about the Philadelphians Against the Grocery Tax coalition, visit www.NoPhillyGroceryTax.com.

  • No Philly Grocery Tax - June 16, 2016

    Statement on Philadelphia City Council Vote

    June 16, 2016 – City Council has ignored the voices of the 58 percent of Philadelphians who oppose this regressive and discriminatory large tax on more than a thousand common grocery items. This tax is unconstitutional, and that's why we will take this fight to the courts to defend our broad-ranging coalition of more than 30,000 Philadelphians and 1,600 businesses and community organizations.

    Working families and small businesses simply cannot afford to pay this tax. And as we have seen in repeated 11th hour revelations from the Kenney Administration, the people of Philadelphia did not get the full story on where this money will go. After months of promoting Pre-K as the reason for the new tax, we learned at the last minute that less than half of the tax money will actually go toward funding pre-K. Despite the efforts of thousands of Philadelphia businesses and citizens to engage in a substantive debate on this proposal, the administration intentionally failed to provide Philadelphians the transparent process they deserved.

    Philadelphians Against the Grocery Tax is a broad coalition of concerned citizens, businesses owners, movie theaters, and community organizations actively opposing the city's proposed new grocery taxes. To learn more about the Philadelphians Against the Grocery Tax coalition, visit www.NoPhillyGroceryTax.com.

  • Philly.com - June 15, 2016

    Jones: Don't shortchange the kids when it comes to the beverage tax

    TOO OFTEN presented as perpetually needy, poor children are frequently trotted out as props for ad campaigns.

    Their upturned faces, staring out from TV screens, can make the most hardened among us want to lend a hand to the needy, to the helpless, to the children.

    In watching the contentious debate over the 1.5-cents-per ounce beverage tax that City Council is poised to pass on Thursday, I saw that scenario play out yet again. As images of children filled our TV screens, we were led to believe that the tax would fund universal pre-kindergarten for Philadelphia's kids.

    Based on interviews with Council members and members of Mayor Kenney's staff, I now know that the pre-kindergarten program is not universal. It's more like a pilot program that will serve about 2,000 children the first year. And while the Kenney administration hopes to ramp it up to something that could serve about 6,500 children by 2021, the children whose smiling faces stared out at us from advertisements are not the only focus.

    The beverage tax - which now includes diet drinks, as well as sugar-sweetened beverages - will fund not only pre-K for a portion of the city's 17,000 eligible children. It also will help to refurbish parks and recreation centers across the city, pay some employee disability benefits, cover some costs for the DA's office to retry juvenile lifers, support arts and culture programs, and bolster the city's fund balance.

    The part about bolstering the city's fund balance was sprung on Council members only hours before a crucial committee vote last week, but Councilman David Oh, an opponent of the tax, says that last-minute revelations and shifting numbers are par for the course when it comes to this kind of legislation.

    "I'm not besmirching the mayor, but I am saying that it is historic in Philadelphia that this is the process," Oh told me in an interview. "No actual accounting. If they gave me a number right now, that could change next week. There's no way to actually secure that (beverage tax) money for that purpose."

    Once the money is in the kitty, Oh said, it could be repurposed for something other than pre-kindergarten.

    I'd be lying if I said that wasn't a concern. But even more pressing than the political sleight of hand that gave us the last-minute fund-balance revelation is this: How will the beverage tax and its projected $91 million in annual revenue benefit those poor children whose smiling faces made us believe?

    Mayoral spokeswoman Lauren Hitt said in a statement: "The tax will allow the City to significantly expand access to quality, affordable pre-K across Philadelphia, especially in areas of high need. The 6,500 pre-K seats will be targeted towards the thousands of children who already qualify for federal or state subsidies but sit on waitlists because the City has previously done nothing to help them. Nearly 75 percent of Philadelphia's three- and four-year-olds qualify for state or federal pre-k assistance."

    That's laudable, but it's not universal, given the fact that more than twice as many children as the program will eventually serve are qualified for pre-kindergarten and don't attend.

    Hitt says the mayor never pitched the beverage tax as a way to fund universal pre-kindergarten. But it's hard to ignore the fact that the commercials for the tax use words such as "citywide pre-K." That made us believe that his program would serve every child who needs it.

    Even in five years, when the mayor hopes state and federal subsidies will provide an additional 3,500 pre-kindergarten seats in Philadelphia, about 7,000 kids will still be left out.

    But there are other concerns around the money from the beverage tax. Namely, who will get the contracts and jobs created by the pre-kindergarten programs?

    "I think that our concern is that the early stages where these pre-K slots are provided as a result of new revenues, that all of these slots go to those corporate pre-kindergarten providers," Council President Darrell Clarke told me in an interview.

    The mayor's Office of Education will seek to address that by providing funding and assistance to neighborhood providers who need help to upgrade their services to quality pre-K.

    But this is uncharted territory. Running what amounts to a parallel education system that might or might not be administered in part by the School District could set up a slush fund of sorts that could fund lucrative insider contracts. Or it could create a precedent for childhood success in some of our most challenged communities.

    I remain skeptical, but also hopeful that our kids will win the day.

    Since the children been the face of all this, they deserve at least that much.

  • Philly.com - June 15, 2016

    Commentary: Mayor, Council pushing unconstitutional soda tax

    Mayor Kenney and City Council are in the process of violating the Pennsylvania Constitution by enacting a tax on each ounce of sugar-sweetened beverages and - after the latest legislative shenanigans - certain diet beverages.

    It is beyond dispute that only the state legislature can determine where and on what items a tax can be imposed. Harrisburg is why we in Philadelphia pay an 8 percent sales tax instead of the 6 percent sales tax in other parts of the commonwealth.

    In my opinion, the proposed tax by the ounce is a thinly disguised sales tax, and the city knows as much. The practicality of the situation is this: If no one purchases one of these beverages, there is no tax consequence. If a purchaser does buy one of these beverages, then a tax arises because of the sale. Clearly it is a sales tax.

    The city tries to claim that the tax is imposed on the distributor, not the consumer. The city implausibly believes the tax will not be passed on to the consumer. That is like believing the person who wants to sell you the Brooklyn Bridge can actually sell you the Brooklyn Bridge. No rational sellers of these beverages are going to take the tax's bottom-line hit on their profit margin. The tax will simply be passed on to the consumer.

    That brings up the uniformity clause of the state constitution, which basically states that taxes must be uniform across the commonwealth. The city says the distributor will bear the burden of this tax. But a distributor in Reading or Altoona, for instance, would not have a similar tax on the distribution of these beverages. Consumers in other counties do not have to pay a similar tax on these beverages. In my opinion, that is a clear violation of the uniformity clause.

    Even in Philadelphia, the proposed tax is not uniform and varies widely based on the type of beverage purchased. The tax on a two-liter bottle of sugared or diet soda costing $1 would amount to $1.01 - more than 100 percent. The tax on a 9.5-ounce Starbucks Frappuccino costing $3 would amount to 14 cents - less than 5 percent. How do you even calculate the tax on a 10-ounce fountain drink? Would the tax be calculated including the amount of ice in the cup or minus the ice in the cup?

    So not only does the proposed tax clearly violate the uniformity clause, but it also is unfair to consumers.

    In addition, the city administration sold this bill of goods as "for the kids," as a way to expand pre-K and upgrade recreation centers in Philadelphia. But recent news stories show that some of the revenue would be for purposes unrelated to pre-K or parks and recreation. Why wasn't that mentioned in the discussions of the proposed tax?

    We should help the kids. We should promote a healthy lifestyle. This proposed tax would not have much impact on my personal budget, but I don't intend to pay an unconstitutional tax on beverages during the time it will take for the tax to be reversed in the courts. As a matter of principle, I will just go outside the city to buy my non-taxed sugared or diet beverages. It is sad that many Philadelphians don't have that option.

  • Philly.com - June 14, 2016

    Big chunk of soda tax money not going to pre-K

    While Mayor Kenney pitched his sugary drink tax as needed to fund early childhood education, it turns out that nearly 20 percent of the money raised would go to other city programs and employee benefits.

    The additional spending - never mentioned while Kenney was selling the tax to the public - was added on during talks with Council on the proposed tax, according to the administration.

    "These changes are the result of weeks of negotiations between City Council and the administration," said Mike Dunn, spokesman for the administration. He said the changes include $81.4 million, over five years, in funding for items that either Council members requested or that the administration favored.

    Those items include:

    $6.7 million for employee benefits, primarily for disability settlements.

    $4.4 million for programs within Health and Human Services, including the Philadelphia Nursing Home, youth homelessness, and feeding the homeless.

    $1.6 million to cover the costs of resentencings for about 300 juveniles who were sentenced to life without parole, a penalty ruled unconstitutional by the U.S. Supreme Court.

    $1 million to Community College of Philadelphia.

    $915,000 to cultural institutions, including the African American Museum and Historic Philadelphia.

    Dunn said many of those annual increases would be recurring in the city's five-year plan.

    A spokeswoman for City Council President Darrell L. Clarke said Clarke was not aware that those programs would be funded through drink tax revenues. "They have not communicated that to us," Jane Roh said.

    What is not in dispute is that out of $91 million that would be generated annually through the 1.5-cent-per-ounce tax on sweetened drinks and diet beverages that passed out of a Council committee last week, at least $16 million would go to previously unadvertised spending. By year five, the administration said, it would be spending more than the $91 million generated by the tax to fully fund all of its initiatives.

    Kenney originally sought a 3-cent-per-ounce tax on sugary beverages to fund expanded early childhood education, community schools, and improvements to parks, recreation centers, and libraries.

    The compromise bill would raise $386 million over five years. About $300 million would cover expanding pre-K, community schools, and fixing parks, rec centers and libraries. Also, $4.5 million would go toward a healthy-beverages tax credit.

    The $81.4 million in additional spending could be found in the last of the six lines of the tax revenue breakdown spreadsheet handed out to Council members Wednesday.

    Councilman Allan Domb - a key vote last week - said he asked about the changes last week.

    "I didn't get that much detail, but they did mention there were different requests from other Council people and an issue with employee disability lawsuits," Domb said.

    Some experts in municipal finance said they were not surprised by the additional spending.

    "City Council tends to get stuff when they give something," said Sam Katz, former chairman of the city's fiscal watchdog, the Pennsylvania Intergovernmental Cooperation Authority. "It was probably part of the horse-trading to get the votes."

    Michael Masch, city budget director under Mayor Ed Rendell, saw nothing "unusual or objectionable."

    "Of course it's funding in exchange for the soda tax," Masch said. "Why would Council vote for the tax and at least not attempt to negotiate for their own priority?"

    Dunn said there was no quid pro quo for votes. Council members and staff also denied trading their votes for funding.

    Several members said they were aware of, and in some cases upset by, the administration's funneling tax revenue to other purposes. Others called it a nonissue, saying that once tax revenue is raised, it can technically be spent by the administration on anything.

    Councilman Mark Squilla, who voted for the tax, said all that matters is that the administration delivers on the programs it said the tax would fund, like expanding pre-K. "This happens every year," Squilla said. "It's nothing unusual."

    David Oh, a Republican who voted against the sugary drinks tax, called the funding mechanism somewhat deceiving. "This is not the narrative that had been told to the public," Oh said. "The public had been told that we don't have the funds - we need the funds, and the reason we need the funds is to implement a universal pre-K program and to fund the rebuilding and repairs of community centers, rec centers, community schools. . . ."

    Oh said the tax would bring in far more than the administration needs and thus offered a way to pay for administrative needs and Council requests without finding money in the budget.

    "It's not that it won't be used for good purposes," Oh said of the additional money. "It's just that it's not part of the democratic process. You're just giving the mayor extra money, of which we don't know what it's for."

    Dunn said that the budget amendments would not take away from the mayor's plan for pre-K, schools, and rebuilding.

    "The administration feels these investments are all going toward very worthy programs that will directly benefit Philadelphians," he said.

    Councilwoman Jannie L. Blackwell, who became a surprise supporter of the tax last week after initially coming out against it, said she had no idea revenue from the tax was targeted for other purposes.

    "You mean all of this is coming out of the sugar tax?" Blackwell said while looking over the list of additional items. "Very interesting."

    Asked if the change would affect her vote Thursday, Blackwell said only that she had a lot of remaining questions. "In politics, you just have to keep your options open and see what happens," she said.

  • Newsworks - June 10, 2016

    Philly Council pledges to investigate city finances after surprise amid soda tax vote

    As Philadelphia City Council took the first step toward approving a 1.5-cents-per-ounce tax on soda and sugary drinks Wednesday night, one detail left council members and reporters scratching their heads.

    Before the vote, City Finance Director Rob Dubow laid out where the revenue of the final deal would go: expanding pre-K, community schools, debt service on a $300 million bond to reinvest in the city's parks recration centers and libraries, and a tax credit program for businesses that sell healthy beverages. (Initial plans to contribute to city's pension liability and energy efficiency upgrades in city-owned buildings were cut.)

    "And then, a portion would go to fund balance," Dubow said.

    According to Council President Darrell Clarke, that last item was unknown to members of council until Wednesday afternoon. Councilman Bill Greenlee criticzed the administration for not making that clearer. Opponents of the tax, including the American Beverage Association and the local teamsters union, immediately siezed on the issue, calling it a bait-and-switch.

    On Thursday, Mayor Jim Kenney called it a "minor issue" that is being twisted by critics of the tax.

    "This is the last-ditch effort of the soda companies to throw a monkey wrench into the process," he said.

    So what happened?

    According to Kenney spokeswoman Lauren Hitt, the fund balance is the difference between the amount of revenue the city raises and the amount it expects to spend in a given year.

    If it's passed in a final vote in City Council next week, the tax would go into effect in January 2017 and is projected to generate $400 million over the next five years. As the pre-K and other programs are rolled out over those five years, the difference between the cost of implementing those programs and the tax revenue will be diverted to the general fund. That difference adds up to $41 million, which includes $30 million in year two of the tax (FY '18), $10 million in year three (FY '19) and $1 million in year four (FY '20). In years one and five, Hitt said, the programs will cost $5 million and $14.6 million more than the tax revenue brings in, respectively, and so no money will be diverted in those years.

    Hitt said the administration had always proposed using some of the revenue for the general fund. The net balance of that fund could fall as low as $15 million in fiscal year 2018 likely causing credit rating agencies to lower the city's rating.

    However, it appears City Council is not letting go of the issue.

    On Thursday, Clarke announced a series of hearings on the city's financial health.

    "City Council is deeply concerned about new information we have received in the last days of the budget process regarding Philadelphia's true fiscal health," Clarke said in a statement. "The legislative branch and the public we represent deserve greater transparency in how public dollars are raised, allocated, and utilized."

  • Philadelphia Inquirer - June 10, 2016

    Philly's fund balance takes center stage in soda-tax debate

    A rather arcane element of the city's finances loomed large Thursday.

    The fund balance - the money available in the city's annual operating budget - first rose to prominence Wednesday when the Kenney administration acknowledged it would benefit from the 1.5-cent-per-ounce tax on sweetened drinks and diet beverages passed out of a City Council committee that day.

    While some Council members said that concern for the health of the fund balance helped secure their vote, several were upset by what they saw as a last-minute surprise from the administration. The anti-soda-tax forces argued that that was reason enough to stop the tax. And the administration pushed back Thursday, saying the soda tax was always going to provide money to increase the depleted fund balance, at least temporarily.

    The proposed tax on sweetened drinks and diet beverages would bring in $91 million annually. The administration has said it would fund prekindergarten expansion, the creation of community schools, and improvements to parks, recreation centers, and libraries. Because those programs would take time to ramp up, the tax would generate more money than would be spent in the first three full years it was implemented.

    As a result, the administration said Wednesday that an additional $24 million would be directed through 2020 to bolster the fund balance, which has dropped from $150 million last year to $70 million this year.

    Fund balances are closely followed by bond-rating agencies. The lower a fund balance, the more expensive it is to borrow money. The city already pays up to $27 million more to borrow because of its less-than-perfect ratings compared with top-rated towns.

    The administration is predicting a fund balance of $33.7 million in fiscal 2017. The recommended amount for 2017 is about $246 million.

    Some Council members said they did not know about the connection between the soda tax and the fund balance until Wednesday afternoon.

    "A lot of us were seeing if we could keep the tax a little lower, if possible, and the numbers were not adding to what they were saying they needed and what we thought we were providing. And then it was disclosed - the fund-balance issue," Councilman William K. Greenlee said Thursday.

    The improved fund balance helped sway at least one vote - that of Councilman Allan Domb.

    Domb said he and some other members were in favor of a lower tax rate until he understood the connection to the fund balance.

    "I decided I would go to the 1.5 in order to avoid a low fund balance, which was dangerously low," Domb said, "which, by the way, would cost us more if Moody's downgraded our bonds again."

    Part of Kenney's ambitious plan to revamp many of the city's recreation centers, parks, and libraries is to borrow $300 million to help pay for the costs.

    While the administration has said that the fund balance is well below the recommended levels, a Kenney spokesman said Thursday that the soda tax was not specifically designed to shore it up.

    "It was never the intent of the mayor's original proposal nor of the revised plan approved by Council committee to pad the fund balance," spokesman Mike Dunn said.

    Nevertheless, critics were quick to jump on the fund balance to argue that the administration had been misleading in its pursuit of the tax.

    "It's evident now that the Kenney administration pulled a bait and switch on Council and the citizens of Philadelphia," said Danny Grace, secretary of Teamsters Local 830, which represents bottlers and truck drivers. "The tax isn't all about the kids, as they pledged. It's about paying down the city's debt service."

    Council President Darrell L. Clarke said Thursday that the fund balance came up only this week, when Council was asking for detailed numbers.

    "There was an acknowledgment that the need for the additional money, particularly in the early years of these funding initiatives, was to support the fund balance," Clarke said. "It was never the nexus between that and the tax until recently."

    Now, he wants to take a deep dive into the city's fiscal health. Clarke introduced a resolution Thursday calling for hearings to examine the city's new revenue stream and how it's applied, including the fund balance.

  • Philadelphia Inquirer - June 10, 2016

    Inquirer editorial: What else don't we know about soda tax?

    Mayor Kenney greets children during a news conference in March at the Rising Stars APM Preschool Center. Kenney is asking for a soda tax to fund initiatives including universal pre-K.

    Watching Mayor Kenney's proposed legislation to tax sugary drinks wend its way toward expected City Council approval gives credence to the old saying that laws are like sausages: It's better not to see them being made. Philadelphia politics in particular can be pretty disgusting to watch, as moves and countermoves conceal true motives.

    The intent of Kenney's plan - to raise revenue to provide more early-childhood education opportunities for the city's children - is without question noble and needed, and Council's preliminary assent is a victory. But the route of his quest has at times been upsetting.

    Take Wednesday's surprising revelation in a City Council meeting that some soda-tax money would be used to shore up the city's depleted general fund. It was surprising because Kenney listed five specific beneficiaries of soda tax revenue when he announced his plan. Over five years, he said, the tax would provide:

    $256 million to expand the number of high-quality prekindergarten centers;

    $39 million for 25 community schools housing social-service agencies;

    $23 million to make selected school buildings more energy-efficient;

    $56 million to help repay a proposed $300 million bond to upgrade parks and recreation centers;

    and $26 million to help reduce the pension system's $5.7 billion deficit.

    It's not unusual to see allocations and beneficiaries of anticipated revenue change as a proposed tax is debated and amended, but Kenney's office maintains that he always intended to put some cash in the general fund. "The mayor did not make a big issue of it at public events because it's pretty standard budget math," Kenney spokeswoman Lauren Hitt told the Inquirer Editorial Board Thursday.

    She said any revenue exceeding what is needed to initiate the mayor's programs, about $24 million over five years, would go to the general fund. Hitt described that as standard procedure that required no public explanation. But Council President Darrell L. Clarke said in a statement Thursday that Council reached a consensus in favor of the tax "following the Kenney administration's admission that it intended to divert some of the revenues to the city's general fund."

    So was it standard procedure or a game-changing development? Certainly wily City Hall veterans like Kenney and Clarke know the truth. Meanwhile, the public is left to ponder whether a broader-based levy would have been more appropriate to help balance the city's budget.

    Ironically, when then-Councilman Kenney opposed a proposed soda tax in 2010, he cited the lack of specificity in Mayor Nutter's plan to spend revenue earmarked for the general fund. It makes sense to put excess revenue to good use if it isn't immediately needed for its original purpose. But Kenney should have specified every detail of his plan, not only to assure the public that every dime will be wisely spent, but to quiet soda-tax critics who now accuse him of trying to hide something.

  • PhillyVoice - June 9, 2016

    Is Philly's soda tax good for its fiscal health?
    With City Council set to approve a tax for less than the mayor hoped, we asked councilmembers about the compromise

    Late Wednesday night, City Council's committee of the whole approved a plan to tax soda and other sugary drinks – plus diet sodas, which weren't initially part of the deal – at a rate of 1.5-cents-per-ounce.

    Annually, the tax is expected to bring in $91 million, just shy of the projected annual $95 million that the mayor's initially proposed sugar-sweetened drink tax would have raised at a rate of three-cents-per-ounce.

    The tax is expected to be approved and turned over to the mayor to be signed into law sometime next week.

    The money is earmarked for a wealth of Mayor Jim Kenney's passion projects – universal pre-K, community schools, police body cameras and revitalization of civic spaces throughout the city – but Wednesday's decision came with a caveat. While the funds have long been touted as being necessary to protect and support the city's youngest residents, some councilmembers were surprised to find out, late in the game, they said, that some of the funding would be used to help balance the city's general fund.

    In response Thursday, City Council approved a resolution to evaluate the "fiscal health of the City of Philadelphia" in the wake of Wednesday's vote.

    So was the resolution, introduced by City Council President Darrell Clarke, a reaction to the "surprise" announcement that soda tax revenues would go into the general fund?

    "Oh, absolutely," replied Clarke in an interview Thursday. "At the end of the day, we have some very dangerously low funding balances and we need to have strategies to address that, and, not last-minute attempts to put revenue on the table to deal with that."

    Is Philly fiscally healthy?

    Clarke's resolution calls for hearings to be held this summer to discuss the "true financial health" of the city. According to the Pennsylvania Intergovernmental Cooperation Authority, in a report released at the end of last month, the city's general budget balance is projected at $70.2 million, which is almost $1 million more than what had been projected in Kenney's Five-Year Financial Plan, which is also set to be voted on by City Council next week.

    But in calling for the hearings, Clarke cited the five-year plan, saying that if no measures are taken, the balance could drop as low as $15 million by 2018 if no new revenue measures are enacted.

    "Utilizing kids as a shield... that's a disgrace. It was disingenuous and it set a really bad tone." – City Councilwoman Maria Quiñones-Sánchez

    According to the mayor's five-year plan, the fund balance is projected to be at $38 million in 2018, but Kenney's administration has set a goal to bring that fund balance up to just over $200 million to ensure the city's fiscal health.

    Clarke worried that if this balance – which is the difference between the city's obligations and its assets – continues to drop, it would hurt the city's credit rating, making it more expensive to borrow funds in the future.

    In a statement announcing the summer hearings, Clarke said the first payment of $30 million in funding from the soda tax is expected to go toward the city's fund balance in 2018.

    But, he said, depending on how the summer hearings unfold, there could be many changes to how the city spends its money well before 2018.

    "[We're] going to be talking about a lot of things. We may have to talk about cutting back on expenditures. If we don't have the money, maybe we shouldn't spend the money that we don't have," he said. "As we move ahead, we are probably going to talk about zero-based budgeting in a significant way."

    A 'zero-based budget'?

    Zero-based budgeting is a method that views every city agency as starting at zero each year and having to justify every expense, instead of traditional budgeting that assumes each city agency rely on a baseline of funding from the year prior. Its a method that has been discussed for the city's budget, since at least last year.

    But if Clarke wants to re-evaluate the city's finances, why does he support council's initial approval of the new tax on sugar-sweetened drinks and diet sodas?

    It's because, Clarke said, he felt the tax plan that came out of committee on Wednesday was less of a compromise and more of a collaboration between council and Kenney's office.

    "It was a collaboration of the members and the administration working on achieving laudable goals of being able to do pre-K and to rebuild our infrastructure. I can say I would rather have seen the rate lower," said the council president. "You know, we got what we got, we need to move ahead. We need to ensure that the programs function in a way that it benefits all of the citizens of the City of Philadelphia."

    Other councilmembers said they had similar feelings about the new tax; some of the most vocal opponents said they could see some some positives in the 1.5-cent-per-ounce proposal.

    City Councilwoman Maria Quiñones-Sánchez (D, 7th District) said that she liked the mayor's goals, but felt decisions about how money soda tax revenues would be spent merit "further council scrutiny."

    She said that while the funds raised by the tax are intended to be used for laudable programs, the mayor's office was "disingenuous" by not detailing, in the first place, how some of the money would be used for the fund balance.

    "Utilizing kids as a shield... that's a disgrace," she said. "It was disingenuous and it set a really bad tone."

    Republican Councilman-at-Large Al Taubenberger, who attended an anti-soda tax rally with Quiñones-Sánchez and Jannie Blackwell (D, 3rd District), said he voted against the reduced rate soda tax on Wednesday.

    Even still, he feels it could provide some good to the city.

    "I'm still concerned... We need jobs and, as I've said all along, we are putting this tax all on one industry," said the councilman in an interview. "But, on the other hand, the mayor has a fabulous plan."

    He also agreed with Quinones-Sánchez, saying the mayor's office should have been more upfront about the fund balance.

    "We weren't happy about that," said Taubenberger. "It should have been talked about before."

    But Councilman Bobby Henon (D, 6th District), long a proponent of the mayor's sugar-sweetened drinks tax proposal, said the fund balance issue was indeed discussed in the past.

    And, he's correct. The mayor's budget proposal, from March, included discussion of the fund balance.

    "This wasn't a surprise to me," Henon said. "It was part of the budget hearing."

    Yet, if it was, Taubenberger didn't hear it.

    "I can't remember it being talked about," he said, when told the balance was part of the mayor's initial budget. "That's a big thing to miss. I don't think I did."

    Asked just how he felt about the revised sugar-sweetened drinks tax, now that it has passed through committee, Henon said he still supports the plan, saying Kenney's "good leadership" will help bring much-needed programs and revitalization efforts for the city and its residents.

    "I think this is absolutely the right decision for our city," said Henon.

  • CBS Philly - June 9, 2016

    Opposition Mounts As Beverage Tax Passes City Council Committee

    PHILADELPHIA (CBS) — Opponents of the Philadelphia beverage tax reacted as the 1.5 cent per ounce increase on the amount soda and other sugary drinks will cost inside the city emerged from City Council committee, claiming the majority of residents oppose the tax and will change their behavior to avoid it.

    During an interview with Chris Stigall on Talk Radio 1210 WPHT, Jared Walczak, Policy Analyst for the Center for State Tax Policy at the Tax Foundation, said people are not going to buy as much sugary drinks following the passage of this bill.

    “You’re going to have people shifting away from these beverages, either because they’re going to consume less of them or they’re going to engage in tax avoidance strategies buying outside the city. At $4.32 in taxes on a 24 pack case, there are going to be some people who find it rather convenient, especially is they live on the outer rim of the city to buy outside. We don’t know how many people will do that, but we do know that it will have an impact, that there will be fewer purchases. That’s going to change the revenue bottom line.”

    Larry Ceisler, a spokesman for No Philly Grocery Tax, told Stigall that as this process has dragged on, more and more people turned against the idea of the additional tax.

    “The more people found out about it, it was like peeling the onion, the uglier it got. I think last night was the culmination of it. What’s you had last night was, hey, not all the money is going to pre-k and then you know what, we’re going to tax diet soda too. In fact, we did a poll in March when this thing first came out and I can tell you that the majority of Philadelphians supported the tax because they wanted pre-K. We did a poll at the end of last week, now after everybody’s gotten all the information, and an overwhelming majority of Philadelphians oppose this tax.”

    Walczak also disputed the claim that this will force people to make healthier choices.

    “If you’re taking people who are drinking diet soda and pushing them into other untaxed things, maybe to get their sugar fix because some people are just looking for that sugar fix, you might actually have people consuming less healthy beverages or less healthy options because this tax is pushing them away from their diet soda choices.”

    A final vote will be taken on the bill next week by the full Council before it is sent to Mayor Jim Kenney.

  • Chestnut Hill Local - June 9, 2016

    A humorless political joke

    Like most folks, I enjoy a good joke. Having grown up watching Johnny Carson, I learned the elements of how a joke is constructed. There’s the premise,“a goat walks into a bar,” and the punchline, “next time, I’ll wear a hat.” It’s the little story between the premise and the punchline that makes it a real joke.

    In January, our new Mayor announced the premise. He wanted to create universal pre-K and pay for it with a soda tax. With that, he set this town on fire with debate at every level: Facebook, Twitter, op-eds, radio and TV ads. Opposing coalitions were formed, and millions have been spent.

    The issue has been framed to suggest that we’ll have pre-K if the tax is adopted and we won’t if it isn’t. That’s the premise. The punchline is that, even with this very controversial tax, pre-K is a distant, long shot.

    You see, Jim Kenney’s plan only addresses three years and is already obsolete. It claims a budget of $60 million annually, but that is based on minimum wage salaries. Kenney acknowledges the budget will increase in order to attract quality candidates. Further evidence the tax won’t cover the cost of universal pre-¬K is that the Mayor plans to approach the state, businesses and philanthropies to cover millions more in costs. This is not a real plan.

    The devil is always in the details, but these are uniquely vexing. With the most specious of funding plans, Kenney says he wants to add 10,000 taxpayer-supported pre-K slots by 2020. In the unlikely event he succeeds, that will still leave 9,000 children in the cold. Not quite “universal”.”

    As a funding base, soda is the last product to which you want to tie education. Soda faces a 30-year low in consumption and will shortly be surpassed by bottled water as America’s favorite beverage. In Philly, consumption has dropped 24 percent among Millennials.

    Did Kenney learn nothing from the special cigarette tax that only Philadelphians pay? It was adopted to fund schools, but the tax reduced consumption and proceeds. One step forward, one step backward.

    In another half-¬hearted effort to fund education, our pols imposed a “special” state sales tax increase that only applies to Philadelphians. Plainly, that didn’t work either.

    The things that seriously afflict our city do not result from drought, poorly constructed levees or economic decline. Our schools, many pensions and our prosperity have all been trusted to politicians, and administration after administration has failed us. It takes a long time to develop a $5.7 billion shortfall in our pension fund. Our schools did not become a dystopian nightmare simply because of Mayor Nutter. We did not become the poorest big city in the nation overnight. That distinction required decades of political neglect.I think our problems resist resolution because our pols aren’t really committed to solving them. Like bad dermatologists, they treat your acne without ever curing it.

    Please indulge me as I turn my attention to Kenney’s announced plan to pump $600 million into recreation centers, libraries and parks. Sounds dandy, does it not? The truth is the Mayor and Council have neglected these assets for decades and this torrent of cash is intended to catch up on long-deferred maintenance. This will not be a giant leap forward.

    And, let’s take another look at that flashy $600 million figure. Half will be borrowed from Wall Street and the balance ($300 million) will be raised from businesses and the philanthropic community.

    First, that’s not a real plan. Second, these are the same folks he’s going to hit up to close the gap on universal pre-K.

    The Kenney/Clarke push for community schools also relies on the resources of businesses, churches and charities. All of Kenney’s “plans” heavily rely on a tin cup.

    As I see it, Kenney is amusing us with a series of bad ideas because he lacks good ones. The soda tax was twice rejected by Council, yet he desperately pins his hopes to it. Fancifully, he even intends the tax to contribute $26 million annually to the pension fund. Sounds dandy, does it not? The truth is, at that rate, pensions won’t be fully funded for over 200 years. And, as soda consumption plummets, so will the revenue. This is not a real plan.

    While Carson definitely prepared me for politics, the joke is on our elected officials. Despite their most substandard and compromised efforts, our universities, restaurants and theaters continue to flourish. Our parks and rivers provide recreation and peace. Coffee shops and niche amenities abound.

    To our great relief, we see how very little impact pols have on our lives. Of course, it’s very different if you’re poor. Not even The Great Carson can assuage their neglect and pain.

    So, I thank God for my blessings, one of which is the ability to know a joke when I hear one.

    Keep the main thing the main thing.

  • Philadelphia Daily News - June 9, 2016

    Byko: Kenney's soda tax 'win' might cost him

    On your score cards, it's a preliminary win for Jim Kenney and a loss for the beverage industry - and not just the sugary piece of it. Other losers are soda drinkers and retailers who sell it. The mayor's win came despite a rabbit punch to City Council Wednesday afternoon.

    The rabbit punch came in the form of an admission during the hearing by city finance director Rob Dubow that - did we neglect to mention this? - a large chunk of the tax would be used to fill a hole in the city's fund balance, which is important to Philly's bond rating.

    That's when mostly blindsided Council members learned that once (or if) they pass the new, improved soda tax at its June 16 session, $41 million will go to the fund balance rather than to pre-K seats, improvements to parks, schools, libraries and rec centers.

    Was that deceit by the administration? Dishonesty? Politics?

    "We heard it was all about the kids, all about the kids," complained Councilman Bill Greenlee. "Now we heard it's also about the fund balance."

    "What happened last night was vintage Vince Fumo," said one long-time political observer. "Keep them in the dark until the last minute and spring it on them." He didn't have to remind me Kenney learned the art of politics from the once all-powerful, and later felonated, state senator.

    Although he asked for an astronomical 3-cent-an-ounce tax on sugary beverages to fund "quality, affordable" pre-K, plus improvements mentioned above, what Kenney got was a tax cut in half, to 1.5 cents an ounce, but extended to snare diet soda. The tax pain would be lessened, but also broadened.

    This was Kenney's first major mayoral initiative. All along he said he (and "the children," of course) couldn't afford to lose and also said there was no other way to fund it.

    There were other ways, but he wasn't interested in them. He had picked a scapegoat, Big Soda, and he was going to shake them down "for the school children," just as alcohol by the glass and tobacco had been shaken down earlier.

    First the city drives soda out of the public schools, then demands it pay to fund pre-K. That's chutzpah.

    During the months-long fight, Kenney cavalierly told people, such as the poor on whom the repressive tax would fall the heaviest, they could avoid the tax by switching to diet soda.

    Now they can't.

    So Kenney won this round, but it was a decision, not a knockout, and his cornerman is telling him he's got a few cuts on his red face that may leave scars.

    Do you think most on Council enjoy being played for fools by the administration withholding the diversion of money to the balance fund?

    Despite being a creature of Council, Kenney did not show that body the respect it demands. He played bait-and-switch on them.

    Not-so-coincidentally, one day later City Council President Darrell Clarke called for hearings this summer to examine the city's operating budget and its financial health. In yo' face, Mr. Mayor.

    Early on, Kenney felt he had nine votes for his insanely excessive 3-cent-per-ounce tax on sugary drinks, but that got derailed as often happens in politics. He might have had promises that melted in the face of consumer resistance.

    A David Binder Research poll done last week showed only 38 percent of Philadelphians favor the 3-cent-an-ounce tax.

    The reduction of the tax from 3 cents to 1.5 cents apparently gave him the votes he needed. Philadelphia now is poised to become the first major city to tax soda. It's been tried some 30 times before, but only tiny, wealthy, left-wing Berkeley, Cal., passed one, at only 1 percent. If the bill passes on Thursday, Philly will best Berkeley by 50 percent. We're No. 1. Take a bow.

    Right up to the end, there was confusion as to which way Council would go, pondering the administration's 3-cent-an-ounce tax termed "ridiculous" by Clarke, who circulated 10 other options for coming up with the money.

    On Tuesday, one day before the Council meeting, Councilwoman Cindy Bass sprung a proposal to increase the city real estate tax by nearly 7 percent over five years.

    Before you could say whaaat?, it was withdrawn. I mean, about an hour later Bass yanked it, saying Kenney had the necessary nine of 17 votes.

    And so he did on Wednesday.

    Will he have the same nine on Thursday?

    Probably, but it's conceivable he could lose some votes to teach him a lesson about disrespecting his former colleagues.

  • Fox News - June 9, 2016

    Philadelphia set to pass 1.5 cent-per-ounce soda tax

    PHILADELPHIA – Philadelphia could soon become the first major U.S. city with a sugary drinks tax after a city council committee voted Wednesday to approve an amended version of a soda tax proposal that would set a 1.5 cent-per-ounce tax on sugary and diet drinks.

    Democratic Mayor Jim Kenney initially proposed a 3-cents-per-ounce tax on sugary beverages only, but he lacked the votes needed to secure it. He wants the tax to pay for universal prekindergarten, community schools and park improvements.

    Critics balked at the proposed tax, saying it was too steep. Wednesday's compromise adds diet soda to the list and slashes Kenney's initial proposal in half, to 1.5 cents-per-ounce. The amended plan is expected to raise $91 million over the next year, slightly less than the $95 million projected under Kenney's original pitch. A full council vote is scheduled for Thursday.

    "You don't always get everything you ask for," said Kenney spokeswoman Lauren Hitt. "That's the meaning of compromise."

    Before the committee's vote, Democratic City Council President Darrell Clarke said it likely would "leave some people with a sour taste in their mouth." Afterward, Clarke expressed concerns about how the tax would be implemented, such as including diverse labor participation in recreation center building projects and ensuring that Philadelphia's most vulnerable children benefit from pre-k expansion.

    "These are taxpayer dollars, and we want to make sure these dollars are being spent in an equitable manner," Clark said. "We want to make sure young people have an opportunity to get an early education."

    Cities including New York and San Francisco have tried to pass similar taxes, but have failed. Berkeley, California, is the only U.S. city to approve such a tax.

    Philadelphia's proposal has drawn national attention, with former New York Mayor Michael Bloomberg jumping into the fray and spending thousands of dollars on ads supporting the measure. Democratic presidential candidates Hillary Clinton and Bernie Sanders took opposite sides of the issue when they campaigned in Pennsylvania ahead of the state's primary.

    The soda industry also spent millions of dollars on ads to block the proposal. It is expected to sue the city if the tax is adopted.

    Both sides dug in hard ahead of Wednesday's vote, with people shouting "No new tax!" and "Kids can't wait!" across the council chamber. Council members and the mayor worked behind the scenes for much of the day before emerging with the compromise.

    In California, the beverage industry lost a fight over warnings appearing on ads for sugary drinks.

    A federal court rejected an effort to block a San Francisco law that would require health warnings on the drinks. That decision clears the way for the law to take effect in July.

    A final vote on the Philadelphia tax is expected June 16, the deadline for adopting next year's fiscal budget.

  • Philly.com - June 9, 2016

    Featherman: 'Soda tax' classic bait-and-switch

    Bait-and-switch.

    That’s the policy used by the City of Philadelphia to take more money from its residents and visitors through the so-called soda tax - and it’s nothing new.

    Remember back in 2014 when the Philadelphia Parking Authority raised the parking meter rates in Center City, saying it wasn’t about money, but rather to increase turnover so the spaces weren’t tied up all day? They said that there will be plenty of affordable garage spaces open to the public.

    Sounds like a noble public policy goal, right? But meter rates went up immediately after that. Then City Council and the mayor passed a law to raise the garage taxes to a whopping 22.5%. That’s in addition to the many other taxes garage operators pay including use and occupancy, real estate and storm water runoff.

    At SEPTA regional stations, parking even doubled.

    Yep. Classic bait-and-switch.

    They peed on you, but told you it was raining. And it’s happening again via the “soda tax” -- this time in the name of “the children.”

    But is it really about children, or are the politicians using our children?

    “We heard it was all about the kids, all about the kids,” Democratic City Councilman Bill Greenlee was quoted as saying in today’s Philadelphia Inquirer, adding, "Sometime this afternoon, we heard it's also about the fund balance."

    Joe DeFelice, the Chairman of the Philadelphia GOP, was quick to pounce on Greenlee’s statement, telling me, "Soda makes you fat, they said. Drink water, they said. Well, guess what? City water rates are expected to go up 10%. The message from City Democrats to Philadelphians is clear: Don’t drink anything, and eat dirt.”

    [Philly.com reported yesterday that the Water, Sewer and Stormwater Rate Board will raise Philly water rates by 10% over the next two years.]

    Soda’s bad for you. Sugar’s bad for you.

    Yep.

    We get it.

    But a lot of things are bad for you – and, arguably, the four major food groups in Philadelphia (cheesesteaks, hoagies, soft pretzels and water ice) will do you much more harm than a couple of swigs of Coke or Pepsi.

    Why not tax them? [Now don’t you get any ideas!]

    But regardless of where you stand on sugary beverages, there’s no question that no one on earth outside of City Council knew – until yesterday – that diet beverages were part of the legislation.

    Nor did they admit, until recently, that a big chunk of the money isn’t going to the kids, but is going to a general fund to keep our bond rating satisfactory.

    Why can’t they tell the truth? Why do they have to lie in the name of children? Why do they have to say it’s a sugar tax when it’s much more than that?

    So don’t call this a “sugar tax.” It’s not. Don’t call it a “soda tax.” It’s not.

    One councilwoman even wanted to create a “container tax.”

    To her, I’d say, “Can it!”

  • Billy Penn - June 9, 2016

    After soda tax switch, Philly City Council wants to know: Why are we broke?

    City Council members were surprised to learn Wednesday that some of the revenue from a soda tax the body preliminarily approved will go toward bolstering the city’s coffers — and now they’re planning hearings to investigate “the true financial health” of the city.

    Late Wednesday, a revamped 1.5 cent-per-ounce soda tax got a big thumbs up from City Council, but the public and council members learned that afternoon that not all the estimated $400 million in revenue over the next five years will go toward Mayor Jim Kenney’s initiatives like pre-K, community schools and parks and recreation.

    If the city’s beverage tax is passed as is, some of the revenue will go toward boosting the city’s fund balance — that’s the difference between the amount of money the city spends versus what it brings in. Financial planners recommend cities have a “healthy” fund balance in order to have some financial flexibility. So think of it this way: You’d want a positive balance in your checking account, rather than having expenses exactly match income. If you don’t, it can negatively impact your credit rating.

    The city aims to have its fund balance reflect 6 to 8 percent of revenue. That would put a healthy fund balance at somewhere in the mid-$200 million range. This year, the city’s fund balance decreased from $150 million (already low) to $70 million. It’s projected to dip below $42 million in fiscal year 2017 and could reach as low as $15 million in fiscal year 2018 if there are no new sources of revenue. For context, the city spent $40 million last year on the Free Library alone.

    Why’d the fund balance drop so low? Finance Director Rob Dubow said Wednesday it had to do with ballooning labor costs, pension obligations and city contracts.

    Today, Councilwoman Maria Quiñones-Sánchez introduced a resolution on behalf of Council President Darrell Clarke that called for the City Council Committee on Fiscal Stability and Intergovernmental Cooperation to hold hearings this summer on what council members learned this week about the city’s sagging coffers.

    “City Council is deeply concerned about new information we have received in the last days of the budget process regarding Philadelphia’s true fiscal health,” Clarke said in a statement. “The legislative branch and the public we represent deserve greater transparency in how public dollars are raised, allocated, and utilized.”

    Most City Council members are in favor of increasing the city’s fund balance, but they say they didn’t find out until mid-afternoon Wednesday — just before their “Committee of the Whole” voted — that soda tax revenue would go toward the fund balance.

    During an evening City Council hearing Wednesday, multiple council members chastised the administration for failing to specify earlier that that’s where a portion of the money would go toward. Councilman Bill Greenlee asked Dubow if council members can expect greater transparency in the future. Dubow conceded the point: It should have been brought up sooner.

    “We heard it was all about the kids,” Greenlee said. “Sometime this afternoon we heard it’s also about the fund balance.”

    In a statement released after the vote was taken by the Committee of the Whole to approve the tax — it’ll have to be formally voted on again next week before it can head to the mayor to be signed — Clarke said legislative staff members discovered “weeks ago” that Kenney’s original 3-cent-per-ounce proposal would raise more revenue than needed to fund his initiatives.

    However, several members were bothered that they weren’t explicitly told until Wednesday that $41 million of the anticipated $300 million in soda tax revenue over the next five years isn’t earmarked for the mayor’s initiatives.

    “It was absolutely a surprise to Council,” Clarke’s spokeswoman Jane Roh said, “and a failure to disclose information that was beneath the level of a seasoned former colleague.”

    She was referring to Kenney, who before he was elected mayor last fall was a longtime member of City Council, himself coming out against proposed soda taxes in the past.

    His spokeswoman Lauren Hitt said the fact that some cash from the soda tax would be going to the fund balance was in the budget “from the get-go,” but it “didn’t get a lot of public acknowledgement.” She said the administration initially wanted to send $19 million of soda tax revenue to the fund balance, but that was increased to $41 million at the request of council members during negotiations.

    Council is in session this morning, but we have a call into freshman At-large Councilman Allan Domb, who apparently led the charge in plugging the budgetary holes.

    Other city council sources indicated members didn’t find out until mid-afternoon Wednesday that money would go toward the fund balance. One council aide said that though it may have been said “in passing” that the city’s fund balance was low, it wasn’t explicitly communicated that revenue from a beverage tax would go toward bolstering that.

    The mayor’s five-year plan released earlier this year projects fund balances to be:

    FY17 – $42 million

    FY18 – $38 million

    FY19 – $48 million

    FY20 – $71 million

    FY21 – $127 million

    However, those projections included new sources of revenue. Without new sources of revenue, the general fund balance could fall as low as $15 million in fiscal year 2018, when the administration plans to divert $30 million worth of soda tax revenue into the fund.

    Here’s what Kenney’s Chief of Staff Jane Slusser testified to in March with regard to the fund balance:

    “Despite recovering from the recession of 2007-2009, the City still operates with very narrow margins, and any moderate change in revenues or expenditures can create real challenges within the City’s budget. Each fiscal year of the Plan ends with much lower fund balances than recommended by government experts. In FY18, the fund balance reaches a low of $37.7 million, less than 1% of revenues — and peaks in FY21 at $127 million — 2.8% of revenues – still less than half of the City’s 6-8% goal. Having a healthy fund balance would allow the City to have greater flexibility, mitigate current and future financial risks, and to ensure predictability of services.”

    What the contribution to the fund balance will do is at least slightly bolster the city’s general fund, which is something closely watched by bond rating agencies. The city’s fund balance dipped into the negative in 2010 after the recession, and Moody’s downgraded the city and rated its outlook as negative.

    Since August 2010, the city’s outlook has been stable. But the bond rating agency has continued to recommend the city strengthen both its fund balance and its pension fund, which is staring down a $5 billion pension obligation hole, in order to qualify for a rating upgrade.

    Those who didn’t like the mayor’s proposed tax to begin with pounced Wednesday, saying the administration “pulled off a bait and switch job on Council and the citizens of Philadelphia.”

    “This tax was never about the kids,” Teamsters Local 830 Secretary Daniel Grace said in a statement. “It was about paying down the city’s debt service. The Sugary Drinks Tax is a sham and I doubt it will survive the legal challenge that’s surely to come.”

  • Metro - June 9, 2016

    The Ernest Opinion: Desperation, lies and soda … Philly got bamboozled

    I had a crazy dream on Wednesday night.

    I was wearing a Sixers jersey running across a bridge with a crew of my West Philly neighbors dumping tons of soda down the Schuylkill River. It was like the Boston Tea Party, except we were black. And then I woke up, cursed out loud at how I wish such a response would work in 2016 and went back to bed.

    Philadelphia will likely become the first major U.S. city to pay a tax — 1.5 cents-per-ounce — for drinking a sugary beverage. For every average 12-ounce can of either regular or diet soda, Philadelphians can expect to pay an additional 18 cents. Sigh.

    On Wednesday, the majority of City Council gave Mayor Kenney their blessing on a soda tax — but under the condition that it be reduced to half of his initial 3 cents-per-ounce proposal.

    However, Kenney didn’t get this approval by making a compassionate case for helping fund universal pre-K and other community endeavors — he struggled with that. Instead, like Chicken Little, out of the sky came the announcement that some of the soda tax residuals would go to the city’s fund balance in early years.

    Fun fact: Kenney’s administration never previously said anything about the tax going toward the city’s struggling fund.

    Translation: Once this soda tax drops, pre-K and other recreational plans just might have to wait a few years before they get the full benefit initially touted.

    You just don’t drop a bomb like that in the eleventh hour unless you feel as though you’re going to sink. With all of the proposals brought up surrounding property taxes, container taxes and other plans to ax the soda tax altogether, Kenney knew it was very easy for his proposal to fall short of the votes. It became very clear that his administration pulled a fast one and City Council compromised out of fear of appearing extremely ruthless to his initial budget.

    “I hope in the future we get full disclosure,” said Councilman Bill Greenlee to Kenney’s finance director Rob Dubow during the Wednesday budget hearings. “We should have brought it up earlier,” Dubow pathetically replied back.

    Anyone with an ounce of common sense knows that such a major detail doesn’t accidentally get left out of the conversation. This was a trap, a political set-up to force City Council to relinquish power. With the city’s crazy pension costs, rising labor costs and developmental contracts looming, Council wasn’t going to defy a budget that was skewed to largely address that. So the soda tax, initially pitched as a progressive education policy move, now looks more like a funding buffer for America's poorest major city.

    In other words, progressives got bamboozled. At this point, we shouldn’t seriously trust how this money will be spent in the long term. There is legitimate speculation that some of the new money from this ambiguous fund would be used for the upcoming District Council 33 contract negotiations that Kenney is in desperate need of revenue for.

    The deception is real and my soda is getting taxed. I might as well stock up now before the apocalypse.

  • CBS Philly - June 8, 2016

    Business Owners Fear Sugary Drink Tax Will Send Customers Out Of Town

    PHILADELPHIA (CBS) — Reaction to Philadelphia’s City Council preliminary passing of a sugary drink tax is strong near City Line Avenue, which divides Philadelphia and Montgomery County. There are many concerns that people will just cross the street over to the Montgomery County side to get their beverage fix.

    As a bodega owner in Wynnefield, Kelvin Rodriguez is watching the sugary beverage tax debate very closely.

    “The Coke and Pepsi products, I have a lot of drinks here, they sell pretty good,” said Rodriguez, who owns the 59th Street Mini Market. “If the price goes up, I believe it’s not going to be the same anymore.”

    Rodriguez is thankful that the tax was reduced. Instead of the 3 cents per ounce proposed by Mayor Kenney, a city council committee passed a compromise of a 1.5 cent tax for every ounce of beverages with added sugar or artificial sweeteners.

    “The whole community, the customers, there’s a lot of people out there, they don’t have no jobs,” Rodriguez said. “It will be hard for them to pay even more money.”

    The city intends to use the estimated $91 million the tax would raise to pay for Universal Pre-K, schools, recreation centers and to shore up the General Fund.

    Darryl Hunter of Wynnefield has two pre-school aged children and said he supports the beverage tax.

    “Times is hard,” he said. “You definitely don’t want to pay more for anything, but if it means that everybody, kids everywhere are going to have Pre-K, then you’re still saving money because your kids, you don’t have to pay for daycare.”

    Daily soda drinker Hattie Williams feels the tax unfairly burdens the poor. She won’t stop drinking soda, but will get it elsewhere.

    “All these taxes they keep rising, property taxes, cigarette taxes,” Williams said. “They keep saying the money is going somewhere, but it’s not going anywhere. So yeah, I will leave Philly to go get something more cheaper, if it costs me cheaper and saves me money.”

    As a consolation to store owners, the council committee also advanced a bill that would provide tax credits to businesses that sell healthy beverages.

    A final vote of the full council on the bills is expected to happen next Thursday.

  • Al Dia - June 7, 2016

    OP-ED: 'Soda tax' leaves many issues unaddressed

    As the debate about the proposed sugary beverage tax continues, one thing has become abundantly clear: We all want pre-K. Research shows children who participate in quality pre-K programs are more likely to graduate from high school and earn more over their lifetimes. We all want our city’s children to enter kindergarten on track and prepared to thrive.

    Given our common priority, we can have a constructive dialogue about how to achieve strong pre-K programming across the city, in the best interests of all Philadelphians. Recently, our City Council President expressed some doubt that a tax of 3 cents per ounce on all beverages with added sugar would have enough support in City Council to pass. His statements reflect the feelings of many leaders and stakeholders: The proposal, as it stands, leaves many issues unaddressed for the Hispanic community.

    We raise these issues precisely because pre-K is so important. For 15 years, our Esperanza College has prepared childhood educators at the certification through B.A. level. It is just one way we strengthen and empower Philadelphia’s Latino community through education, economic development, and advocacy. Our organizational commitments give us pause, due to the uncertain impacts of the city’s plan on the economic prosperity of those we work to support every day. We are simply asking for clarity regarding how this plan would impact the economic health of our neighborhoods, and how the pre-K improvements would be rolled out equitably.

    Our first concern is about who would bear the burden of such a tax. It is broadly acknowledged that a “sugar tax” is regressive, and would hit our low-income residents and grocers the hardest. Low-income families cannot drive to another county to avoid the tax, like wealthier consumers with greater mobility will do. They will have to decrease consumption (which could result in the city not collecting the projected revenue for the pre-K program), or stretch their already-limited incomes even further.

    Grocers may absorb the impact of the tax and the decreases in consumption by raising prices across other products, making groceries more expensive across the board for people who already struggle to afford basic necessities. Nelson Martinez, a bodeguero and member of the Dominican Grocer’s Association (representing the largest number of Hispanic small businesses in Philadelphia) tells us: “I’ve been losing money since the city hiked the cigarette and property taxes. Beverages are an even bigger part of our business. I’ve contributed to Philadelphia’s economy for 25 years, but I can’t afford to take another hit. We can’t raise our prices – people will stop buying. What choice will we have? Many small grocers will close; I’ll probably have to leave Philadelphia and go somewhere my business can survive.” If grocers suffer, local jobs may be threatened, and food deserts may be worsened.

    In a recent budget hearing, Health Commissioner Farley stated that if people could no longer afford to purchase soda and juice, they could simply drink water. We agree with the response that this is an elitist point of view. Does the administration believe only the most economically privileged Philadelphians should have options in what they consume? Why not tax all beverages, such as Starbucks, where wealthier consumers already pay $3-4 a cup and may not miss an extra $0.50? Also, if an express part of this plan is to push consumers away from sugar and toward healthier food options, how is this factored into the revenue projection for the pre-K programs, which is the point of the tax to begin with?

    Relatedly, we are concerned about how the pre-K initiative would be implemented. If the projected $95 million in new tax revenue could be collected – even if local consumption decreases —how will these funds be dispersed? Despite numerous budget hearings, there has been no assurance that the funds would improve the existing pre-K providers in low-income communities.

    The city wants to limit access to the new funding to facilities that already have a three- or four-star rating from the state Department of Education. Support for providers who are not at that level depends largely on philanthropic resources not yet committed. If these dollars do materialize, will they target areas where the need for a better pre-K system is greatest? Or will “non-minority” providers with the required rating be financially encouraged to come into our communities and displace our local providers? The initiative has been touted as a job creator, but the current proposal could cause job losses in low-income communities, unless existing community childcare providers receive targeted assistance to benefit from the increased investment in early childhood education. In Esperanza’s view, low-income tax dollars should not disproportionately subsidize the improvement of pre-K in higher-income neighborhoods, nor be used to create a system where our neighborhood providers are unfairly placed at a competitive disadvantage.

    At Esperanza we believe in creating educational opportunities for every child in every community. But we also believe that this can and should happen without jeopardizing the economic growth of low-income and minority communities. The current lack of clarity leaves open the possibility that the tax would hurt the poor. We remain ready and willing to assist the administration in working out the details of a plan to strengthen the pre-K system across our city.

  • Philadelphia Inquirer - June 3, 2016

    Commentary: Philly-only taxes are the problem, not a solution

    There has been a lot of discussion in Philadelphia about a proposed soda tax and, alternatively, a proposed container tax.

    It is argued that the taxes are regressive and will fall most heavily on those least able to bear them. Obviously true.

    It is argued that the goals, primarily universal pre-K and rebuilding infrastructure, are laudable. Again, obviously true.

    There are other ways to accomplish the goals, however, and history tells us that this tax-creation approach is counterproductive.

    Philadelphia is not on an isolated island. Whenever Philadelphia creates a tax that does not apply on the other side of City Line Avenue, or has a business regulation that does not apply on the other side of City Line Avenue, or has tax rates higher than on the other side of City Line Avenue, there is a predictable reaction. We lose businesses, jobs, and taxpayers. It's really that simple. This is supply-and-demand economics, proven by its application in Philadelphia over three generations.

    Philadelphia is a great city. We have some of the finest universities and hospitals in the world. We are in the middle of the most populous part of the country, midway between Washington and New York. We have access to an important port. We have ready access to both freight and passenger railroad service. We have public transportation infrastructure that few can match. We have a vibrant and walkable Center City.

    With all that going for us, how in God's name did we become, by many measures, the poorest big city in America?

    Here's one reason: small-time politicians who don't care about the city's future but only about what they can promise to get reelected.

    How many times have you read about some group or another thanking a City Council member for getting it the money it needed for some worthy project. Rest assured that councilman did not cover the amount out of his personal checkbook. The prevailing governing philosophy of Philadelphia is: Come up with an idea that will make political supporters happy? Let's do it! We'll just raise taxes again to pay for it. Or create a new regulation.

    Here is the circle of governance created by that philosophy: Politicians give supporters programs to get reelected. Taxes are raised to pay for the programs. Businesses, jobs, and taxpayers flee the city. The diminished tax base cannot pay for the programs. The programs need to expand to meet the needs of the poorer remaining population and those attracted by the programs. The politicians raise taxes again and create more programs. More businesses, jobs, and taxpayers flee the city. Around and around.

    In the case of the soda and container taxes, they target a specific industry. Fair taxes are broad-based, but not the current proposals. And the biggest losers would be the retailers who have already lost business because Philadelphia has a sales tax that is two percentage points higher than the surrounding counties' and a $2-a-pack tax on cigarettes that does not apply anywhere else. Notice the signs advertising cigarettes just outside the city limits?

    Some proponents of the soda tax talk about the health benefits that would result. I don't need City Hall to tell me what I should drink. If they really cared about our health and thought that this was an answer, why didn't they introduce it as a revenue-neutral change in tax policy, lowering the wage tax dollar for dollar? Why not tax candy? Our beloved Tastykakes? For that matter, sugar itself? Hey, Philly cheesteaks aren't exactly health food, are they?

    Supporters of the tax are right about the need for and value of universal pre-K education - although their plan is not universal and will not lead to the quality our kids deserve. However, the answer is not to promote policies that encourage jobs to leave and condemn more children to grow up in poverty. We already have one of the highest tax burdens in America.

    Instead, re-prioritize the budget. If something in there does not pay directly for public education, police, fire, sanitation, or the infrastructure needed to run a city, it should be on the table long before tax increases. Corporate welfare programs - a.k.a. economic development - should be first on the chopping block.

    The same thinking that got us into this problem now has a solution. And it's the same "solution" - new Philadelphia-only taxes - that created the problem. Surprised?

  • Philadelphia Business Journal - June 2, 2016

    Opinion: Why proposed soda tax 'doesn't fit the bill'

    Mayor Jim Kenney’s plan to impose a 3 cents-per-ounce tax on more than 1,000 beverages will hurt the many communities our members serve and the tens of thousands of Philadelphians whose families depend on the work at grocery stores across the city. The food industry employs over 12,000 Philadelphians.

    The mayor’s proposal would drastically raise the shelf price of common grocery items – from soft drinks, fruit juices and teas to sports drinks and even flavored waters. In many cases, the tax would be more than the current price of the product itself. Consumers, for example, would have to pay a whopping $1.92 in tax on a 64-ounce family size iced tea, a 200 percent price increase.

    Our members strongly support Mayor Kenney’s plan to expand pre-K programs and to invest in municipal infrastructure and increased services at Philadelphia schools.

    Yet these worthy goals must be funded through a smart tax policy that encourages economic growth and attracts business to Philadelphia.

    Mayor Kenney’s proposal doesn’t fit the bill. It will hurt Philadelphia’s poorest communities while also placing new obstacles in the way of economic growth and frustrating the city’s successful efforts to expand food access. About 30 supermarkets and many full service convenience stores have opened in the past decade.

    This tax would further strain the budgets of working families who struggle each week to put food on the table. The simple fact is that working families in some of Philadelphia’s poorest neighborhoods will end up bearing the brunt of this regressive proposal because middle class consumers will easily be able to evade this tax by shifting their weekly shopping trips to supermarkets in the suburbs.

    While Mayor Kenney has repeatedly said that businesses will be able to absorb this tax, we have consistently heard from our members that they would be unable to absorb a tax at any level and they would be forced to pass its entire cost onto consumers. Food Merchants typically operate on a 1 to 2 percent profit margin after taxes. There is simply no place available in their budgets to absorb this onerous tax.

    This proposal would also deal a major blow to many of the city’s successful initiatives to increase grocery access in the underserved neighborhoods known as food deserts. Teaming up with the Commonwealth, city officials have successfully expanded grocery access by working with local corner stores to improve their offerings and by utilizing innovative financing measures to support supermarket expansions. There are even provisions in the city zoning code designed to incentivize grocery store development.

    These initiatives have made Philadelphia a national model for improved food access and led to a wave of store openings in recent years that has greatly expanded access to healthy food options in some of the city’s poorest communities.

    Philadelphia’s successes were even touted by First Lady Michele Obama in a 2010 visit to a newly opened grocery store serving the West Oak Lane section of the city – a neighborhood that had been without a supermarket for more than a decade.

    Beverages are the single largest-selling item in supermarkets, accounting for about 20 percent of the average supermarket’s sales. Given the razor-thin margins under which most groceries operate, this tax would make it very difficult to continue to build on these successes.

    And while we are pleased that City Council President Darrell Clarke has voiced his opposition to the mayor’s original 3 cents per ounce proposal, a tax at any amount would do serious damage to the 195 food stores we represent in the city – as would Councilwoman Blondell Reynolds Brown’s alternative proposal, to levy a 15-cent tax on beverage containers.

    In addition to providing groceries to Philadelphia residents, each supermarket, convenience store and corner store in Philadelphia is an economic engine that powers families into the middle class.

    Each supermarket provides good-paying jobs to 200 to 300 Philadelphians. And operating a small corner store or grocery provides a ladder of opportunity for many families – especially immigrants – in Philadelphia’s poorest communities.

    When weighing different proposals to fund the mayor’s initiatives, City Council should eschew proposals that would weaken economic growth in Philadelphia and instead look at implementing comprehensive and broad-based reforms to broaden the tax base. Proposed wage tax and business income and receipts tax reductions should be delayed as well.

    At the same time, the city must aggressively target tax evaders, who owe hundreds of millions of dollars in taxes that could easily pay for these programs. Taxpayers who play by the rules, like PFMA members and the many families who shop with them, should not be subsidizing delinquent taxpayers.

    It has become clear to us in recent weeks that the people of Philadelphia have turned against this wrongheaded funding proposal. We can see it in the more than 25,000 ordinary residents and more than 1,300 small businesses who have joined the Philadelphians Against the Grocery Tax Coalition.

    And we applaud City Council for taking these concerns seriously and asking tough questions throughout the budget process. As the budget deadline draws near, we now call on Council to come up with real alternatives that preserve the city’s successful food access programs and protect Philadelphia families.

  • Wall Street Journal - May 26, 2016

    Sugary Tax Ideas With a Bitter Aftertaste

    Philadelphia’s plan for a tax on soft drinks does not go down well with Joe Queenan. A tax on kale and other alternatives

    The City of Brotherly Love is gearing up to go to war with the soft-drink industry, seeking to impose a three-cent-per-ounce tax on soda. Other cities have tried, mostly unsuccessfully, to raise taxes on sugary beverages to wean consumers from the fattening drinks. Supporters in Philadelphia share that aim but also have cleverly devised the soda tax so that its proceeds would pay for prekindergarten and other civic programs.

    The planned levy, which seems to be popular with locals and will go to the city council for a vote in June, would nearly double the price of cans of Coke and Pepsi if bought at a supermarket. The beverage industry argues that such a measure is not fair to the soda-loving public, nor to the industry itself, and has spent substantial sums of money to kill the legislation.

    As a person who rarely drinks soda, I have no skin in this game. But the philosophical underpinnings of the proposed tax do concern me, for they seem to lead to a slippery slope that could encourage politicians to impose an even wider array of taxes to discourage self-destructive behavior and pay for underfunded projects.

    One issue is fairness. Why is the city imposing a tax on soda but not on the Delaware Valley’s beloved Tastykakes line of snacks? Why arepeople who stuff their faces with Mars Bars allowed to go their merry way? Why doesn’t the city tax fruit juices or any and all brands of chocolate chip cookie dough ice cream? And why, oh why, doesn’t it tax those revered Italian ices, as odious a dessert concoction as mankind has ever devised?

    If the city’s object is to fund worthwhile projects, then why not extend the tax to other probably hazardous foodstuffs? Mimosas aren’t good for your health, especially bottomless ones. Popcorn drenched in butter isn’t good for your health. In fact, butter itself isn’t exactly a health food.

    Taxing sugary beverages targets the young and the poor. That isn’t fair. If the city wants to raise cash to fix potholes or upgrade antiquated subway stations or hire more police, then why not tax gourmet cupcakes, croissants and granola. Impose a levy on designer macaroons.

    And why stop with foods that are bad for us? I’d love to see a tax designed to deflate the sanctimony of the health-minded. Let’s hit them where it hurts and tax kale. By making them pay more for kale, and maybe even arugula, Philadelphia could rebuild its desperately underachieving public school system by Flag Day.

    Outraged grocers and labor unions have organized protests against the proposed soda tax. But why have many well-heeled residents remained silent? My suspicion is, if the city imposed a three-cent-per-per-ounce tax on Frappuccinos and iced chai, the streets would run white with latte.

    Is the Supreme Court going to weigh in on this? The Cato Institute? Donald Trump? Bernie? If the soda tax succeeds in Philadelphia, will it then spread from Fall River to Fresno? Will certain states—say, New Jersey—offer sanctuary to soda lovers, allowing them free rein to openly drink sweet beverages without fear of taxation. And will seditious Philadelphians be arrested for smuggling in root beer from other states?

    If Philadelphia is serious about raising money for its prekindergarten programs, one obvious solution is to impose a three-cent-per ounce tax on one of the deadliest comestibles known to man. Something that has little or no nutritional value, that’s bad for your physique, that’s bad for your heart.

    The Philly Cheese Steak.

  • Billy Penn - May 25, 2016

    Philadelphia Council President: ‘Divisive’ 3-cents soda tax isn’t happening

    Philadelphia City Council President Darrell Clarke says it’s time to come up with a new solution to fund pre-K — one that isn’t Mayor Jim Kenney’s three-cents-per-ounce soda tax plan.

    “This has been one of the most divisive proposals since I’ve been here,” Clarke said during a budget hearing Wednesday, adding: “Everybody on this side of the table knows it’s not going to be a three-cents-per-ounce-tax.”

    While most of Council agrees expanding pre-K offerings in the city is a good idea, they’re split over how to fund it. Kenney’s administration wants a three-cents-per-ounce tax on sugary drinks. Some Council members might support that at a one or two-cents rate. Councilwoman Blondell Reynolds Brown introduced a 15-cent tax on drink containers that would cover all drinks except baby formula and milk products.

    Meanwhile, Clarke said today that maybe the city shouldn’t be in the business of funding a universal pre-K program at all, saying: “If I have a kid in pre-K, I don’t think the taxpayers should pay for that. I think I should pay for that.”

    Councilman Curtis Jones, Jr., who’s in favor of Kenney’s proposal, responded to Clarke, saying he believes all children deserve access to pre-K, even if their parents can’t afford it.

    No matter what Council decides to approve in terms of funding a pre-K program (and community schools… and an ailing pension fund…), Clarke’s right: This has been a divisive conversation. Clarke said it’s no secret a sugary drinks tax is regressive and will almost undoubtedly impact lower-income communities.

    And in a public conversation with Kenney’s Deputy Managing Director Brian Abernathy during the hearing today, Clarke took the administration to task for not seriously considering other options for funding its priorities.

    “I would ask the administration to think a little more seriously about a broader-based revenue stream,” he said. “We have to go after some kind of broader-based strategy than just taxing poor people.”

  • CBS News - May 24, 2016

    Philadelphia's tax proposal on sugary drinks fizzles with critics

    The Philadelphia city council is expected to vote Wednesday afternoon on a bill taking aim at popular sugary drinks, but it is receiving sweet and sour reviews, reports CBS News correspondent Vinita Nair.

    Advocates of the legislation - backed by Philadelphia Mayor Jim Kenney - say that along with limiting sugar intake, taxing these beverages will help the city cut down on poverty and grow its pre-kindergarten school program.

    Kenney wants to add three cents per ounce to the price of soda, flavored water, sports drinks and some juices. He said that would bring in an extra $400 million in the next five years, the majority of which would go to the city's universal pre-K program.

    "You can choose to drink something else, we're not taxing thirst," Kenney said. "We baked in a 55-percent drop-off in consumption in our modeling, which is ridiculously high. Even if it dropped off 55 percent, we're still raising $95 million a year."

    The bill is gaining support from former New York City Mayor Michael Bloomberg, who famously proposed -- but lost -- an over-sized soda ban to curb obesity. But critics say increased prices on common grocery items like soda and juice will end up hurting the exact people the tax is intended to help. Opponents of the sugar tax rallied last week.

    "I'm glad to see that the people are finally standing up," said one protester.

    The group, "Philadelphians Against the Grocery Tax Coalition" say the proposal "will hurt working families and small businesses, but it will not improve public health."

    And the American Beverage Association has spent an estimated $3 million on anti-bill ads. They argue that the tax will hit families hard. With the three-cent increase, a 12-pack of soda would cost an extra $4.32, and an additional $2.04 for a two-liter bottle of soda.

    Shel Klein, co-owner of Klein's Supermarket, said the tax will hurt the city's economy.

    "It's going to drive people away from the Philadelphia area," Klein said.

    Illinois is debating implementing a similar law to help take a bite out of the state's $5 billion deficit.

    And in November of 2014, Berkeley, California became the first U.S. city to pass a sugar tax of one cent per ounce.

    "There are a lot of questions that needs to be answered," said Philadelphia City Council President Darrell Clarke.

    Clarke didn't say what side he's on but expects the legislation to affect the city's poor communities.

    "You see where the stores are that sell the products and it's primarily in lower, moderate income communities," he said.

    There are other competing bills, including a container tax that chargers per container, rather than ounce.

    This isn't the first time the city has tried to pass a sugar tax. Mayor Kenney's predecessor also brought one to the table.

  • No Philly Grocery Tax - May 19, 2016

    Grassroots coalition delivers thousands of letters to City Council from business owners and individuals opposing the grocery tax

    Media Contacts:
    Anthony Campisi – (215) 735-6760, Anthony@ceislermedia.com
    Larry Miller – (215) 735-6760, LMiller@ceislermedia.com

    The Philadelphians Against The Grocery Tax coalition delivered more than 25,000 letters and petitions today to City Council members from individuals and local business owners across Philadelphia expressing their opposition to the regressive grocery tax proposal. If passed, the tax would dramatically increase the prices of more than one thousand products.

    “This new tax would hit restaurants like mine very hard,” said Anne McNally, owner of McNally’s Tavern in Chestnut Hill. “We already have to pay the 10 percent liquor by the drink tax and the 8 percent sales tax. This would only add insult to injury. Our business operates on small margins and relies on beverage sales.”

    At 3-cents per ounce, the tax would cause the prices of many beverages to double. The tax on a common 2-liter priced at $1.79 would be $2.04, more than the cost of the product. The cost of a 20-can family pack would go from $5.99 to $13.19 with the additional tax of $7.20.

    More than 1,300 businesses and more than 25,000 individuals have joined the Philadelphians Against the Grocery Tax coalition in opposition to the discriminatory grocery tax proposal. In addition to the letters delivered today, coalition members have reached out to Council Members tens of thousands of times – through phone calls, e-mails and visits – to register their concerns about a tax that would hurt Philadelphia families and small businesses.



    Philadelphians Against the Grocery Tax is a broad coalition of more than 25,000 concerned citizens and hundreds of businesses owners, movie theaters, and community organizations actively opposing the city’s proposed new grocery taxes. To learn more about the Philadelphians Against the Grocery Tax coalition, visit www.NoPhillyGroceryTax.com.

    Following are photos of Coalition members distributing letters and petitions to City Council.






  • Northeast Times - May 18, 2016

    Sugar tax a bad idea

    Letter to the Editor

    Do not create a new sugar tax in Philadelphia.

    Creating a new sugar tax will affect the economy throughout Philadelphia.

    This new sugar tax will affect businesses in Philadelphia in many ways, and consumers will leave Philadelphia and buy their products outside Philadelphia at a lower price. This will truly affect Philadelphia city government in many ways.

    Walter Pieczynski
    Oxford Circle

  • What they're saying: Declining Revenues aren't the way to fund Pre-K

    BillyPenn: Tough questions bubble up during City Council’s soda tax session
    By: Mark Dent, 05/11/16

    “Consumption [is] primarily in low-income neighborhoods,” Clarke said. “I don’t know why it’s that difficult to say.”- Council President Darrell Clarke questioning Finance Director Rob Dubow regarding which communities will be hardest hit by the Mayor’s tax proposal.

    “There is this elitist view that the people we’re highlighting on this map have options.”- Councilwoman Maria Quinones Sanchez referring to a map of low income communities.

    NBC10: Soda Tax Battle Bubbles Up in Front of Philadelphia City Council
    5/11/16

    “Everybody wants pre-k, but how we get there in terms of funding is something else. We don’t have the information.”- Councilwoman Jannie Blackwell

    “I’d like to see these very important programs funded in a more responsible way and in a more predictable way.”- Councilwoman Maria Quinones-Sanchez

    Newsworks: Soda tax again draws heat from Philly City Council
    By Tom MacDonald 5/3/16

    “If there are declining revenues, then we will ultimately get to the point where we will have to raise another tax to maintain particularly the level of service that you are proposing which is quite significant.” - Council President Darrell Clarke

    “We don't live on an island. People will actually go to Delaware County, to Montgomery County, to Bucks County, to Gloucester County to Kent County in Delaware to avoid this.”- Councilman Al Taubenberger

    Philadelphia Inquirer: Reassessment an underassessment for many, city says
    By Claudia Vargas, 5/6/16

    Councilman Alan Domb, a real estate mogul known as the "Condo King," said market values have gone up 3 percent or 4 percent each year since AVI. "We could be collecting $40 million more each year" if assessments matched the current market, he said. Domb said land values, especially in commercial high rises, are undervalued. He would like to see the city ramp up its efforts to accurately assess all properties. "You wouldn't be talking about any soda tax if we had this," Domb said.

    Newsworks: Fate of Philly sugary drinks tax still uncertain
    By Tom Macdonald, 5/10/16

    Council President Darrell Clarke said last week that a three cents-per ounce tax was an issue. This week Clarke was noncommittal, saying he wasn't sure there are votes to pass any tax, even if smaller than three cents.

    Clarke says he's still concerned how the tax would hit poorer neighborhoods. "We have maps that reflect where those locales are when the sugary drinks are being sold it's clearly in the lower income neighborhoods," he said.

    WURD Radio: The Nick Taliaferro Show Mustafa Rasheed
    Philadelphians for a Fair Future 5/5/16

    “Having conversations about the implementation at this point is far more premature than we need to be.” Mustafa Rasheed, a representative from Philadelphians for a Fair Future responding to a question about how the Mayor’s pre-k plan will actually be implemented if the tax is passed.

    Philadelphia Daily News: Soda-tax supporters aren't seeing the full picture
    By Dom Giordano, 05/12/16

    “…The real answer to the question is that the soda people don't want schools to be underfunded. They are revolting against being targeted and often maligned. They are engaged in free enterprise, and that system is under attack from people too afraid to find money for pre-K in the bloated budgets of the City of Philadelphia and the Philadelphia Public Schools.”

    Philadelphia Daily News: Are we Seeing the Death of Soda?
    By: Stu Bykofsky, 5/13/16

    There is more consumption "in lower-income areas and lower consumption in more affluent areas," says Stanford, which means the tax falls more heavily on the poor, something city Finance Director Rob Dubow reluctantly conceded.

    Singling out soda is discriminatory (open to possible legal challenge, says City Solicitor Sozi Tulante), unfair, and - taking into account already falling soda sales - doomed to failure.

    Sales of CSDs [carbonated sugary drinks] last year fell for the 11th straight year, hitting a 30-year low, Beverage Digest reported in March. In the last 20 years, soda sales plummeted by more than 25 percent.

    That is another reason the proposed massive tax on sugary beverages is unlikely to do what Kenney expects - help fund quality, universal pre-K, plus upgrades for some parks and rec centers, totaling $80 million per year.

    Daily Caller: Philadelphia’s Proposed Soda Tax is Government Manipulation
    By: Josh Smith and William Shughart, ,05/12/16

    Philadelphia’s soda tax is the same manipulative move that has been proposed and defeated in so many other states.

    Manipulative taxes like the soda tax are equally morally bankrupt because the people of Philadelphia are treated as pawns for bureaucrats to play with until they make the right choices. The right choices, of course, are those that the bureaucrats want them to make, not the ones individuals would freely choose themselves.

    If passed, Philadelphia’s soda tax will create another revenue stream for the city’s coffers, but why single out drinkers of sugary soft drinks? If the pre-K program truly generates widespread benefits, it should be financed by broad-based taxes. Of course, increasing property taxes, sales taxes, or income taxes would trigger a far more powerful backlash.

    Philadelphia Inquirer: City should help cops earn college credits on the job
    By: Harold Jackson, 05/13/16

    It would be better to fund preschool with property tax revenue, which if Philadelphia shows how much it cares about its children will only increase as more people want to live here. City officials say a 7.75 percent increase would annually raise about the same $95 million portion of the soda tax for pre-Ks and add only about $140 a year to the tax bill of the owners of a $130,000 house.

    Of course, it’s harder to sell a property tax increase to the public than a soda tax hike. But wasn’t Kenney elected because he said he’s ready to do the hard work it takes to make Philadelphia a better city?

    Philadelphia Tribune: Beverage tax will trickle down to hit the poor
    By: Harold Hairston, Former Philadelphia Fire Commissioner

    “Whatever label is put on it, it will further strain the ability of our most vulnerable citizens to simply put food on the table.

    There is no doubt that this is a regressive tax and it’s going to fall hardest on low-income families. These are concerns that have been raised in City Council during recent budget hearings.

    The second is once distributors and retailers cross county lines to restock – and they will — how would this tax be enforced? Are we potentially looking at a new city department just for this, or expanding an existing department? Either way, more money will be siphoned off from the city budget to cover those beverage tax enforcement agents.

    In the past, the government has stopped short of imposing hurdles to one’s ability to pick up traditional items at the grocery store. After all, Philadelphians are already paying one of the highest sales tax rates in the commonwealth.

    Philadelphia Daily News: Want political chips with your soda tax
    By Stu Bykofsky, 5/6/16

    “The two major funders of the pro-tax side are Texas millionaires Laura and John Arnold, and Bloomberg, the Big Bucks Buttinski. They want Philadelphia - America's poorest big city - to levy the biggest soda tax in this galaxy, which is not far, far away.”

    Philadelphia Daily News: Here’s where to get pre-K money
    By Stu Bykofsky, 5/9/2016

    “To portray soda bottlers and distributors as anti-children, as Kenney has done, for not volunteering for economic castration is disgusting.

    Instead of beating them up, why doesn’t he think hard about where he can find the $80 million a year for his programs?

    $80 million is 2 percent of the $4 billion city budget.

    Is Kenney not creative enough to find that money in the existing budget? That’s what parents with little savings have to do if they want to send their child to a special school.”

    Philadelphia Inquirer: Why the soda tax won’t raise the money pre-K requires
    By Joel L. Naroff, 5/1/16

    “I support Kenney's universal pre-K initiative…But once pre-K is started, it would be an educational disaster if it were not funded fully and correctly.

    And in a city that is perpetually fiscally stressed, choosing a revenue source that fails to provide the needed funds is not an option.

    Universal pre-K education should be implemented. But for all the reasons described, a tax on sugar-sweetened beverages is not likely to come close to generating the necessary revenues required to fully fund the program.”

    Philadelphia Daily News: Funding pre-K doesn’t solve problem of underfunded schools
    By George Bezanis, 5/4/16

    “I have concerns about the revenue source the mayor is relying on to fund these proposals. Instead of turning to tried and tested methods for securing funding, the mayor has embarked upon a risky strategy to tax sugar-sweetened beverages that could result in a protracted legal challenge. Even the mayor has acknowledged such a challenge is a "very real possibility," and Finance Director Rob Dubow has testified before City Council that this could delay implementation of the tax. If policy objectives such as universal pre-K are a priority - and I believe they should be - then the mayor should find a dependable source of revenue that can't be tied up for years in the courts or easily evaded.”

    Philadelphia Daily News: What we tax is as important as how much we tax
    By Josh Vincent, 5/4/16

    “There's no getting around the reality that a very few, very different sectors of Philadelphia's community will be affected: beverage companies, smaller retail outlets and people of modest means.”

    “Right now, a charge on the taxable land values in Philadelphia could bring in the same amount of revenue as proposed, with a much more progressive outcome based upon ability to pay. Results? The soda tax in the lowest income ZIP code 19133 would be transformed into a modest $12 a year extra charge on the land portion of the property tax. Chestnut Hill would go to about $450 a year. Good tax policy not only means getting the revenue for the programs we want, but making sure that all share in their contributions to the community: residential and nonresidential, in the neighborhoods and in Center City.”

    Philadelphia Inquirer: Gauge real impact of soda tax
    By Charles Slater, 5/4/16

    “The Harvard University study projecting major health benefits from Mayor Kenney's proposed tax on sugary drinks is a computer simulation based on assumptions about how people's behavior might change ("Study: From drinks tax, a healthier city," Thursday). There seemed to be no consideration of the likely results of demonizing a common and popular product.”

  • Philadelphia Tribune - May 17, 2016

    Unfair sugary drink tax would feed bad habits

    Lots of questions are swirling around the sugary drink tax debate. One is, what’s next? What bad habit should be chosen to fund our city services next time?

    Without argument, pre-kindergarten is a worthy investment, and Philadelphia’s recreation centers and libraries are badly in need of repairs. But it appears the Kenny administration is completely convinced that the only source of revenue available to fund them is a hefty, 3-cents-per-ounce tax on sugary sweetened beverages.

    Hence, our question, what’s next?

    Taxes on red meat? Fried foods? Baked goods with high salt content? Jell-O with artificial, red-dye coloring? Why stop at sugar-sweetened beverages?

    The answer, actually, is such taxation amounts to a slippery slope of where city revenue collection starts and where our freedom of food and beverage choices begin.

    We think the city should provide 3- and 4 year-olds with quality early learning experiences to better prepare them for elementary school. We also agree that well-maintained libraries and recreation centers are services that are important to the quality of living in our city.

    But should we ask a solitary industry – the beverage industry – to bear the brunt of paying for it?

    This is unfair and counter to the whole idea of capitalism.

    Other industries aren’t taxed so harshly – except, of course, for the cigarette industry. That product, too, was taxed as the result of legislators’ creative but lacking public funding ideas. The idea behind taxing cigarettes was that the product is bad for the customer’s health anyway. Taxes would decrease demand for the unhealthy product, while increasing money badly needed for Philadelphia schools.

    Well, this paying-extra-for-your-bad-habits public funding option needs to stop. Policymakers are now just getting greedy or lazy.

    Have they examined a 1 percent tax on our city’s rich nonprofits like the University of Pennsylvania? Have they looked into halting property tax rebates on luxury Center City properties?

    Thus far, they’ve instituted policies that depend on smoking for schools and drinking soda for pre-K. Next, they’ll urge us toward potato chips for pot holes and strombolis for street repairs. This is no way to raise revenue for the services we want and need.

    In addition, once the tax is applied, what’s to keep legislators from raising it higher later? Philadelphians are not currently taxed for food products. Will this kind of tax be the start of it?

    In essence, we will all be beneficiaries of having a quality, pre-K system in our city. So the public revenue to pay for it should not just be collected from people with bad habits. Enough is enough.

  • 6ABC - May 16, 2016

    Council President Darrell Clarke on 6ABC's Inside Story on the Sugary Beverage Tax

    Philadelphia City Council President Darrell Clarke (5th District) answers questions about the proposed Sugary Beverage Tax and other issues relating to the FY2017 Budget on 6ABC's Inside Story, aired May 15, 2016.

  • PA Capitol Digest - May 16, 2016

    Op-Ed: Philadelphia Soda Tax Lacks Both Fizz And Merit

    By Sen. John Sabatina (D-Philadelphia)

    One doesn't need a degree from the Wharton School to recognize the controversial soda tax proposal now being debated in Philadelphia City Council contains more carbonation and hot air than sound public reasoning.

    Though no one can fault Mayor Kenney for attempting to come up with additional funds for cash-strapped educational programs in the city, his proposal to establish a tax on sugary drinks- both soda and juice – would be counter-productive on a number of levels.

    Many low and moderate-income families would be severely impacted by a whopping three-cents an ounce tax on their favorite sodas and sports drinks, not to mention their children's favorite apple, cranberry or grape juice beverages.

    Those without private vehicles or the fare for public transit will be victimized. Low-income folks and seniors on fixed incomes will be stranded in the city and forced to pay higher prices. Though destined with good intentions in mind, resentment will be one of the outgrowths of the new tax.

    With a quarter of the city's population below the poverty line, economically hard-pressed citizens don't need public officials making well over $100,000 a year telling them what they should drink and how they should spend their money.

    And while Philadelphians are all in a lather debating the pros and cons of the soda tax proposal, surrounding communities – from New Jersey to Montgomery, Delaware, Chester and Bucks counties – are looking with anticipation at the economic boon they'll inherit.

    Thousands of Philadelphians will now be loading up on their favorite beverages across county lines and in the Garden State, rather than pay the extra freight for a similar purchase closer to home.

    Not to mention the distinct possibility that this could well be the tipping point that companies like Coca-Cola and Pepsi see as another reason to escape the tax trappings of doing business in Philadelphia and move their plants and jobs to a more business friendly area.

    Already viewed by many as a high tax city, Philadelphia need not double-down on its already well-established, anti-business reputation by instituting a beverage tax that would go well beyond anything else like it in the nation.

    Granted, the City of Brotherly Love wouldn't be the first to institute such a tax – Berkeley, California has declared war on soft drinks as well – but Berkeley's soda tax is a fraction of what Mayor Kenney is proposing, and Berkeley's median household income is nearly double that of Philadelphia.

    Balancing municipal budgets for rust belt cities like Philadelphia – especially after the economic downturn of the last half-dozen years – is no walk in the park, but residents expect more from their elected leaders than a new tax every time an agency's budget discloses a deficit.

    Public safety is a key component of urban life, but will a sin tax on soft pretzels (remember, there is salt on those pretzels) be the best the administration can come up with if a monetary shortfall should arise in the Police Department's 2017 budget?

    In conclusion, Mayor Kenney ran an extraordinarily astute campaign for mayor last year. A soda tax was not one of his campaign promises. In fact, as Councilman he was on record as opposed to the concept.

    Some citizens may admire his philosophical flexibility, but others may have been hoping for more creativity and less taxation when addressing one of the cities many problems.

  • Pittsburgh Tribune-Review - May 14, 2016

    Another soda tax: Philadelphia ignorance

    Philadelphia Mayor Jim Kenney cannot be any more of an economics ignoramus. He suggests that a proposed city tax on sugary drinks will hit beverage makers, not consumers.

    “Let me make this very clear. My proposed sugary beverage tax is a corporate tax — plain and simple,” Mr. Kenney wrote for The Huffington Post. Why, it would be “immoral and completely hypocritical” for big business to pass the tax along to customers, he said.

    More's the pity that Philly's leftist mayor isn't grounded in reality: A study by University of California researchers found that up to 70 percent of the soda tax in Berkeley, Calif., is passed along to consumers.

    Kenney's tax proposal is projected to add $2.16 to the cost of a six-pack of pop. That's incentive enough for mobile Philly shoppers to buy their soft drinks in nearby New Jersey. So, who'll get tapped the deepest? Most likely low-income residents.

    Among beneficiaries of the estimated $400 million in new revenue will be the city's pre-school cheerleaders. Never mind that the benefits of universal pre-school are, at best, mixed, according to a study by the American Enterprise Institute. (Kids in pre-K programs show no significant gains by third grade compared with their non-preschool peers).

    But whether it's a tax on soda — or just about anything else — a liberal and his “logic” tend to fizzle like flat soda.

  • No Philly Grocery Tax - May 13, 2016

    New TV Ad Warns Tax Proposal Puts Pre-K Initiative in Jeopardy

    The Philadelphians Against the Grocery Tax Coalition released its latest ad Friday warning that pre-K must be funded in a secure and sustainable way to support Philadelphia’s children over the long haul. A regressive grocery tax that is a diminishing source of revenue will not generate the money required to sustain this important program.

    The proposal to place a 3-cent per ounce levy on more than a thousand types of beverages will force the price of traditional grocery items like juice, tea and sports drinks to skyrocket. The city’s own projections predict the tax will cause a 55 percent drop in beverage sales, leaving this important program with large funding shortfalls and the revenue will continue to decline in subsequent years. This is not fair to Philadelphia’s children or the people of Philadelphia who will pay higher taxes and get nothing in return but another empty promise.

    “This tax puts the pre-K program in jeopardy before it starts,” the ad warns. “That means important promises to our kids we can’t keep. We want better education for our kids, but this isn’t the right way to do it.”

    City leaders are seeking to expand pre-K and revive our civic spaces and recreation centers. These are worthwhile initiatives that deserve to be funded by a sustainable revenue source instead of one that is rapidly declining. Research shows that soft drink consumption across the country has reached its lowest point in 30 years. This decline, coupled with the administration’s own projections that this tax would cause a steep drop in consumption, underscores that this revenue source will not be able to support the current proposals, leaving Philadelphia families once again disappointed.

    “Quality pre-K programs provide students with an important educational, social, and economic foundation to succeed in school,” said Kurt Landgraf, an education expert and former president and CEO of Educational Testing Service who is the recipient of the Distinguished Alumni Award from Penn State University. “A program this important should not be done through the risky move of taxing any individual product line or any single business sector. The current proposal represents an unsustainable revenue source that will be unable to support this critical program for the long term.”

    More than 1,200 small businesses and more than 14,000 regular Philadelphians have joined the Philadelphians Against the Grocery Tax Coalition because they recognize that the proposed tax is regressive and will fail to support the programs it is intended to fund.

    The fact is we can and should invest in our children without harming families and small business owners in the process. If city officials sincerely believe that pre-K is a priority they should properly fund it reliably and sustainably within the budget.

    You can view the latest ad here.

  • Philly.com - May 13, 2016

    Byko: Are we seeing the death of soda?

    SOMEWHERE, John Franklin Street is smiling.

    The 97th mayor is remembered for many things, among them constantly hectoring people to drink water.

    It seems we got the message - to the dismay of what Mayor Kenney loves calling "Big Soda" and what others refer to as CSDs, or carbonated sugary drinks.

    Sales of CSDs last year fell for the 11th straight year, hitting a 30-year low, Beverage Digest reported in March. In the last 20 years, soda sales plummeted by more than 25 percent.

    That is another reason the proposed massive tax on sugary beverages is unlikely to do what Kenney expects - help fund quality, universal pre-K, plus upgrades for some parks and rec centers, totaling $80 million per year.

    Not only is regular soda on the rocks, last year's decline was led by sugar-free drinks, with Diet Coke and Diet Pepsi each losing more than 5 percent in sales.

    That fact may puncture Councilman Allan Domb's idea to replace Kenney's outlandish 3-cent-an-ounce tax on sugary drinks with a smaller tax on both sugary and diet beverages.

    Consumers are running away from soda even without a tax increase that could double the price of some CSDs. Health-conscious people are turning to water, with "sparkling water growing fast," I'm told by Duane Stanford, editor of the authoritative Beverage Digest.

    Stanford and I chatted Wednesday while City Council held hearings on the proposed tax.

    Council President Darrell Clarke seems cool as penguins' feet to a big tax that will fall hard on his low-income constituents.

    Councilwoman Blondell Reynolds Brown is looking at a tax on containers, such as bottles, while Councilwoman Maria Quiñones-Sánchez wonders, as have I, why pre-K money can't be found in the city's $4 billion budget. Domb says courthouse fees, which have not changed in 30 years, could be increased.

    All are ideas worth exploring.

    From politics, let's move to soda economics and demographics.

    Bottled water sales are expected to surpass those of soda within a few years, according to the Beverage Marketing Corp. If we are looking at the death of soda, that makes it a rotten revenue source.

    In 2014, Gallup reported that nearly two-thirds of Americans avoid soda. That number is growing. They may know a 20-ounce bottle contains 15 teaspoons of sugar. Ugh.

    The average American consumes 648 eight-ounce servings a year - almost two a day, says Stanford. (Pennsylvanians drink 521 servings.) There is more consumption "in lower-income areas and lower consumption in more affluent areas," says Stanford, which means the tax falls more heavily on the poor, something city Finance Director Rob Dubow reluctantly conceded.

    While that may be true, some argue, the poor will be the biggest beneficiaries. The gaping hole in that argument is that they benefit only if they have pre-K-age children or younger.

    Males are more likely to drink CSDs than women; children and young adults drink more than older people; nonwhites consume more than whites; and more is consumed in the South than any other region, according to Gallup. The soda tax has been tried 31 times before, successful only in the People's Republic of Berkeley, Calif., a city of only 118,000.

    When a soda tax is proposed, the beverage industry fights ferociously, partly because it's in rough waters now, partly over fears soda will be turned into the New Tobacco - an "evil" industry that must be exiled and taxed out of existence.

    Do I oppose pre-K? No, I await a fair and effective way to pay for it. (I have made suggestions on my Stu-niversity blog.)

    Singling out soda is discriminatory (open to possible legal challenge, says City Solicitor Sozi Tulante), unfair, and - taking into account already falling soda sales - doomed to failure.

    Can City Council devise a fair and effective plan?

  • Philly.com - May 13, 2016

    Jackson: City should help cops earn college credits on the job

    It’s still early in his administration, but some of Mayor Kenney’s tendencies suggest an inclination to take the politically expedient path in addressing issues that are begging for more innovative solutions. The latest example of that is his signing off on Police Commissioner Richard Ross’ request to ditch college credit requirements for police recruits.

    It was disturbing enough that Ross would suggest ending a good policy that his predecessor, former Commissioner Charles Ramsey, originated to make the Police Department more professional. After all, Ross, who grew up as a cop on the city force, assured Philadelphians that he wouldn’t undermine reforms made by Ramsey, an outsider who who was a deputy police chief in Chicago and the chief in Washington before coming here.

    The department that Ramsey took over in 2008 needed a kick in the butt that could only come from someone who had not developed relationships over the years that might make him hesitate to take action. Ramsey had no tolerance for bad cops accused of corruption and he invited the Department of Justice to investigate why Philadelphia officers were shooting so many people.

    The DOJ’s report in 2013 included 91 recommendations on the use of force by police, almost all of which Ramsey implemented. But he understood that an underlying problem was the caliber of officer being put on city streets. He instituted the requirement that recruits have at least 60 hours of college credit to put officers on the force who can act both decisively and intelligently in critical situations.

    Book learning is no replacement for experience, but studies have shown that officers who went to college demonstrate better overall job performance, show greater levels of creativity, have better problem-solving skills, fewer disciplinary actions and citizen complaints, use less sick time, and are less likely to use force as their first option.

    Ross has a very good reason for wanting to scuttle the college requirement. He’s about 400 officers short of the 6,525 budgeted for the force, and believes the requirement prevents too many otherwise qualified applicants with only a high school diploma or a GED from becoming cops. Nearly half of Philadelphia students don’t even finish high school.

    But dropping the college requirement was the easy solution. A better one would have been to allow qualified recruits with only a high school diploma to accumulate the needed credits over time after they finish the Police Academy. It would be worth it for the city to supplement their college costs to get better educated officers who grew up in the very neighborhoods they would patrol.

    Kenney said police recruits can’t afford “to go into debt for $100,000” to go to college. But it would cost only about $10,000 to get 60 credits at the Community College of Philadelphia. Ramsey wanted to form a partnership with CCP, which has a criminal justice program. Think how proud officers would be to earn an associate degree from CCP, which is possible with 60 credits.

    But in Philadelphia’s frequently convoluted way of governing, the college requirement appears to be dead. The Civil Service Commission approved the change on April 20, and it was ratified last week by the Administrative Board, which includes Kenney, Finance Director Rob Dubow, and Managing Director Michael DiBerardinis. Without an appeal within 30 days, the requirement will disappear.

    The thinking leading to that result seems similar to the mayor’s thought process in pushing a tax on sugary drinks to pay for more highly qualified pre-kindergarten programs throughout the city. That is a noble and needed goal for a city with too many children dropping out of school. But taxing a product whose consumption is expected to decline with the imposition of the tax doesn’t make sense if you want to fund good pre-Ks well into the future.

    It would be better to fund preschool with property tax revenue, which if Philadelphia shows how much it cares about its children will only increase as more people want to live here. City officials say a 7.75 percent increase would annually raise about the same $95 million portion of the soda tax for pre-Ks and add only about $140 a year to the tax bill of the owners of a $130,000 house.

    Of course, it’s harder to sell a property tax increase to the public than a soda tax hike. But wasn’t Kenney elected because he said he’s ready to do the hard work it takes to make Philadelphia a better city?

  • The Philadelphia Tribune - May 13, 2016

    Beverage tax will trickle down to hit the poor

    Mayor Jim Kenney has proposed a 3-cents-per-ounce tax on sugar-sweetened juices and drinks as a revenue source to fund pre-kindergarten. Is this a beverage tax or a corporate tax? Whatever label is put on it, it will further strain the ability of our most vulnerable citizens to simply put food on the table.

    There is no doubt that this is a regressive tax and it’s going to fall hardest on low-income families. These are concerns that have been raised in City Council during recent budget hearings. Concerned Philadelphians on all sides of this issue have eloquently made their cases for and against the proposal in the ongoing budget hearings and community meetings. Certainly no one is against pre-K, or renovating the parks, libraries and recreation centers, but the beverage industry is a major contributor to the local economy and shouldn’t have to foot the entire bill.

    Between the bottlers and distributors, 1,233 employees support their families. Do we want to put these jobs at risk?

    Will the children of these unemployed workers benefit from pre-Kindergarten?

    The overall problem is that we need a reliable and sustainable revenue source that doesn’t punish families and business owners in order to accomplish these goals. In the past five years, Philadelphia’s families have seen their [natural] gas rates go up, four property tax increases and will most likely see an increase in their water rates this year. This proposed tax just adds to the list of expenses for already struggling families.

    Two other aspects to this debate have gotten lost in recent days.

    One is the reiteration that this is a tax on distributors — not retailers or consumers. The mayor’s administration is assuming these businesses will either absorb the tax — a big assumption — or spread it out over many different items. But, as it’s been pointed out in numerous City Council hearings, this is a false sense of reality to think that distributors would just absorb this tax, which, in some cases, doubles the cost of their product. I guess they could, but would soon be out of business in Philadelphia.

    It will, without question, be passed on to retailers and their customers.

    The second is once distributors and retailers cross county lines to restock – and they will — how would this tax be enforced? Are we potentially looking at a new city department just for this, or expanding an existing department? Either way, more money will be siphoned off from the city budget to cover those beverage tax enforcement agents.

    In the past, the government has stopped short of imposing hurdles to one’s ability to pick up traditional items at the grocery store. After all, Philadelphians are already paying one of the highest sales tax rates in the commonwealth. Now we’re being told to use the revenue to better educate children.

    I ask Philadelphians who are for the grocery tax to consider this: What will government tax next when revenue is needed for a new initiative? What new program requiring sustainable revenue will be put on the table and which product or service will have a higher tax on it?

    Because believe it, there will be a next time. Which industry will be next? Maybe they’ll charge Philadelphians a separate tax to have their trash collected.

  • The Daily Caller- May 12, 2016

    Philadelphia’s Proposed Soda Tax Is Government Manipulation

    Philadelphia’s City Council held a hearing on the 11th of this month about the embattled soda tax, sometimes also called the grocery tax by its opponents. If passed, the legislation in question would place a three-cent tax on each ounce of non-diet soda, including most sugar-sweetened beverages, such as teas and sports drinks.

    Such taxes usually are proposed for their purported public health benefits, but Philadelphia’s measure has a twist that aims to use the revenue to fund pre-K education for the city’s children. But this is just a rhetorical trick. Philadelphia’s soda tax is the same manipulative move that has been proposed and defeated in so many other states. Philadelphia’s City Council should look to the good examples set by Hawaii, Illinois, San Francisco, as well as other governments, and keep its nose out of the dietary choices of its people.

    Philadelphia’s mayor, Jim Kenney, recently defended the soda tax against claims by U.S. presidential candidate Senator Bernie Sanders that it, like all taxes on consumption items, would disproportionately affect low-income people. Mayor Kenney stated, “It is immoral and completely hypocritical for these vested corporate interests to pass this tax on to the very people they have profited from for decades.”

    But what makes Mayor Kenney think that he holds the moral high ground? Manipulative taxes like the soda tax are equally morally bankrupt because the people of Philadelphia are treated as pawns for bureaucrats to play with until they make the right choices. The right choices, of course, are those that the bureaucrats want them to make, not the ones individuals would freely choose themselves.

    If the tax was not meant to push people towards what are supposedly healthier choices, why would the City Council exempt diet soda from the tax? Diet drinks are at least as unhealthy as sugar-sweentened ones: they, too, are implicated by medical evidence as contributors to obesity and Type II diabetes. This, more than any other aspect of the proposal, tips its hand as manipulation in a new guise.

    Philosopher Isaiah Berlin describes regulations like Philadephia’s as attempts to reveal the manipulated person’s “real self.” “If only she really knew what she wanted,” the argument goes, “She would choose what I am choosing for her.” Such ideas represent monstrous impersonations of the individual’s own desires; they fundamentally undermine personal autonomy and therefore human dignity.

    The manipulative intent of the soda tax is exacerbated by the dishonest way the bill has been defended. Instead of being forthright that the bill is at least in part meant to encourage people to make supposedly healthier choices, the measure is justified with smokescreen references to funding education. For example, when asked about possible public health benefits in an interview, Mayor Kenney didn’t straightforwardly point to arguments made by other advocates of soda taxes, but pivoted back to the pre-K education the tax is supposed to fund. Defenses of the soda tax that rest on the pre-K funding are little more than political sleights of hand meant to undermine opposition.

    More to the point, Mayor Kenney apparently is ignorant of the principles of public finance. No tax sticks where it lands. Every tax is shifted forward, backward, or both, along the taxed good’s supply chain. Such shifting explains why the one cent per ounce soda tax imposed by Berekely, California failed to raise nearly as much revenue as anticipated.

    If passed, Philadelphia’s soda tax will create another revenue stream for the city’s coffers, but why single out drinkers of sugary soft drinks? If the pre-K program truly generates widespread benefits, it should be financed by broad-based taxes. Of course, increasing property taxes, sales taxes, or income taxes would trigger a far more powerful backlash.

    Currently, the draft of the bill is five pages long. No one needs five pages of regulations telling them how much soda they should drink. Most basically, policymakers who assume they know best what others really desire are “nannies” at best and tyrants at worst. It is deceptive to hide behind young children’s pre-school education to provide the political motivations for an unfair tax on soda drinkers. Government interference with adult’s choices of what to eat and drink should be rejected in all of its forms, especially when it’s cloaked in a “for the children” disguise.

  • Philly.com - May 12, 2016

    Giordano: Soda-tax supporters aren't seeing the full picture

    MAYOR KENNEY'S proposed tax on sugary drinks has gotten Bernie Sanders, Michael Bloomberg and Warren Buffett to be involved in the debate. Sanders correctly saw the tax as regressive and a burden on poorer Philadelphians. He was chastised by all sorts of big, nanny-state liberals as not understanding that this tax was not just about funding universal prekindergarten. Stephen Stromberg, writing in the Washington Post, said of Sanders' view, "The point of soda taxes is to guide people away from over-consuming a product that no one needs to live and that should be treated as an indulgence."

    So even big-government Bernie doesn't get that nanny-state nutritionists and the Starbucks crowd want to make the decisions for those who can't think for themselves. In their self-righteous view, consumers are being bamboozled by Big Soda and it's up to them to tell the real truth: put down their Mountain Dew and recognize this tax is like parents telling their young children to eat their vegetables. This whole thing drips of snobbery.

    Cue the second "B" in the story - Bloomberg. He is a contributor to the pro-tax group called Philadelphians for a Fair Future. According to the Inquirer, he's joined by Houston billionaire couple John and Laura Arnold. So it's hard to talk about evil Big Soda when billionaires are lining up to advance their own personal causes.

    By the way, I love that the anti-tax people call this a grocery tax. That label bothers the other side, but it gets at the fact that this tax is on all sugary drinks. In fact, Sen. Pat Toomey said on my radio show, in response to Katie McGinty, his opponent in this fall's election for Senate and a supporter of the tax, "It's even the juice box in the kids' lunch box."

    This battle has even reached Buffett. The renowned investor and Cherry Coke drinker was confronted at his annual shareholders meeting last month over Berkshire Hathaway's investment of a 9 percent stake in Coca-Cola. The Financial Times reports that Buffett said "I make a choice to get 700 calories from Coke. I like fudge a lot, and peanut brittle, and I am a very happy guy." There it is. It's about choice and happiness and not about some bean counters using the power of government to dictate your beverage of choice.

    The fourth "b" in this battle are bodegas. I was told off the record by a well-known Philadelphian of Latino heritage that this tax will really hurt the small Latino mini-marts often located in difficult neighborhoods. These small stores serve neighborhood needs and employ people.

    In fact, at a recent rally at City Hall, Miguel Martinez, the head of the Dominican Merchants Association, underlined all of this as he made his remarks in Spanish. Will Kenney and the soda police now stoke attacks against Big Bodega? Will they say they are complicit in making people fat?

    I contrast the passion of people protecting their jobs and their choices with that of Mollie Michel, a Philadelphia public school parent and blogger at achildgrows.com. She attended testimony before City Council of both sides over the sugary drinks tax. She had her 6-year-old with her, and the child asked, "Mommy, why don't these people want money to go to our schools?" Michel explained, "It's complicated." She then went on to blog about the real answer. She wrote: "Because those with the most money often have the loudest voice. Big Soda can afford t-shirts and buttons and giant signs and probably paid most of these people to be here."

    I realize this is a parent wanting the best for her child. However, the real answer to the question is that the soda people don't want schools to be underfunded. They are revolting against being targeted and often maligned. They are engaged in free enterprise, and that system is under attack from people too afraid to find money for pre-K in the bloated budgets of the City of Philadelphia and the Philadelphia Public Schools.

    There is no Big Soda behind the curtain. There are only moms and dads who think a bottle of soda is the least of our problems. It's time to just let them alone.

  • Philadelphia Inquirer - May 12, 2016

    Jackson: City should help cops earn college credits on the job

    It’s still early in his administration, but some of Mayor Kenney’s tendencies suggest an inclination to take the politically expedient path in addressing issues that are begging for more innovative solutions. The latest example of that is his signing off on Police Commissioner Richard Ross’ request to ditch college credit requirements for police recruits.

    It was disturbing enough that Ross would suggest ending a good policy that his predecessor, former Commissioner Charles Ramsey, originated to make the Police Department more professional. After all, Ross, who grew up as a cop on the city force, assured Philadelphians that he wouldn’t undermine reforms made by Ramsey, an outsider who who was a deputy police chief in Chicago and the chief in Washington before coming here.

    The department that Ramsey took over in 2008 needed a kick in the butt that could only come from someone who had not developed relationships over the years that might make him hesitate to take action. Ramsey had no tolerance for bad cops accused of corruption and he invited the Department of Justice to investigate why Philadelphia officers were shooting so many people.

    The DOJ’s report in 2013 included 91 recommendations on the use of force by police, almost all of which Ramsey implemented. But he understood that an underlying problem was the caliber of officer being put on city streets. He instituted the requirement that recruits have at least 60 hours of college credit to put officers on the force who can act both decisively and intelligently in critical situations.

    Book learning is no replacement for experience, but studies have shown that officers who went to college demonstrate better overall job performance, show greater levels of creativity, have better problem-solving skills, fewer disciplinary actions and citizen complaints, use less sick time, and are less likely to use force as their first option.

    Ross has a very good reason for wanting to scuttle the college requirement. He’s about 400 officers short of the 6,525 budgeted for the force, and believes the requirement prevents too many otherwise qualified applicants with only a high school diploma or a GED from becoming cops. Nearly half of Philadelphia students don’t even finish high school.

    But dropping the college requirement was the easy solution. A better one would have been to allow qualified recruits with only a high school diploma to accumulate the needed credits over time after they finish the Police Academy. It would be worth it for the city to supplement their college costs to get better educated officers who grew up in the very neighborhoods they would patrol.

    Kenney said police recruits can’t afford “to go into debt for $100,000” to go to college. But it would cost only about $10,000 to get 60 credits at the Community College of Philadelphia. Ramsey wanted to form a partnership with CCP, which has a criminal justice program. Think how proud officers would be to earn an associate degree from CCP, which is possible with 60 credits.

    But in Philadelphia’s frequently convoluted way of governing, the college requirement appears to be dead. The Civil Service Commission approved the change on April 20, and it was ratified last week by the Administrative Board, which includes Kenney, Finance Director Rob Dubow, and Managing Director Michael DiBerardinis. Without an appeal within 30 days, the requirement will disappear.

    The thinking leading to that result seems similar to the mayor’s thought process in pushing a tax on sugary drinks to pay for more highly qualified pre-kindergarten programs throughout the city. That is a noble and needed goal for a city with too many children dropping out of school. But taxing a product whose consumption is expected to decline with the imposition of the tax doesn’t make sense if you want to fund good pre-Ks well into the future.

    It would be better to fund preschool with property tax revenue, which if Philadelphia shows how much it cares about its children will only increase as more people want to live here. City officials say a 7.75 percent increase would annually raise about the same $95 million portion of the soda tax for pre-Ks and add only about $140 a year to the tax bill of the owners of a $130,000 house.

    Of course, it’s harder to sell a property tax increase to the public than a soda tax hike. But wasn’t Kenney elected because he said he’s ready to do the hard work it takes to make Philadelphia a better city?

  • NBC Philadelphia - May 11, 2016

    Soda Tax Battle Bubbles Up in Front of Philadelphia City Council

    City Council held a hearing Wednesday on the controversial "soda tax."

    The Council heard testimony on Mayor Jim Kenney's proposed sugary-beverage tax, aka "soda tax," which would be used to help fund educational initiatives, rehab recreation centers and better-equip police and fire departments, according to Kenney.

    Earlier, Kenney told city council that the soda tax would provide $400 million to be split among several initiatives.

    The soda tax is part of Kenney's proposed $4.17-billion spending plan, which exceeds last year's budget by $100 million. It is now in the hands of the city council, which has opposed similar sugary drinks taxes twice before under Kenney's predecessor Michael Nutter.

  • Billy Penn - May 11, 2016

    Tough questions bubble up during City Council’s soda tax session

    Darrell Clarke didn’t hold back this time.

    After weeks of mostly silence on Mayor Jim Kenney’s proposed sugary drinks tax, the City Council President offered thoughts last week that the 3-cent-per-ounce proposal might be too steep. He went even further today. At a Council hearing where members heard the mayoral administration’s support for the tax and floated ideas of their own, Clarke pressed Director of Finance Rob Dubow about the locations of Philadelphians most likely to drink soda.

    “Consumption [is] primarily in low-income neighborhoods,” Clarke said. “I don’t know why it’s that difficult to say.”

    Dubow had started the meeting introducing why the tax was necessary for the administration’s goals of universal Pre-K, community schools and pension crisis alleviation. He estimated the soda tax could bring in $95 million annually and that there would be a 55 percent drop in consumption. He said the administration’s estimation models accounted for the entirety of the tax to be passed onto consumers, though he said experts believed it was highly unlikely.

    With a map showing how corner stores and low income neighborhoods displayed to his left, Clarke asked who Dubow expected would continue to drink soda. Dubow didn’t offer a full answer, and Clarke kept following up.

    Dubow: “This is a tax people don’t have to pay if they don’t buy it. There will be people who continue to drink it.”

    Clarke: “Where will the likely purchases be?”

    Dubow: “That will depend on choices people make.”

    Clarke: “Where geographically will they continue to drink?”

    Dubow added there would be a greater falloff in consumption in areas with the most consumption now. Clarke joked that Dubow would make a good politician.

    Dubow insisted later in the meeting to Councilwoman Maria Quiñones–Sánchez that his staff had looked through the entirety of the city’s $4.5 billion budget and found no way to replicate the $95 million in annual revenue his office estimates the tax will bring in. Quiñones–Sánchez, who spoke at anti-soda tax demonstration last week, said she attended a senior center last week and saw no beverages that would be exempt from the soda tax. Health commissioner Thomas Farley responded, “There was no water?”

    Quiñones–Sánchez later called the tax regressive and said, “There is this elitist view that the people we’re highlighting on this map have options.”

    Throughout the session, council members discussed other ways of bringing in revenue. Subjects broached included delinquent real estate and, particularly for Councilman Allan Domb, raising the rates of court fees to keep up with inflation. Domb also suggested they consider taxing diet sodas as a way of reaching what he thinks could be a more affluent population.

    “I think everybody loves the initiatives,” he said. “If we can broaden the base I think it’s going to make things a lot better.”

    Curtis Jones Jr. showed the most open support of any Council member regarding the tax. He told a story about how if you looked at a map of recent murders in Philadelphia you’d find them in about the same 11 zip codes where you’d also find high diabetes rates and not enough opportunities for children.

    “I’m down for saving those jobs and saving Pepsi and Coke,” he said, “but I’m sure down for saving those kids.”

  • Philadelphia Tribune - May 11, 2016

    Beverage tax will trickle down to hit the poor

    Mayor Jim Kenney has proposed a 3-cents-per-ounce tax on sugar-sweetened juices and drinks as a revenue source to fund pre-kindergarten. Is this a beverage tax or a corporate tax? Whatever label is put on it, it will further strain the ability of our most vulnerable citizens to simply put food on the table.

    There is no doubt that this is a regressive tax and it’s going to fall hardest on low-income families. These are concerns that have been raised in City Council during recent budget hearings.

    Concerned Philadelphians on all sides of this issue have eloquently made their cases for and against the proposal in the ongoing budget hearings and community meetings. Certainly no one is against pre-K, or renovating the parks, libraries and recreation centers, but the beverage industry is a major contributor to the local economy and shouldn’t have to foot the entire bill.

    Between the bottlers and distributors, 1,233 employees support their families. Do we want to put these jobs at risk?

    Will the children of these unemployed workers benefit from pre-Kindergarten?

    The overall problem is that we need a reliable and sustainable revenue source that doesn’t punish families and business owners in order to accomplish these goals. In the past five years, Philadelphia’s families have seen their [natural] gas rates go up, four property tax increases and will most likely see an increase in their water rates this year. This proposed tax just adds to the list of expenses for already struggling families.

    Two other aspects to this debate have gotten lost in recent days.

    One is the reiteration that this is a tax on distributors — not retailers or consumers. The mayor’s administration is assuming these businesses will either absorb the tax — a big assumption — or spread it out over many different items. But, as it’s been pointed out in numerous City Council hearings, this is a false sense of reality to think that distributors would just absorb this tax, which, in some cases, doubles the cost of their product. I guess they could, but would soon be out of business in Philadelphia.

    It will, without question, be passed on to retailers and their customers.

    The second is once distributors and retailers cross county lines to restock – and they will — how would this tax be enforced? Are we potentially looking at a new city department just for this, or expanding an existing department? Either way, more money will be siphoned off from the city budget to cover those beverage tax enforcement agents.

    In the past, the government has stopped short of imposing hurdles to one’s ability to pick up traditional items at the grocery store. After all, Philadelphians are already paying one of the highest sales tax rates in the commonwealth. Now we’re being told to use the revenue to better educate children.

    I ask Philadelphians who are for the grocery tax to consider this: What will government tax next when revenue is needed for a new initiative? What new program requiring sustainable revenue will be put on the table and which product or service will have a higher tax on it?

    Because believe it, there will be a next time. Which industry will be next? Maybe they’ll charge Philadelphians a separate tax to have their trash collected.

  • NBC Philadelphia - May 11, 2016

    Soda Tax Battle Bubbles Up in Front of Philadelphia City Council

    City Council held a hearing Wednesday on the controversial "soda tax."

    The Council heard testimony on Mayor Jim Kenney's proposed sugary-beverage tax, aka "soda tax," which would be used to help fund educational initiatives, rehab recreation centers and better-equip police and fire departments, according to Kenney.

    Earlier, Kenney told city council that the soda tax would provide $400 million to be split among several initiatives.

    The soda tax is part of Kenney's proposed $4.17-billion spending plan, which exceeds last year's budget by $100 million. It is now in the hands of the city council, which has opposed similar sugary drinks taxes twice before under Kenney's predecessor Michael Nutter.

  • Newsworks - May 10, 2016

    Fate of Philly sugary drinks tax still uncertain

    Philadelphia's proposed tax on soda and sugary beverages is still no closer to passage.

    Council President Darrell Clarke said last week that a three cents-per ounce tax was an issue. This week Clarke was noncommittal, saying he wasn't sure there are votes to pass any tax, even if smaller than three cents.

    "I have not polled members so I'm not clear where we are. I think all the information has to be put out on the table both in terms of the programmatic side and the terms of the impact on the particular tax and those are still issues that are being discussed," he said.

    Clarke says he's still concerned how the tax would hit poorer neighborhoods.

    "We have maps that reflect where those locales are when the sugary drinks are being sold it's clearly in the lower income neighborhoods," he said.

    Mayor Kenney's spokesperson Lauren Hitt says enacting a smaller tax would mean less money for everything from universal pre-K to green jobs.

    There are full-blown ad campaigns lobbying for and against the proposed tax. Former New York City Mayor Michael Bloomberg is helping bankroll the pro-tax side. The American Beverage Association is leading the opposition.

    For the tax to be part of the next Philadelphia budget, City Council would have to vote on it this month or next.

  • Philadelphia Daily News - May 9, 2016

    Byko: Here’s where to get pre-K money

    When I wrote about the ill-advised soda tax proposal on Friday, I didn’t cover two points, for reasons of space.

    The first is the health argument, which is a case Mayor Kenney did not make, perhaps because it failed, twice, when Mayor Nutter tried it. As a Councilman, Kenney (then) opposed the soda tax.

    The health argument goes like this: We (as a city and a nation) suffer from rising rates of diabetes and obesity, Sugary drinks, such as soda, contribute to that. That’s not open to dispute.

    Also not open to dispute is that salt contributes greatly to high blood pressure, which is a leading cause of cardiovascular disease, and also increases in stomach cancer.

    You see where I am going. Why single out a single ingredient in a single product, and vilify the manufacturers?

    If sugar is so damn bad, and in large doses it is, why not tax sugar itself – in the five-pound bag and every product that contains “too much” of it -- ice cream, canned fruit, pastry, bottled pasta sauce, candy, Frosted Flakes?

    Why single out soda? And why a staggering three cent an ounce tax that would actually exceed the cost of the product in some cases?

    Then came a report from Harvard University researchers – and as soon as I heard that, I could predict the result – that there would be major health benefits for Philadelphia if the tax were enacted.

    The study was funded by the anti-sugar Healthy Food America and JPB Foundation, which supports low-income people.

    The report was not peer-reviewed, which means it was not subjected to scientific scrutiny.

    Let’s accept – without peer review – pre-K is a good thing. Providing education is the responsibility of the city and the state, not Coke, Pepsi and Mountain Dew.

    To portray soda bottlers and distributors as anti-children, as Kenney has done, for not volunteering for economic castration is disgusting.

    Instead of beating them up, why doesn’t he think hard about where he can find the $80 million a year for his programs.

    $80 million is 2 percent of the $4 billion city budget.

    Is Kenney not creative enough to find that money in the existing budget? That’s what parents with little savings have to do if they want to send their child to a special school.

    Kenney needs help and here are a few suggestions:

    Whatever the Deferred Retirement Option Plan (DROP) costs the city, get rid of it, except for police and firefighters.

    Confiscate and sell tax delinquent homes.

    Reduce the tax abatement for Center City, which is booming and no longer needs it. It is welfare for the rich.

    I’m told there’s millions owed to the courts, among other deadbeats. The city even has a website for them.

    Collect every damn dime from them before asking us for more.

    If a tax must be raised, make it broad-based – the real estate tax. Yes, I know there have been four increases in five years because I pay them, but Philly’s rate is below surrounding counties. (I’d excuse some on fixed incomes from the increase.) Make the increase big enough to do the job for a decade, and also big enough to allow a reduction in the wage tax. That would be a boon for the poor, who usually don’t own homes and who often work in low-paying jobs.

    We should have learned, from taxing alcohol and cigarettes, “sin taxes” don’t do the job over the long haul.

  • Philadelphia Inquirer - May 9, 2016

    Letters: Soda tax, pro and con

    Countering columnist's critique of levy

    The Kenney administration would like to address several points in Joel Naroff's column about the proposed 3-cents-an-ounce sugary-beverage tax ("Pre-K quandary," May 1):

    The Department of Revenue looked at 13 studies of the effect of increased price on demand, or elasticity; the range was from -.8 to -1.21, so we decided on the average, -1 (a 1 percent price increase would result in a 1 percent drop in demand). Council members and reporters have been briefed on this methodology.

    Since this is a tax on distributors, not a sales tax on consumers, the price increase will depend on the amount companies pass on to consumers. It is incorrect to say that prices will increase by 55 percent.

    Our revenue projections accounted not only for consumers' income but for gender, age, and race/ethnicity.

    The policy does not assume that all retailers buy only from distributors in Philadelphia. Distributors, regardless of where they are based, will be taxed when they sell to city retailers.

    |Marisa G. Waxman, first deputy commissioner, Department of Revenue, Philadelphia

    There are better ways to fight obesity

    Mike Newall's column suggested that Philadelphia's solution to obesity is taxing soda at 3 cents an ounce ("Big Soda spends in bid to sway vote," May 1). The Food Marketing Institute reports that there are more than 42,000 products in supermarkets. Yet despite statistics showing declining consumption, sodas are singled out as though they contribute uniquely to obesity and diabetes.

    As a registered dietitian, I assert that many factors contribute to these public-health challenges, such as lack of exercise and sleep, medical and genetic conditions, and overconsumption of calories. All foods and beverages can fit within a balanced lifestyle when consumed in moderation and in appropriate portion sizes, and when combined with physical activity.

    If we want to address obesity, taxes aren't the solution. Science and real-world data have established that. And if we want to raise revenue for universal pre-K, let's look at fair funding mechanisms that will support children for the long haul rather than taxing one product category.

  • Philadelphia Inquirer - May 9, 2016

    Commentary: Sanders right, Kenney wrong on impact of soda tax

    In the run-up to Pennsylvania's primary elections, one presidential candidate condemned Philadelphia's proposed soda tax, saying, "A tax on soda and juice drinks would disproportionately increase taxes on low-income families in Philadelphia." You might expect this to come from the tax-averse Republican Sen. Ted Cruz or business-friendly Donald Trump - but you'd be wrong.

    It was Democratic candidate Sen. Bernie Sanders, a self-styled champion of the little guy who is unafraid to back tax increases. No matter whom you voted for, Sanders undeniably has it right, and Philadelphia's Mayor Kenney has it wrong.

    As a member of City Council, Jim Kenney twice voted against increasing taxes on sugar-sweetened drinks to fund more government spending. As mayor, he has reversed his position and proposed a tax hike that would add $2.16 to the cost of a six-pack of soda. His regressive plan is the wrong policy at the wrong time for Philadelphia.

    Kenney's scheme is flawed for numerous reasons. For starters, it's unfair to the city's poorest residents. Philadelphia's 26 percent poverty rate is the highest among the nation's largest cities. Likewise, the city's unemployment rate persistently tops the national average. Too many in the City of Brotherly Love struggle to make ends meet. Kenney's tax would nearly double the average cost of a 12-pack of soda - hitting hardest those who can least afford it, not to mention small retailers, bottlers, and restaurants.

    Pennsylvanians, and particularly Philadelphians, are already overtaxed. The commonwealth's state and local tax burden ranks 15th highest in the nation, according to the nonpartisan Tax Foundation. A 2015 study by Washington's chief financial officer compared the combined tax levies of each state's largest city, considering automobile, income, sales, and property taxes. The finding? Philadelphians making $25,000 a year have the highest tax levy for that income level among all the cities studied, at nearly $4,250.

    Adding a soda tax would not only exacerbate this overtaxation, but it would also invade the one place where Philadelphians aren't currently taxed: the grocery store.

    Those who claim consumers wouldn't notice the price change should learn a lesson from the cigarette tax. Targeting cigarettes for additional levies has often led to more cross-border cigarette purchases and increased cigarette smuggling. In fact, more than 14 percent of all cigarettes consumed in Pennsylvania in 2013 arrived via illegal, long-haul, large shipments, or organized smuggling.

    Given Philadelphia's proximity to New Jersey, Kenney's plan would create a strong incentive to cross the river to avoid the onerous tax. It is no wonder that John Holub, president of the New Jersey Retail Merchants Association, recently wrote, "For Philadelphians worried about their grocery bills going up: New Jersey is open for business. We're only a short drive away, and you can buy your favorite beverages here for half the cost."

    Furthermore, the "soda tax" goes far beyond soda. Virtually every beverage with added sugar - fruit juices, sports drinks, and energy drinks, among others - would be subject to the tax. At the same time, the tax would not apply to other household items with added sugar, such as cookies, candy, and ice cream. Indeed, the plan has little to do with encouraging healthy living and everything to do with taking more from Philadelphians' pocketbooks.

    While ensuring that preschools and libraries have adequate resources is a noble endeavor, asking the city's poorest residents to shoulder a disproportionate share of this burden is unfair and ill-advised. That's not to say leaders should simply find different pockets to empty for their proposal. Far from it.

    Instead, City Council should better prioritize spending and identify potential waste - including evaluating questionable pension perks and bonus plans for city workers. This would serve the city far better than increasing the tax load already shouldered by overtaxed and struggling Philadelphians.

    Pete Sepp is president of the National Taxpayers Union. info@ntu.org

    Matthew Brouillette is president and CEO of the Commonwealth Foundation. info@commonwealthfoundation.org

  • Philly.com - May 8, 2016

    Reassessment an underassessment for many, city says

    When Philadelphia launched its first property reassessment overhaul in decades in 2013, it was pitched as a way to level the playing field when it came to real estate taxes.

    People's homes and businesses would be valued at 100 percent of market rate, making the assessments "fair and accurate and uniform," Michael Piper, chief assessment officer, said in an interview this week.

    Now, city officials say they got a good part of it wrong. So wrong, in fact, that they have concluded that they underassessed land values for 69 percent of the city's 495,000 residential properties. An additional 30 percent were overvalued.

    City officials now say the effort - called the Actual Value Initiative (AVI) - has proved largely inaccurate when assigning value to the land portion of properties.

    "We had problems in some areas - in fact, in a lot of areas - where the land portion of the assessment didn't look like what the market was showing us it should be," Piper said.

    In most instances, any increase in the land's value was offset by a decrease in the value of any structures on the land, so taxes were not impacted.

    For homeowners with tax abatements, however, there has been a shocking jump in the portion of their properties that is taxed - the land.

    "The process is clearly flawed and erratic. It changed overnight with no explanation," said Rick Piper, owner of a $495,000 Center City condo. He is not related to Michael Piper.

    The reassessment has resulted in an additional $2 billion in total assessed value for the city to tax, creating an additional $31 million in revenue, of which the city will keep $14 million and $17 million will go to the School District.

    And there is more to come. The city's Office of Property Assessment (OPA) is wrapping up its revaluation of vacant land this year and will reassess all commercial properties next year. The city is predicting a 3 percent increase in revenue from commercial properties for 2018.

    City Controller Alan Butkovitz, a critic of AVI, said this week that the new land values seem to be a discreet tax increase.

    "Back in 2013, the city's expectation was that the valuation would be $99 billion, and it's fallen to $89 billion. ... They've been losing appeals left and right," Butkovitz said, adding that increasing the land value is a "means of patching this hole."

    Michael Piper has rebutted that notion. On Wednesday, city Finance Director Rob Dubow said, "Their job is to get assessments accurate, not raise revenue."

    As Piper explained it, the assessment problem is rather simple. The city was more concerned with the overall assessed value of a property as opposed to the values of its parts - the land and the structures on the land.

    Only after getting numerous phone calls did the city take another look.

    Indeed, there are examples of assessors addressing improper land values.

    Take the small Cresmont Farms neighborhood in the Northeast. The land value on most of the properties was placed at $68,000, despite lot sizes ranging from 12,649 square feet to 23,700 square feet. The most recent reassessment adjusted land values to better reflect lot sizes; homes did not see a change in total value.

    There are some curious cases in the latest reassessment, however, such as the condominium complex Center City One on 13th and Spruce Streets, where residents saw dramatic differences in their assessments despite having same-size units on the same floor. (Piper said at least 25 recent sales at Center City One were taken into consideration when determining the new values.)

    In residential streets like the 1100 block of Titan Street in South Philadelphia, the land values on the same side of one block fluctuated from $59 per square foot to $149 per square foot, despite the same or similar lot sizes.

    But perhaps most perplexed are homeowners who benefit from 10-year tax abatements and now have seen the value of the taxable portion of their property jump.

    Land values have increased for about 12,000 of the city's 15,000 properties that have tax abatements.

    Rick Piper, who lives in a 19th-floor condominium at Symphony House on South Broad Street and owns two other condos at Center City One, saw the Symphony House condo's assessed land value go from $7,100 to $44,550. He said his taxes will go from $98 a year to more than $600.

    Piper, 68, former owner of the 12th Street Gym, said that while he can afford his tax increase, he is troubled by the "sneaky" surprise.

    "How about telling the public what's going on?" Piper asked.

    City officials said that the assessment notices are their way of telling people about the increases. Once people receive their new assessments, they can apply for a First Level Review by May 20. Formal appeal applications are due Oct. 3. New tax bills won't be due until February or March.

    Overall, 85 percent of properties in the city saw no change, or saw a decrease, in their total market value assessments. The areas that saw the highest increases included Center City, South Philadelphia, and Southwest Philadelphia.

    The city used recent sales data to determine assessment values. For the land values in particular, OPA looked at recent sales of vacant land as a base.

    "The DNA of what we do with everything is sales," Michael Piper said.

    Ideally, the city should be assessing all properties each year. However, it does not have the capacity to do so, Piper said. New software is expected to be installed by July 2018 that will allow yearly assessments.

    Councilman Alan Domb, a real estate mogul known as the "Condo King," said market values have gone up 3 percent or 4 percent each year since AVI.

    "We could be collecting $40 million more each year" if assessments matched the current market, he said.

    Domb said land values, especially in commercial high rises, are undervalued. He would like to see the city ramp up its efforts to accurately assess all properties.

    "You wouldn't be talking about any soda tax if we had this," Domb said.

    Once the $7.2 million system is up and running, city officials estimate, there will be a property tax-revenue increase of at least 3 percent each year through 2020.

  • Bucks County Courier Times - May 8, 2016

    Opinion: Smoking, soda and plastic bags

    With the number of places where smoking is prohibited likely to soon outnumber the places where you can light up, it seems only a matter of time before the privacy of one’s home will afford the only safe haven from the anti-tobacco police. Yet even that venue will disappear July 1 for those Montgomery County residents living in public housing owned and operated by the county housing authority.

    Come July, tenants in the 616 public housing apartments and townhouses for those with low incomes, the elderly and the disabled will have to go outside to smoke — at least 25 feet away from the buildings — or presumably be fined or even evicted if they fail to comply. The reasons given for the smoking ban: the health of the smoker and those subject to second-hand smoke; reducing the risk of fire and cutting the costs the authority incurs when it preps a unit for a new tenant after a tenant who smoked moves out.

    Smoking has long been the target of social engineers, and they’ve been pretty successful in banishing smokers not only from workplaces and other indoor spaces but from outdoor areas like parks and stadiums. (On the same day smoking in public housing was outlawed, the Montco commissioners ordered a smoking ban, including the use of e-cigarettes, in county parks, along county trails and at county historic sites.) But tobacco, which remains a major U.S. industry, isn’t the social engineers’ only target.

    Philadelphia Mayor Jim Kenney wants to impose a tax of 3 cents per ounce on all soda drinks containing sugar sold in the city. Since Philadelphia never seems to have enough money for anything and its schools are the very definition of “disaster,” Kenney says the tax money would be used for “education initiatives and recreational facilities.”

    Advocates of the tax like to throw in that it will help curb obesity, although the evidence for that claim is sketchy at best. What’s more, if the tax does encourage a great many people to give up their Pepsi and Coke to try to slim down or just save money, Kenney won’t get the revenue he needs for schools and parks. More likely, the tax won’t make people quit, but it will make them angry and place an added economic burden on those least able to afford it.

    Meanwhile in New York City, where a proposed soda tax went flat, City Council just approved a bill that would require most merchants to charge customers at least a nickel (more if they desire) for each grocery or shopping bag, plastic or paper. The merchants would get to keep the money they collect. The idea is to wean customers away from using plastic bags, 10 billion of which the city sanitation department says are tossed in the trash every year. Of course, stores began using plastic bags because of all the trees supposedly felled to produce paper bags.

    While all of these laws may be well-intentioned, all of them impose limits on the way we want to live and perhaps the way we could live if government weren’t so eager to inject itself into everything we do.

  • PhillyVoice - May 6, 2016

    Quiñones-Sánchez says there are alternatives to soda tax

    Joined by Taubenberger and Blackwell, councilwoman plans to vote 'no' on Kenney's spending plan

    On Wednesday, in a vivid show of opposition to Mayor Jim Kenney's proposal to tax beverages with added sugar, Teamsters in 18-wheelers surrounded City Hall and blared their horns to let the legislators inside know how they felt.

    And three city councilmembers joined them. Attending the rally were Maria Quiñones-Sánchez (D-7th District), Jannie Blackwell (D-3rd District) and Al Taubenberger (At-large), all ready to publicly choose a side on the sugary drinks tax debate and firmly prepared to vote no.

    The mayor has proposed the three-cents-per-ounce tax, expected to generate about $95 million in annual revenue, to pay for a number of ambitious initiatives, including a $300 million bond issue for improvements at parks, rec centers and libraries; $26 million for a new pre-K program; $6 million for a community schools; $550,000 for police body cameras; and $26 million into the city's pension fund.

    Noting that she had 700 jobs to protect in her district at a Coca-Cola bottling plant on Erie Avenue in Juniata, Quinones-Sánchez said in an interview Thursday that the tax would hit the beverage industry too hard.

    "If we are going to do a sugar tax, let's do all sugar. That way, it's less for everybody." – Councilwoman Maria Quiñones-Sánchez

    Soda, she said, is an "anchor product" that helps get people into stores to buy other products. If people leave Philadelphia to get their soda elsewhere, they'll likely buy other products elsewhere, as well, she said.

    A lesser tax aimed at a broader industry or product might be easier to swallow, said Quinones-Sánchez, suggesting that any product with added sugar – cookies, candy and chocolate, for example – be taxed at a lower rate across the board to raise the same, or more, revenue.

    "If we are going to do a sugar tax, let's do all sugar," she said. "That way, it's less for everybody."

    Quinones-Sánchez said she supports the move to improve civic spaces – and the rest of the mayor's proposals – without any tax at all, adding she believed there are other places in the city's $4.1 billion spending plan to find money for the proposals.

    "I think first, that what all mayors do on their first budget, is articulate what their goals are," she said in an interview. "There are some things that will take longer than others."

    But Rob Dubow, Philadelphia's director of finance, said last week that the city couldn't even afford the $300 million bond to rehabilitate parks, rec centers and libraries without the sugary drinks tax.

    "We don’t have the resources elsewhere in our budget to pay for these initiatives," he told PhillyVoice.

    In a separate interview on Thursday, Taubenberger said he, too, supported the mayor's goals, but offered no alternative ways to fund them.

    "I'm not going to say anything at this point, not anything specific," he said. "But we are looking at everything."

    Taubenberger said the tax is too onerous on the beverage industry, noting that a broader tax could raise similar funds without targeting one group.

    "These are all, absolutely, noble causes. But the tax is not and that's a conundrum," he said.

    PhillyVoice reached out to Blackwell on Wednesday for comment on her opposition to the soda tax, but she did not respond.

    SEEING ALTERNATIVES

    Quinones-Sánchez, however, maintained that new taxes aren't the only way to fund Kenney's initiatives.

    "There are a lot of areas in the budget that could be looked at," she said, pointing to the high initial costs of some of the elements of the mayor's proposal.

    "Does he really need $26 million in Year One [for pre-K]?" Quinones-Sánchez asked, saying the program will take time to grow and shouldn't require such a high price tag initially.

    The councilwoman also said the city is "leaving money on the table" as far as real estate taxes are concerned. A recent report from the office of the City Controller Alan Butkovitz, she said, claims the city can raise $30 million in additional revenue through property reassessments.

    By conducting reassessments more quickly, the city can increase property tax revenues, she said.

    However, on Friday, Mike Dunn, deputy communications director for the city of Philadelphia, said that $30 million is already allocated for school children - as 55-percent of all property taxes goes to the School District, he said - and the rest to existing city services.

    "That [$30 million] is already budgeted for school children and existing city services," he wrote in an email. "Another revenue stream is needed for the expansion of pre-K, community schools, and improvements to rec. centers, libraries and parks."

    But, the councilwoman believes that the city could tap into other revenue sources, as well.

    With "$80 million in prevention dollars" earmarked for use in creating strategies to keep children off welfare, the city might be able to direct some of that funding to the mayor's pre-K initiative, she said.

    "You would think that's one of the places where we can say 'that's part of our prevention strategy'," said Quinones-Sánchez. "That has not been done."

    And the councilwoman noted that in 2014, through the expansion of the Affordable Care Act, Philadelphia was able to access $300 million in new federal funding.

    "That's another place" where funding could be found, she said. "But, again, that hasn't been part of the conversation."

    Minus any new funding sources, Quinones-Sánchez said the city could expand existing programs to do much of what Kenney hopes to achieve, at likely a fraction of the cost. For example, the councilwoman said she supported a bill passed to add a surcharge to parking tickets to raise funds for parks maintenance.

    And while some may argue differently, Quinones-Sánchez said that measure has helped improve city parks.

    "Maybe we could expand that," she said. "That has been effective."

  • The Philadelphia Tribune - May 6, 2016

    Council cools to proposed sugary drink tax

    A day after Wednesday’s protest against Mayor Jim Kenney’s proposed 3-cents-an-ounce tax on sugary beverages, City Council members Maria D. Quiñones–Sánchez and Jannie Blackwell elaborated on their stance ahead of the council’s public session on Thursday.

    Councilman Al Taubenberger has joined them in voicing opposition to the proposed fee, and by the sounds of things, it will be very hard for the Kenney administration to muster the nine council votes needed to pass the ordinance, which is expected to generate about $400 million over the next five years.

    “I’m for pre–k, but not the sugar tax,” said Blackwell, chair of the council’s education committee. “I think he means well. Hopefully, he’ll find a way to work things out in such a way that council can agree with it. But I don’t think [nine votes] exist at this point, so we will see what happens. We have until June 16 when we recess, so we will see how it works out.” Council President Darrell Clarke also sounded lukewarm regarding the proposal, noting that 17 council members “will continue the process,” and will then come to a conclusion.

    “Three members of council attended a rally and said they did not support it,” Clarke said. “I don’t think you should take too much from that, but the reality is, the process continues and we will ultimately work out whatever we’re going to work out, with respects to the support, opposition or possibly changing the proposal.

    “I don’t ever talk about my position until it’s time for a vote, but I am concerned about the three–cents–per–ounce proposal; I do believe it will probably have some impact on small businesses throughout the city, so I’m a little concerned about that,” he added.

    Quiñones–Sánchez, who has a bottling plant and a number of neighborhood stores in her district, said Kenney ought to look elsewhere for his requested funds. Quiñones–Sánchez explained her objection, saying that “everything I’ve done for eight years was to get us on a road to progressive business taxation, so on that alone, I couldn’t support something as regressive as what’s being proposed.”

    “My concern is I believe there are other things we are leaving on the table,” she added.

    “City Controller Alan Butkovitz confirmed what many of us have been saying: that the lack of Office of Property Assessment oversight leaves about $30 million on the table, and in the five-year plan, there is $217 million in wage cuts because it assumes we will have the constitutional amendment to the bifurcation of taxes,” Quiñones–Sánchez said. “If you have a $4 billion budget, a mayor has to be able to identify $100 million in spending to support his priorities, without resorting to a tax first…for me, it’s about progressive taxation,” she said.

    Quiñones–Sánchez said funding of universal pre–kindergarten should come through a hike in real estate taxes, if through any tax at all.

    Not everyone on council considered the soda tax proposal was dead in the water, however.

    Councilman Curtis Jones Jr. said he thought the nine needed council votes could already exist.

    “I’m not going to say ‘should.’ The answer is ‘could’ because a lot of people are not giving their positions yet, because they don’t want to be targeted,” Jones said. “I talk to people off the record as a colleague, and they know the devil is in the details. And to the degree of which recreation centers, and how he wants to implement that pre–k program — those details are important in the final decision of those members.”

    In other developments, the City Council passed a resolution, sponsored by Councilman Derek Green, authorizing the committee on public health to further investigate the effects that medical marijuana would have on the city.

    Green’s bill comes in the wake of Gov. Tom Wolf signing the Medicinal Marijuana Act, which limits the growing and processing of medical marijuana to state-approved vendors and allows dispensaries to sell the product in an edible form.

    “I would like to open up the discussion to get some perspective on how this new state law will impact the city of Philadelphia.” Green said. “Twenty–four states and the District of Columbia allow medical marijuana to be used by their citizens that have serious medical conditions. This resolution provides an opportunity to have a conversation and dialogue with these jurisdictions so that we can learn best practices and procedures with regards to medical marijuana.”

  • Metro - May 6, 2016

    The Ernest Opinion: Working-class Philadelphians will not be ignored over this pathetic sugary drink tax

    Mayor’s office pretending big corporations are the only ones behind this revolt is ridiculous.

    I don’t like to be lied to or lied about. Especially when the lie is coming from the mayor’s office.

    Wednesday’s rally outside City Hall protesting the sugary drink tax, which is intended to fund Mayor Jim Kenney’s universal pre-kindergarten initiative, was filled with concerned Philadelphians speaking out against this proposal.

    Lauren Hitt, a spokesperson for the mayor’s office, told the press that “the soda industry paid a lot of people to come in from New Jersey to make it seem like this opposition was driven by the people and not millionaires.”

    But I was there, and so were many working-class Philadelphians who weren’t campaigning on behalf of any corporate interests or taking any of their money.

    “There’s got to be a better way to fund these schools then taxing my family,” said Monica Brown, a Southwest Philly resident who works two jobs to support her three sons. “I am here because I can’t afford another crazy expense for my family’s tight budget.”

    Brown is part of Philadelphians Against the Grocery Tax Coalition, locals from small businesses and community organizations who oppose the tax. “It’s not just soda they plan to tax, but many of the juices and other beverages that contain sugar,” she added. “The mayor’s office love calling it a soda tax because it makes it seem as though it’s only one item. ... It’s seriously a lot of the beverages at the grocery store that I buy to help feed my sons.”

    Kenney’s office is using the big-bad-corporation fear tactic to avoid looking for alternative funding for universal pre-K. Blame the money-hungry private interests that are trying to take away from the poor.

    I wonder how Kenney feels about outsiders such as Johnny Doc and George Norcross’ influence on City Hall. Yeah, I’ll wait.

    But instead of trying to seriously address the regressive vibe of this tax on working-class Philadelphians who aren’t being paid to take off work like Monica Brown to try stop this tax from affecting her — they would rather play the blame game.

    I salute the three City Councillors — Jannie Blackwell, a Democrat from District Three; Maria D. Quinones-Sanchez, a Democrat representing the Seventh District; and Al Taubenberger, a Republican councilman at large — who have spoken out against this tax because their constituents would be disproportionately affected by it.

    “Council can come up with other ways to do the right thing,” Quinones-Sanchez told the crowd at Wednesday’s rally.

    I agree with her. With City Commissioners doing virtually nothing directly worthy of their six-figure salaries and other wasteful expenditures going completely unchecked, taxing the poor should be the last resort, not the only one.

  • Philly.com - May 6, 2016

    Want political chips with your soda tax?

    I WANTED to frame this as "Soda Wars" because Wednesday, May the Fourth (be with you), was (nerd alert!) "Star Wars Day." It didn't work, because Jim Kenney looks more like Chewbacca than Luke Skywalker, and while former New York City Mayor Michael Bloomberg is about Yoda's height, I had no one to play Darth Vader.

    On the soda tax, which is where I'm going, reporting is now focused on how both sides - the pro-tax Philadelphians for a Fair Future and the antitax Philadelphians Against the Grocery Tax - are funded.

    The two major funders of the pro-tax side are Texas millionaires Laura and John Arnold, and Bloomberg, the Big Bucks Buttinski. They want Philadelphia - America's poorest big city - to levy the biggest soda tax in this galaxy, which is not far, far away.

    The antitax side is funded mainly by the American Beverage Association, which has the audacity to fight a tax that singles out its product. The ABA's unspoken fear is being turned into the next tobacco.

    The demagoguery started early, when Kenney, in his budget address, said this about an industry that pays all taxes asked of it: "Big Soda charges our citizens, small businesses, and distributors much, much more than what it costs for them to make the soda."

    That is a business practice called "profit." If the price is too high, customers won't buy, and that's what bottlers - already experiencing falling sales - fear will happen.

    Then Kenny got really crazy, Trump crazy.

    About soda, he said, "There's a lot of money being made off the backs of poor people," and the industry has "been taxing the poor for generations . . ." He didn't mention his regressive tax falls heaviest on the poor.

    In another howler, Kenney said, "There is simply nowhere else to find this revenue," meaning the $80 million a year to fund pre-K, plus some improvements for parks and rec centers.

    Almost the same words were used in 1994 when a 10 percent tax on liquor by the drink was imposed, and $2-a-pack tax on cigarettes in 2014.

    Each tax was for "the schools" and "the children." Those are like magic beans to some people who suspend critical thinking.

    History teaches that in a few years, Kenney will be rattling his cup for more funds. He will discover something else to tax, perhaps cheesesteaks, perhaps cupcakes, perhaps milkshakes.

    Millions will be spent in the coming weeks as each side tries to win over a lot of people, but the only people who count are the nine on City Council who will constitute a majority needed to approve Kenney's eye-popping and hypocritical 3-cent-an-ounce tax on sugary drinks.

    Hypocritical because, as a councilman, Kenney strongly opposed the same tax - at only 2 cents an ounce - proposed by Mayor Nutter, who tried it twice and failed.

    At a Wednesday antitax rally, political chips started falling. Three Council members said they'd vote against the tax - Republican Al Taubenberger and Democrats Jannie Blackwell and Maria Quiñones-Sánchez.

    Kenney said, "We did not have them counted in our column to begin with." In the past, he's called Blackwell a mentor and Sánchez a close ally.

    Republican Councilman Brian O'Neill is on record as opposing the tax. Democratic Council President Darrell Clarke doubted the tax will raise enough and feared, "We will have to raise another tax ..." I'll count him as no, making five opposed. Republican David Oh should make six of 17. Three more dooms the tax.

    No Council member - not even hellacious education advocate Democrat Helen Gym - has declared in favor of the tax. I still count her as yes, along with Democrats Mark Squilla and Bobby Henon.

    The progressive Blackwell said the cause is good, but the tax is bad for her constituents. Council members representing poor districts might be feeling the same.

    The Teamsters are putting enormous pressure on Democrats and "they're panicking," a political insider tells me.

    If Kenney proposed a twice-failed tax without having a majority of Council in his pocket, that's political malfeasance.

    Could he have been that dumb? Does he have a secret path to victory? Will he explode like the Death Star?

    The sequel will be out soon.

  • Philadelphia Daily News - May 6, 2016

    Want political chips with your soda tax?

    I WANTED to frame this as "Soda Wars" because Wednesday, May the Fourth (be with you), was (nerd alert!) "Star Wars Day." It didn't work, because Jim Kenney looks more like Chewbacca than Luke Skywalker, and while former New York City Mayor Michael Bloomberg is about Yoda's height, I had no one to play Darth Vader.

    On the soda tax, which is where I'm going, reporting is now focused on how both sides - the pro-tax Philadelphians for a Fair Future and the antitax Philadelphians Against the Grocery Tax - are funded.

    The two major funders of the pro-tax side are Texas millionaires Laura and John Arnold, and Bloomberg, the Big Bucks Buttinski. They want Philadelphia - America's poorest big city - to levy the biggest soda tax in this galaxy, which is not far, far away.

    The antitax side is funded mainly by the American Beverage Association, which has the audacity to fight a tax that singles out its product. The ABA's unspoken fear is being turned into the next tobacco.

    The demagoguery started early, when Kenney, in his budget address, said this about an industry that pays all taxes asked of it: "Big Soda charges our citizens, small businesses, and distributors much, much more than what it costs for them to make the soda."

    That is a business practice called "profit." If the price is too high, customers won't buy, and that's what bottlers - already experiencing falling sales - fear will happen.

    Then Kenny got really crazy, Trump crazy.

    About soda, he said, "There's a lot of money being made off the backs of poor people," and the industry has "been taxing the poor for generations . . ."

    He didn't mention his regressive tax falls heaviest on the poor.

    In another howler, Kenney said, "There is simply nowhere else to find this revenue," meaning the $80 million a year to fund pre-K, plus some improvements for parks and rec centers.

    Almost the same words were used in 1994 when a 10 percent tax on liquor by the drink was imposed, and $2-a-pack tax on cigarettes in 2014.

    Each tax was for "the schools" and "the children." Those are like magic beans to some people who suspend critical thinking.

    History teaches that in a few years, Kenney will be rattling his cup for more funds. He will discover something else to tax, perhaps cheesesteaks, perhaps cupcakes, perhaps milkshakes.

    Millions will be spent in the coming weeks as each side tries to win over a lot of people, but the only people who count are the nine on City Council who will constitute a majority needed to approve Kenney's eye-popping and hypocritical 3-cent-an-ounce tax on sugary drinks.

    Hypocritical because, as a councilman, Kenney strongly opposed the same tax - at only 2 cents an ounce - proposed by Mayor Nutter, who tried it twice and failed.

    At a Wednesday antitax rally, political chips started falling. Three Council members said they'd vote against the tax - Republican Al Taubenberger and Democrats Jannie Blackwell and Maria Quiñones-Sánchez.

    Kenney said, "We did not have them counted in our column to begin with." In the past, he's called Blackwell a mentor and Sánchez a close ally.

    Republican Councilman Brian O'Neill is on record as opposing the tax. Democratic Council President Darrell Clarke doubted the tax will raise enough and feared, "We will have to raise another tax ..." I'll count him as no, making five opposed. Republican David Oh should make six of 17. Three more dooms the tax.

    No Council member - not even hellacious education advocate Democrat Helen Gym - has declared in favor of the tax. I still count her as yes, along with Democrats Mark Squilla and Bobby Henon.

    The progressive Blackwell said the cause is good, but the tax is bad for her constituents. Council members representing poor districts might be feeling the same.

    The Teamsters are putting enormous pressure on Democrats and "they're panicking," a political insider tells me.

    If Kenney proposed a twice-failed tax without having a majority of Council in his pocket, that's political malfeasance.

    Could he have been that dumb? Does he have a secret path to victory? Will he explode like the Death Star?

    The sequel will be out soon.

  • Philly.com - May 5, 2016

    Letters: Gauge real impact of soda tax

    Gauge real impact on real people

    The Harvard University study projecting major health benefits from Mayor Kenney's proposed tax on sugary drinks is a computer simulation based on assumptions about how people's behavior might change ("Study: From drinks tax, a healthier city," Thursday). There seemed to be no consideration of the likely results of demonizing a common and popular product.

    An actual study would look at the effect on the commerce of the city, including the impact on grocers large and small; the effect on employment; the likelihood that citizens would substitute other products for the heavily taxed sodas; and the possibility that those with cars would smuggle sodas. If the tax is high enough, I would expect an underground market to develop, creating a newly criminalized class.

    Instead of this 3-cents-an-ounce tax, why doesn't the city government assess taxes that are designed to do nothing more than raise revenue without trying to socially engineer behavior.

  • WURD Radio - May 5, 2016

    The Nick Taliaferro Show Mustafa Rasheed, Philadelphians for a Fair Future

    “Having conversations about the implementation at this point is far more premature than we need to be.” Mustafa Rasheed, a representative from Philadelphians for a Fair Future responding to a question about how the Mayor’s pre-k plan will actually be implemented if the tax is passed.

  • Philly.com - May 5, 2016

    Commentary: What we tax is as important as how much we tax

    WHEN JIM KENNEY was elected mayor, we knew what we were getting: a man who wanted to protect and to grow the city and its children. That's what we got.

    Many Philadelphians of goodwill are in an ethical quandary: Do we agree that a robust pre-K covering the vulnerable children of Philadelphia is a good idea? Also parks, libraries, rec centers and green jobs? Of course. There's a plan for that: It'll cost $95 million a year over four years. Who's going to pay for it? There's the rub.

    The funding solution lies in an increased sales tax, an excise tax, really. It will fall upon sugar-enhanced beverages. It's called the "soda tax," but also will cover energy drinks, bottled cappuccino, and many other beverages.

    There's no getting around the reality that a very few, very different sectors of Philadelphia's community will be affected: beverage companies, smaller retail outlets and people of modest means.

    That's a pretty narrow base upon which to expect $95 million a year. As it stands, drinks that fall under the definition of "sweetened" will cost 3 cents per ounce over the retail price. That sounds pretty modest, but if a family drinks only two two-liter bottles of soda per week, that will cost $212 a year. That might be reasonable to some, but consider this:

    The median annual property tax for a residential property in Philadelphia is $1,207 a year; that lowball-estimate soda tax equals 18 percent of that annual property tax.

    Shall we drill down to more specifics? Let's try the 19133 ZIP code, which has the lowest median household income anywhere in the city. The soda-tax estimate would make up about 45 percent of the residential property tax (median $482).

    In 19118, Chestnut Hill, the soda tax would drop to about 4 percent of the annual property tax.

    You see the problem. So what solution is truly fair to distributors, retailers and citizens alike? The answer lies under our feet.

    Since 2013, the city of Philadelphia started the process of Actual Value Initiative, or AVI. AVI managed to achieve what decades of inattention did not: property values that were close to reality. The Office of Property Assessment is moving forward by assessing land values correctly and targeting more accuracy. OPA costs from $10 million to $12 million a year.

    So, let's fund these programs - and more - through self-generated property taxation while reducing city reliance on economically unhelpful and outdated taxes, such as the soda tax.

    Right now, a charge on the taxable land values in Philadelphia could bring in the same amount of revenue as proposed, with a much more progressive outcome based upon ability to pay.

    Results? The soda tax in the lowest income ZIP code 19133 would be transformed into a modest $12 a year extra charge on the land portion of the property tax. Chestnut Hill would go to about $450 a year.

    Good tax policy not only means getting the revenue for the programs we want, but making sure that all share in their contributions to the community: residential and nonresidential, in the neighborhoods and in Center City.

  • Philly.com - May 5, 2016

    Commentary: Funding pre-K doesn't solve problem of underfunded schools

    AS A CAREER educator dedicated to improving our schools and ensuring that children in our poorest communities get the chance to succeed, I applaud Mayor Kenney for kicking off his term in office by seeking to expand educational opportunities for Philadelphia's most vulnerable children.

    I have serious concerns, however, that the mayor's plan to expand universal pre-kindergarten to every Philadelphia child will not achieve what it is designed to do: putting tens of thousands of our poorest children on the path to academic success.

    Kenney's proposal would effectively reinvent the wheel. Instead of providing additional resources for the Philadelphia School District's nationally recognized pre-K program (the largest in the city, serving about 9,000 3- and 4-years-olds) the administration wants to expand the use of private providers. This approach does a disservice both to students and to teachers.

    According to a recent report by the William Penn Foundation, many of Philadelphia's privately run pre-K facilities pay teachers wages of only $10 an hour. While the mayor has talked frequently about the additional jobs expanded pre-K would create in our city's poorest communities, he needs to ensure that these taxpayer-supported positions provide unionized family-sustaining wages for the primarily female and African-American teaching workforce. Kenney has long been a supporter of organized labor and the city's prevailing wage law, but his current approach violates the spirit of that commitment.

    Pay scales this low - some facilities pay teachers only the minimum wage - won't attract the highly qualified professionals these children deserve. We need early childhood specialists in front of classrooms who have the skills to put children on the path to academic success, not baby-sitters. As for privately run pre-K facilities that are currently succeeding, we should be working toward unionizing their teachers, as well. If we want to ensure that educators with a proven track record continue to remain in the classroom, we need to provide them with the financial stability to support their families.

    Beginning in 2013, the district began outsourcing thousands of pre-K seats to private providers. Billed as a cost-saving measure, it expanded the low-wage workforce the mayor is seeking to double down on. Kenney must reverse this disturbing trend and strengthen a workforce of properly paid and highly qualified district teachers.

    But before the mayor even pursues pre-K or other ambitious initiatives such as community schools, he needs first to tackle the district's long-running fiscal crisis head-on.

    What benefit will these new programs bring to children forced to attend kindergarten through 12th grade in schools that don't even have libraries? Not 1 cent of the nearly half-billion dollars in new spending the mayor is proposing is earmarked for rehiring recently laid-off teachers, nurses and counselors. It does nothing to restore art, advanced placement and extracurricular activities that have been cut. Even if we provide children with the best pre-K experience, we still won't see a benefit if they are forced to spend the following 13 years in underfunded and underresourced schools. We must address our schools' chronic budgetary shortfalls before discussing program expansion.

    In addition, I have concerns about the revenue source the mayor is relying on to fund these proposals. Instead of turning to tried and tested methods for securing funding, the mayor has embarked upon a risky strategy to tax sugar-sweetened beverages that could result in a protracted legal challenge. Even the mayor has acknowledged such a challenge is a "very real possibility," and Finance Director Rob Dubow has testified before City Council that this could delay implementation of the tax. If policy objectives such as universal pre-K are a priority - and I believe they should be - then the mayor should find a dependable source of revenue that can't be tied up for years in the courts or easily evaded.

    George Bezanis is a social studies teacher at Central High School and serves as the Philadelphia Federation of Teachers' representative at the school. He is a leader of the union's Caucus of Working Educators.

  • Metro - May 5, 2016

    New Bloomberg-backed, pro-soda tax ad campaign launches in Philly

    Mayor Jim Kenney’s proposed three-cent-per-ounce tax on soda got a big boost on Thursday with the launch of a new ad campaign costing nearly a million dollars of former New York City Mayor Michael Bloomberg’s money.

    The new, 30-second ad, titled, “Lift,” opens with a shot of a pair of sneakers dangling from a telephone wire to a woman’s soft-spoken voice which starts out saying, “Philadelphia’s chance to help lift our children with city-wide pre-K is now.”

    It then quotes the Philadelphia Daily News and Inquirer endorsements Kenney received in March for the soda tax proposal.

    The new ad campaign will air on local television stations for the next three weeks. It’s the central element of an $825,000 advertising purchase that includes TV, radio and digital billboards, all sponsored with funding from Bloomberg and Philadelphians for a Fair Future. The group claims to represent a coalition of 62 organizations from around the city – all focused on raising public awareness about the importance of the mayor’s budget initiatives.

    “It’s great to have the support of a nationally recognized businessman,” Kenney said Thursday. “I hope these ads will correct the misinformation the other side has already spent millions spreading.”

    During his time as New York City mayor, Bloomberg pushed for a city-wide ban on the sale of sugary juice larger than 16 ounces. His efforts, however, were unsuccessful.

    On Wednesday, members of a group called the Philadelphians Against the Grocery Tax came out in full force on the north apron of City Hall to protest the tax, complete with a giant, mock grocery aisle display of sugary drinks. Shortly afterwards, City Council’s Committee of the Whole held an hours-long hearing where dozens of people came forward to testify on the tax – both for and against.

    “After failing to ban oversized sodas in New York City, it now appears that Michael Bloomberg wants to impose his oversized ego and will on tax-weary Philadelphians,” Daniel Grace, Secretary-Treasurer for Teamsters Local 830, said during Wednesday night’s hearing.

    “As Senator Bernie Sanders recently stated, Mayor Jim Kenney's soda tax is regressive. It will primarily hurt the very people it's intended to help. Sanders is right. Now, Bloomberg and John Arnold, a pair of outsider billionaires, are coming into our city to force low-income Philadelphians to pay dearly in order to fulfill their personal agendas…

    “I also find it ironic that the pro-soda tax group can come up with nearly $1 million virtually overnight to pay for an advertising campaign, but claim to have no money or funding alternatives other than a regressive soda tax to pay for universal pre-K and other programs. If anything, the overnight infusion of major dollars into the pro-tax lobbying groups coffers should convince city lawmakers that there are better, fairer ways to fund needed programs other than heaping the enormous burden on the back of one industry."

    The head of another union, however, Gabe Morgan, vice president of 32BJ SEIU, said that his 18,500 members “understand better than most the struggles working and poor people have in this city."

    “We support this because…when you look at other possible options, this really is the best one and the need for pre-K and community schools is overwhelming,” he said.

    “You can’t raise property taxes anymore. Our members are already experiencing being gentrified. They can barely afford property taxes. You can’t raise wage taxes for those already struggling. You can’t raise taxes on small businesses. We think the need here is critical, and if the city doesn’t take action, no one will.”

    Kenney’s proposed FY 2017 budget includes the three-cents-per-ounce tax on sugary drinks as a means to pay for $400 million in new investments over five years, including universal pre-K, community schools, improvements to parks and recreation centers and other initiatives.

    Attempts to reach Bloomberg for comment were unsuccessful at press time.

  • Newsworks - May 5, 2016

    Philly Council president says 3-cent soda tax is too high

    Philadelphia City Council's president is pessimistic that Mayor Jim Kenney's proposed tax on sugary drinks will pass "as is."

    Darrell Clarke said he doubts the 3-cents-per-ounce tariff on soda and other sugary drinks will win enough votes from his colleagues.

    "That number just is not reflective of reality," Clarke said Thursday.

    If the levy is not approved, Councilman Curtis Jones said, there will be no viable way to pay for Kenney's proposed citywide pre-K and improvements to recreation centers and libraries.

    "This is a small town and a network of villages that people get to spend summers at, whether it's a pool or at a baseball field or a boxing gym, and we want to preserve that," he said. "And they're crumbling around our heads."

    A Kenney spokesman said a tax under than 3 cents means less pre-k, fewer community schools and not as many improvements to parks, recreation centers and libraries.

    City Council will vote on whether to apply the tax. Several Council members have already said they oppose the measure.

  • Philadelphia Inquirer - May 5, 2016

    Three Council members come out against sugary-drinks tax

    City Council members have been slow to take sides in the fight over Mayor Kenney's proposed sugary-drinks tax.

    But on Wednesday, some started showing allegiances.

    Three Council members - Republican Al Taubenberger and Democrats Jannie L. Blackwell and Maria D. Quiñones-Sánchez - took the stage at an antitax rally outside City Hall, pledging to vote against the measure.

    "I am proud of you," Quiñones-Sánchez said, speaking from a stage decorated with a backdrop of sugary beverages. "You continue your fight. And let me tell you, Council can come up with other ways to do the right thing."

    In front of her, several hundred protesters, including many who work at the city's bottling plants, packed the sidewalk, wearing matching white and orange shirts and waving signs that read, "No Philly Grocery Tax," the opposition's shorthand for Kenney's proposed tax.

    Around City Hall, nearly a dozen large trucks bearing logos for Coca-Cola, Pepsi, and other beverages were parked in the street. Before the rally and again after, the drivers of those vehicles laid on their horns.

    The Kenney administration was undeterred. "We're very confident about our support in Council," said Lauren Hitt, a spokeswoman. "Nothing about today was a surprise. The soda industry paid a lot of people to come in from New Jersey to make it seem like this opposition was driven by the people and not millionaires, but at the end of the day, polls show that most Philadelphians support the soda tax because it's the fairest way to [pay for] desperately needed educational programs." (The regional Coca-Cola and Pepsi plants are in New Jersey.)

    Kenney has proposed the 3-cents-per-ounce tax to fund several programs, including pre-K and improvements to the city's parks and recreation centers.

    The measure needs nine votes in the 17-member chamber to pass.

    Sánchez, Taubenberger, and Blackwell are the first to publicly lock in their votes, making the moment a notable one in a fight likely to drag on several more weeks. All three had voiced concerns after Kenney proposed the tax.

    Taubenberger said Wednesday that there should be no question about where he stood: "My vote is no. Not now. Not ever."

    Blackwell said she would stand with "all who are this side of the issue."

    "We'll see what happens," she added. "The struggle still continues. But we're on your side."

    Quiñones-Sánchez and Taubenberger both expressed a desire to find other funding methods for Kenney's pre-K plan. Quiñones-Sánchez said the mayor has included wage-tax reductions in the city's five-year plan that could be dropped.

    "I think there is another way that we can give Mayor Kenney his priorities," she said.

    After the rally, the protesters entered an already crowded Council chambers for public testimony on the tax that stretched more than two hours.

    Harold Honickman, a Philadelphia philanthropist who owns Pepsi and Canada Dry bottling operations and has worked to build opposition for the tax on Council, sat in the second row.

    As witnesses took the microphone, testifying in panels alternating for and against the tax, supporters in the galleries broke into cheers each time their side spoke.

    The arguments at the rally and hearing were familiar.

    Those opposed argued the tax would lead to a loss of hundreds of jobs, including for those who bottle it, deliver it, or sell it at corner stores.

    Kenny Poon, who owns a bar and restaurant in Chinatown and used to own a corner store, said that the impact on his business would likely be limited but that his bigger concern was for the Philadelphians living in poverty who used to come into his store with just enough change in their pockets for a can of soda. "This city is so poor," he said. "Why do you want to do a soda tax in such a poor city?"

    On the other side, health advocates argued that enacting a tax would result in less diabetes and longer life expectancies, while rec center leaders talked about the deplorable conditions of the city's playing fields.

    George Matysik, executive director of the Philadelphia Parks Alliance, said the programs the tax would pay for could level the playing field for communities living in poverty. "We're not going to fix that problem by giving them more soda," he said. "We're going to fix that problem by giving them equal opportunities."

  • Metro - May 5, 2016

    Philly protesters call soda tax 'repressive' at boisterous City Hall rally The trucks that carry soda and sugary drinks in bulk snarled traffic Wednesday when they circled City Hall for over an hour.

    Before a backdrop of stockpiled sugary drinks packaged on a podium on City Hall’s north apron, protesters rallied against Mayor Jim Kenney’s proposed soda tax on Wednesday.

    Moments before, dozens of distribution trucks circled City Hall, horns blaring, to signal the rallying cry for the demonstration to begin.

    At three cents per ounce, Kenney plans to use the tax – which would be leveled at distributors – to fund universal pre-K, improvements to park and recreation centers, community schools and reinvest in the city’s beleaguered pension system. He hopes to generate upwards of $400 million over five years, but not everyone is as optimistic about the proposal.

    The measure requires approval by City Council.

    Daniel Grace, treasurer for the Teamsters Local 830, joined several members of Philadelphia City Council and small business owners in support of the Philadelphians Against the Grocery Tax coalition’s cause.

    “Let’s be clear on what the city is proposing – a tax of three cents an ounce on any beverage that contains sugar. Three cents per ounce – not per bottle,” Grace told the crowd.

    “That includes not only your favorite sodas, but also fountain drinks, kids’ juice drinks, lemonade, apple ciders, mixers and mixes, flavored milk, iced tea, iced coffee, enhanced water, energy drinks, sport drinks and other sugar-sweetened beverages that families enjoy everyday," he said. "The Kenney administration’s proposed sugary drink tax is the definition of repressive.”

    Kenny Poon, who owns a good number of restaurants in Chinatown, including Bon Chon, Tango, Tea Do, Yamitsuki Ramen and more, said that he employs about 25 people in his company is trying to open up four more locations in the city, but may have to reconsider if the tax is passed.

    “My partners say, ‘why Philly?’ If they really want to…we might as well move to a different city. I hope its not going to happen,” he said.

    “I’m pretty sure the city can get some money not from the grocery tax.”

    The Kenney administration responded to the outcry Wednesday by saying much of Philly supports the tax.

    "It was a rally funded by the soda industry to try to protect their million-dollar profits. They paid a lot of people to come in from New Jersey to make it seem like this was driven by the people, but at the end of the day, most Philadelphians support the soda tax because its the fairest way to tax desperately needed educational programs," said Communications Director Lauren Hitt.
    Taubenberger, who spent part of Tuesday in a Council hearing addressing the issue with Philadelphia Health Commissioner Thomas Farley, said people want their sugary drinks, and “if we pass this tax, you’re going to see the greatest bootleg operation since prohibition right in this town."

    “No one is going to argue against kindergarten for children. The mayor is right. But the tax is not noble,” Taubenberger said.

    “That tax has more holes in it in how to collect it and everything else since Swiss cheese! You’re putting a citywide burden on the backs of one industry and one customer base.”

    The Philadelphians Against the Grocery Tax coalition claims more than 1,000 businesses have joined their coalition, along with nearly 13,000 citizens.

  • WRAL.Com/AP - May 5, 2016

    3 council members protest against Philly sugary drink tax

    PHILADELPHIA — Three city council members have come out against a sugary drink tax that Philadelphia Mayor Jim Kenney wants to use to fund a universal pre-kindergarten program and other initiatives.

    Republican Council member Al Taubenberger joined Democrats Jannie Blackwell and Maria Quinones-Sanchez at a rally Wednesday outside City Hall. The event was staged by Philadelphians Against The Soda Tax, a group funded by the soft-drink industry.

    Kenney wants to tax the drinks at the rate of 3 cents per ounce, meaning a six-pack of 12-ounce sodas would be taxed $2.16.

    Kenney says he knew some council members would oppose the measure, but is confident he can get nine votes needed for the 17-member council to pass the measure.

  • Philadelphia Tribune - May 4, 2016

    Bloomberg enters sugary tax debate

    Former New York mayor Michael Bloomberg has entered the debate on Mayor Jim Kenney’s 3–cents–per–ounce drink on sugary drinks and has contributed an undisclosed sum to a nonprofit group starting an $825,000 ad campaign this week in support of a the tax.

    Bloomberg tried unsuccessfully to ban oversized sodas in New York, and supported successful soda–tax efforts in Mexico and Berkeley, Calif.

    The Kenney administration is promoting the tax as a way to provide for universal pre–k, and estimates it could generate $400 million over five years. Administration spokeswoman Lauren Hitt said the administration was happy to have Bloomberg’s support.

    “It's great to have the support of a nationally recognized businessman,” Hitt said. “I hope these ads will correct the misinformation the other side has already spent millions spreading.”

    The No Grocery Tax Coalition doesn’t see it that way.

    “Bringing in a New Yorker to force his personal agenda on Philadelphia families is the latest desperate act from an administration that admits it is losing in its attempts to foist this regressive tax on our city," said Anthony Campisi, a spokesman for a coalition against the tax. "The people of New York rejected and resented Mayor Bloomberg's overreaching policies when he was mayor, and now he's trying to export them to Philadelphia families.”

    The American Beverage Association has already spent more than $1.5 million on its Philadelphia anti–tax campaign. Two organized groups have launched counter efforts.

    Daniel H. Grace, spokesman for Teamsters Local 830, which represents a large portion of the area’s beverage delivery workers, bashed Bloomberg as an out–of–towner who should mind his own business.

    “After failing to ban oversized sodas in New York City, it now appears that Michael Bloomberg wants to impose his oversized ego and will on tax–weary Philadelphians. As Sen. Bernie Sanders recently stated, Mayor Jim Kenney's soda tax is regressive. It will primarily hurt the very people it's intended to help — the city's poor,” Grace said. “Sanders is right. Now, Bloomberg and Houston's John Arnold, a pair of outsider billionaires, are coming into our city to force low–income Philadelphians to pay dearly in order to fulfill their own personal agendas. It makes no sense.

    “I also find it ironic that the pro–soda tax group can come up with nearly $1 million virtually overnight to pay for an advertising campaign, but claim to have no money or funding alternatives other than a regressive soda tax to pay for universal pre–k and other programs,” Grace added. “If anything, the overnight infusion of major dollars into the pro–tax lobbying group's coffers should convince city lawmakers that there are better, fairer ways to fund needed programs other than heaping the enormous burden on the back of one industry.”

  • Newsworks - May 4, 2016

    Soda tax opponents organize, send clear message to Philly Council

    Opponents of a proposed sugary drink tax staged a loud protest outside Philadelphia City Hall Wednesday afternoon.

    They were sending a message to City Council members.

    They said it in Spanish and Chinese, while Councilman Al Taubenberger delivered the anti-tax message in English.

    "If we pass this tax, you are going to see the greatest bootlegging operation since Prohibition," he warned.

    Several hundred protesters punctuated by horn-honking truckers signaled their solidarity with Taubenberger's position, telling the councilman's colleagues that they are against the 3-cents-per-ounce levy.

    "The Teamsters stand to lose 2,000 regional jobs if this tax is passed," said Danny Grace, the head of Teamsters Local 830.

    A Kenney administration spokesman disputed that prediction, saying there are only 2,000 Teamsters in the entire region.

    Mayor Jim Kenney proposed the tax as a way of raising millions to cover the costs of citywide pre-K and improvements to city libraries and recreational facilities.

    Kenney's spokesman said the mayor still believes the tax will be approved by City Council.

  • KYW - May 4, 2016

    3 City Council Members Say ‘No’ To Soda Tax During Protest Outside City Hall

    PHILADELPHIA (CBS) — A traffic-snarling protest at City Hall on Wednesday afternoon ended in a victory, of sorts, for the bottlers and retailers who oppose a tax on sugary beverages. They secured three firm votes against the tax from members of Philadelphia City Council.

    It’s been discernible during budget hearings that certain council members lean for or against the three-cents-an-ounce tax that would pay for universal pre-K and renewing city facilities, but three council members removed any doubt about their stance, appearing at a rally staged by the soda-industry-funded Philadelphians Against the Soda Tax.

    “I’m voting with the public who say no taxes,” said Councilwoman Janie Blackwell, “people are talking about what an extra $3 will mean.”

    Blackwell was joined by colleagues Maria Quinones Sanchez and freshman Republican Al Taubenberger, pledging to vote no. She says she is reflecting what she hears from constituents.

    “Everywhere I go I have people say, sure they’re for pre-K, they’re for community schools, they’re for parks and rec, they’re for many things, they’re for libraries,” Blackwell said, “but people are not for another tax.”

    Despite the lack of support from the three council members, Mayor Kenney remains confident his legislation will go through.

    “We are not surprised,” Kenney said. “We did not have them counted in our column to begin with.”

    The mayor needs nine of the remaining 14 votes to get the tax passed. He says council members should consider the state of their communities when casting their vote.

    “People need to look at their district and look at the needs in parks, recreation centers and libraries, the need for pre-K” the mayor said. “We’re not going to stop trying to provide that for everyone, even if they’re not for us.”

    Mayor Kenney says defending the billions in profits of soda manufacturers is not what officials should be doing.

    No council member has come out in firm support of the tax.
  • PhillyVoice - May 4, 2016

    Philly soda tax protesters descend on City Hall for opposition rally

    A large crowd of citizens, local businesses and elected officials rallied outside City Hall on Wednesday afternoon to protest Mayor Jim Kenney's proposed 3-cent-per-ounce tax on sugary beverages in Philadelphia, which has inspired a heated publicity war over a plan to fund universal pre-K, parks improvements and community schools.

    Members of the Philadelphians Against the Grocery Tax coalition gathered to voice opposition to a "regressive" proposal they say will stifle local business, threaten jobs and place further strain on low-income communities. Mayor Kenney and city officials say the tax will improve public health and raise an additional $95 million in annual revenue for the city.

    Several distribution trucks emblazoned with soda brands were led out by Teamsters Local 830 treasurer Daniel Grace, who criticized Mayor Kenney's portrayal of the corporate interests aligned against the tax.

    "The mayor uses the term Big Soda when he talks about why you are out here today fighting this tax. He can use that term all he wants, but when I look at this crowd I see working people with good jobs who want to support their families. There will be a lot fewer of you if this tax is approved,” Grace said.

    Dany Vinas, owner of CTOWN Supermarket, said the tax will drive consumers to suburban markets in order to purchase affected products, including all beverages with added caloric sweeteners. Milk, 100-percent juice and zero-calorie drinks would be excluded from the tax.

    “People won’t stop buying these drinks; they will just stop buying them in Philadelphia,” Vinas said. “That means potential revenues from the tax will be negated while also hurting local suppliers – like myself and my family.”

    Scenes from the protest included both opponents and supporters, who took their message to Twitter in advance of a 5 p.m. public hearing at City Council on Kenney's FY 2016-2017 budget proposal.

  • Philly.com - May 4, 2016

    Commentary: What we tax is as important as how much we tax

    WHEN JIM KENNEY was elected mayor, we knew what we were getting: a man who wanted to protect and to grow the city and its children. That's what we got.

    Many Philadelphians of goodwill are in an ethical quandary: Do we agree that a robust pre-K covering the vulnerable children of Philadelphia is a good idea? Also parks, libraries, rec centers and green jobs? Of course. There's a plan for that: It'll cost $95 million a year over four years. Who's going to pay for it? There's the rub.

    The funding solution lies in an increased sales tax, an excise tax, really. It will fall upon sugar-enhanced beverages. It's called the "soda tax," but also will cover energy drinks, bottled cappuccino, and many other beverages.

    There's no getting around the reality that a very few, very different sectors of Philadelphia's community will be affected: beverage companies, smaller retail outlets and people of modest means.

    That's a pretty narrow base upon which to expect $95 million a year. As it stands, drinks that fall under the definition of "sweetened" will cost 3 cents per ounce over the retail price. That sounds pretty modest, but if a family drinks only a two-liter bottle of soda per week, that will cost $212 a year. That might be reasonable to some, but consider this:

    The median annual property tax for a residential property in Philadelphia is $1,207 a year; that lowball-estimate soda tax equals 18 percent of that annual property tax.

    Shall we drill down to more specifics? Let's try the 19133 ZIP code, which has the lowest median household income anywhere in the city. The soda-tax estimate would make up about 45 percent of the residential property tax (median $482).

    In 19118, Chestnut Hill, the soda tax would drop to about 4 percent of the annual property tax.

    You see the problem. So what solution is truly fair to distributors, retailers and citizens alike? The answer lies under our feet.

    Since 2013, the city of Philadelphia started the process of Actual Value Initiative, or AVI. AVI managed to achieve what decades of inattention did not: property values that were close to reality. The Office of Property Assessment is moving forward by assessing land values correctly and targeting more accuracy. OPA costs from $10 million to $12 million a year.

    So, let's fund these programs - and more - through self-generated property taxation while reducing city reliance on economically unhelpful and outdated taxes, such as the soda tax.

    Right now, a charge on the taxable land values in Philadelphia could bring in the same amount of revenue as proposed, with a much more progressive outcome based upon ability to pay.

    Results? The soda tax in the lowest income ZIP code 19133 would be transformed into a modest $12 a year extra charge on the land portion of the property tax. Chestnut Hill would go to about $450 a year.

    Good tax policy not only means getting the revenue for the programs we want, but making sure that all share in their contributions to the community: residential and nonresidential, in the neighborhoods and in Center City.

    Joshua Vincent is executive director and CEO of the Center for the Study of Economics in Philadelphia.

  • Philly.com - May 4, 2016

    Commentary: Funding pre-K doesn't solve problem of underfunded schools

    AS A CAREER educator dedicated to improving our schools and ensuring that children in our poorest communities get the chance to succeed, I applaud Mayor Kenney for kicking off his term in office by seeking to expand educational opportunities for Philadelphia's most vulnerable children.

    I have serious concerns, however, that the mayor's plan to expand universal pre-kindergarten to every Philadelphia child will not achieve what it is designed to do: putting tens of thousands of our poorest children on the path to academic success.

    Kenney's proposal would effectively reinvent the wheel. Instead of providing additional resources for the Philadelphia School District's nationally recognized pre-K program (the largest in the city, serving about 9,000 3- and 4-years-olds) the administration wants to expand the use of private providers. This approach does a disservice both to students and to teachers.

    According to a recent report by the William Penn Foundation, many of Philadelphia's privately run pre-K facilities pay teachers wages of only $10 an hour. While the mayor has talked frequently about the additional jobs expanded pre-K would create in our city's poorest communities, he needs to ensure that these taxpayer-supported positions provide unionized family-sustaining wages for the primarily female and African-American teaching workforce. Kenney has long been a supporter of organized labor and the city's prevailing wage law, but his current approach violates the spirit of that commitment.

    Pay scales this low - some facilities pay teachers only the minimum wage - won't attract the highly qualified professionals these children deserve. We need early childhood specialists in front of classrooms who have the skills to put children on the path to academic success, not baby-sitters. As for privately run pre-K facilities that are currently succeeding, we should be working toward unionizing their teachers, as well. If we want to ensure that educators with a proven track record continue to remain in the classroom, we need to provide them with the financial stability to support their families.

    Beginning in 2013, the district began outsourcing thousands of pre-K seats to private providers. Billed as a cost-saving measure, it expanded the low-wage workforce the mayor is seeking to double down on. Kenney must reverse this disturbing trend and strengthen a workforce of properly paid and highly qualified district teachers.

    But before the mayor even pursues pre-K or other ambitious initiatives such as community schools, he needs first to tackle the district's long-running fiscal crisis head-on.

    What benefit will these new programs bring to children forced to attend kindergarten through 12th grade in schools that don't even have libraries? Not 1 cent of the nearly half-billion dollars in new spending the mayor is proposing is earmarked for rehiring recently laid-off teachers, nurses and counselors. It does nothing to restore art, advanced placement and extracurricular activities that have been cut. Even if we provide children with the best pre-K experience, we still won't see a benefit if they are forced to spend the following 13 years in underfunded and underresourced schools. We must address our schools' chronic budgetary shortfalls before discussing program expansion.

    In addition, I have concerns about the revenue source the mayor is relying on to fund these proposals. Instead of turning to tried and tested methods for securing funding, the mayor has embarked upon a risky strategy to tax sugar-sweetened beverages that could result in a protracted legal challenge. Even the mayor has acknowledged such a challenge is a "very real possibility," and Finance Director Rob Dubow has testified before City Council that this could delay implementation of the tax. If policy objectives such as universal pre-K are a priority - and I believe they should be - then the mayor should find a dependable source of revenue that can't be tied up for years in the courts or easily evaded.

    George Bezanis is a social studies teacher at Central High School and serves as the Philadelphia Federation of Teachers' representative at the school. He is a leader of the union's Caucus of Working Educators.

  • CBS Philly - May 4, 2016

    Philly Soda Tax At Forefront Of Health Department Budget Hearing

    There’s been a massive advertising effort both for and against the soda tax proposed for Philadelphia. But, in the end, it will be City Council that decides on it, and there was a glimpse into what members are considering at Tuesday’s Health Department budget hearing.

    Mayor Kenney has stressed the three-cents-an-ounce soda tax he’s requested is not a health measure, but Health Commissioner Thomas Farley says improved health will be an additional benefit.

    He appeared before the council to answer questions about the department’s budget, but much of the questioning revolved around the tax, with council members frequently coming back to the concern that the tax disproportionately impacts the poor. Farley says: not necessarily.

    “This is one tax that no consumer has to pay, everyone can choose to buy bottled water or drink tap water, which is free,” he said.

    Farley’s argument is that it’s soda itself that has a disproportionate impact because it is consumed more heavily in low-income communities and those communities have higher rates of obesity and diabetes.

    “Obesity and diabetes are much more common among people of low-income, and we think the sugary drink tax is going to preferentially benefit people of low-income because they’re going to be more likely to reduce their consumption of sugary drinks,” he said, though council members seemed to remain skeptical.

    Councilman David Oh asked if the soda tax proves insufficient to pay for the mayor’s agenda, “what’s next? Potato chips?”

    Council is weighing the tax amidst intense lobbying that is likely to heat up.

    Supporters of the tax are getting funding help from former New York mayor Michael Bloomberg. A spokesman says the six-figure donation– he wouldn’t give the exact amount– is meant to balance spending by the beverage industry, which he estimated at $2.5 million.

  • Philly.com - May 4,2016

    Letters: Gauge real impact of soda tax

    Gauge real impact on real people.

    The Harvard University study projecting major health benefits from Mayor Kenney's proposed tax on sugary drinks is a computer simulation based on assumptions about how people's behavior might change ("Study: From drinks tax, a healthier city," Thursday). There seemed to be no consideration of the likely results of demonizing a common and popular product.

    An actual study would look at the effect on the commerce of the city, including the impact on grocers large and small; the effect on employment; the likelihood that citizens would substitute other products for the heavily taxed sodas; and the possibility that those with cars would smuggle sodas. If the tax is high enough, I would expect an underground market to develop, creating a newly criminalized class.

    Instead of this 3-cents-an-ounce tax, why doesn't the city government assess taxes that are designed to do nothing more than raise revenue without trying to socially engineer behavior.

    |Charles Slater, Haverford

  • Philadelphia Business Journal - May 3, 2016

    Former New York Mayor Bloomberg backs pro-soda tax ad campaign in Philly

    Philadelphia's proposed sugary drinks tax again bubbled up for discussion today during a City Council budget hearing. Addressing the city's health commissioner, City Council President Darrell Clarke said he doesn't believe a tax on soda and other sugary drinks will generate enough money to support pre-K and other initiatives of the Kenney administration.

    Michael Bloomberg was a difference maker in the passage of Berkeley, California's sugary drinks tax, and now the former mayor of New York is aiming to do the same in Philadelphia.

    Bloomberg contributed to the advertising campaign set to be launched by Philadelphians for a Fair Future, a nonprofit that supports the 3 cents per ounce soda tax the Kenney administration is proposing, said Kevin Feeley, a spokesman for the organization.

    "We are just trying to balance the scales in terms of telling the other side of the story," explained Feeley, who said the campaign cost $825,000.

    The ad is set to launch Thursday with the bulk of the money put towards spots on television. Feeley said $150,000 of the total spending went towards radio and another $50,000 was used on digital ads.

    Earlier this month, reports showed the beverage industry is spending more than $1.5 million on ads lobbying against the mayor's budget proposal. The American Beverage Association, a national trade group, has rebranded the sugary drinks tax as a "grocery tax" and claimed it will cause job losses, although other economic experts deny those assertions.

    "We don't anticipate matching them dollar for dollar," said Feeley. "But the campaign ... will start spreading some of the facts and the benefits of the campaign as opposed to the misinformation the opponents are spreading."

    Kenney echoed the nonprofit's statement, saying: "It’s great to have the support of a nationally recognized businessman. I hope these ads will correct the misinformation the other side has already spent millions spreading.

    Details on the exact dollar amount Bloomberg contributed to the pro- soda tax campaign were not disclosed, although he was reportedly the biggest donor to support a similar measure in Berkeley in 2014, contributing $657,000.

    Philadelphians Against the Grocery Tax Coalition called out the out-of-towner and played up the rivalry between the two East Coast cities in a statement about Bloomberg's campaign contribution.

    "Bringing in a New Yorker to force his personal agenda on Philadelphia families is the latest desperate act from an administration that admits it is losing in its attempts to foist this regressive tax on our city," Anthony Campisi, a spokesman for the anti-soda tax group. "The people of New York rejected and resented Mayor Bloomberg's overreaching policies when he was mayor, and now he's trying to export them to Philadelphia families."

    Bloomberg was unsuccessful in his efforts to curb soda consumption in New York. With a focus on public health, he instituted a ban on oversized sodas, but the regulation was struck down after Bloomberg left office by the New York's Court of Appeals.

    The New Yorker than shifted his fight against sugar to Berkeley, where a 1 cent per ounce tax is now in place.

    Unlike in Berkeley and other cities around the country where a sugary drinks tax has failed – including twice in Philadelphia, Mayor Jim Kenney has taken a different approach.

    Instead of associating the tax to public health, a "sin tax," Kenney tied his proposal to the funding of quality pre-K programs in the city and the overhaul of libraries, recreation centers and other public park space.

    His strategy brought about interest from another New Yorker – the New York Times, which reported Kenney's strategy "could be a shrewd political choice in a city where district representatives want to show results in their community."

    This is the second time this month, a former New York politician put the spotlight on Philadelphia's proposed sugary drinks tax.

    Ahead of the Pennsylvania primary last Tuesday, Democratic front-runner Hillary Clinton said she backed Kenney's proposal. Her challenger, U.S. Senator Bernie Sanders, however, criticized the proposal and said it would disproportionately impact lower-income and middle-class families.

  • Newsworks - May 3, 2016

    Soda tax again draws heat from Philly City Council

    Philadelphia's proposed sugary drinks tax again bubbled up for discussion today during a City Council budget hearing. Addressing the city's health commissioner, City Council President Darrell Clarke said he doesn't believe a tax on soda and other sugary drinks will generate enough money to support pre-K and other initiatives of the Kenney administration.

    "If there are declining revenues, then we will ultimately get to the point where we will have to raise another tax to maintain particularly the level of service that you are proposing which is quite significant," Clarke said.

    Councilman Al Taubenberger says he's afraid people will travel outside the city to stock up on sugary drinks.

    "We don't live on an island," he said. "People will actually go to Delaware County, to Montgomery County, to Bucks County, to Gloucester County to Kent County in Delaware to avoid this."

    The debate continues with another round of public testimony later this week. City Council is expected to bring up the proposed tax before the end of June.

  • Philly.com - May 3, 2016

    Bloomberg joins the sugary-drink-tax campaign

    Former New York City Mayor Michael Bloomberg is backing a campaign to pass a sugary-drinks tax in Philadelphia.

    Bloomberg, who tried to ban over-sized sodas in New York as mayor, and provided millions of dollars to support successful soda-tax initiatives in Mexico and Berkeley, Calif., has contributed to the pro-tax nonprofit Philadelphians for a Fair Future, said the group's spokesman, Kevin Feeley.

    The nonprofit is launching a $825,000 ad campaign starting Thursday on behalf of Mayor Kenney's plan to enact a three-cents-per-ounce tax on sugary drinks.

    Feeley declined to say how much money Bloomberg has contributed.

    The ad campaign was also being supported with funds donated by the Action Now Initiative, a nonprofit focused on antiobesity and education issues funded by Houston billionaire couple John and Laura Arnold.

    "It's wonderful to have the support of a nationally respected business leader," Kenney said in a statement, referring to Bloomberg. "I'm hopeful these ads will correct the misinformation that the soda industry is spending millions to spread."

    Feeley said the money from Bloomberg and the Arnolds' nonprofit offers a chance to "balance the scales."

    "What it provides us is the ability to compete," he said. "We understand the reality of what's happening on the other side. The other side has almost unlimited financial resources."

    The American Beverage Association has already spent more than $2.5 million on an anti-soda tax advertising campaign, dubbing the levy on sugary drinks a "grocery tax."

    Feeley said the pro-tax ads to start this week are only a first step.

    "We're prepared to do more as we need to do more," Feeley said.

    The thirty-second spot features images of young children smiling in classrooms as a woman's voice says, “Philadelphia’s chance to help lift our children with city-wide Pre-K is now.”

    Bloomberg has been a leader in the anti-sugar crusade. His charitable foundation, Bloomberg Philanthropies, funded commercials in Berkeley that ran during the World Series. This time, Bloomberg himself - not his foundation - is putting up the money.

    Philadelphia's health commissioner, Thomas Farley, headed New York's health department under Bloomberg.

    The Arnolds, who made billions in energy trading, invested in the Berkeley pro-soda tax movement and poured millions into research supporting dietary recommendations on cutting sugar.

    While both the Arnolds and Bloomberg favor the health benefits of a soda tax, Kenney has largely pushed his proposal on the merits of what it would fund: pre-K for the city's 3- and 4-year-olds, community schools, and a bond to pay for park and recreation center upgrades.

  • Newsworks - May 3, 2016

    Push for sugary drinks tax in Philadelphia gets boost from Bloomberg

    An effort to pass a tax on soda and other sugary drinks in Philadelphia is getting a boost from Michael Bloomberg.

    The wealthy former mayor of New York City is chipping in for an ad campaign to promote the proposed 3-cents-per-ounce tax as a way to pay for early childhood education and other initiatives.

    Philadelphians for a Fair Future, the pro-tax nonprofit, will not disclose how much Bloomberg is giving to the effort, but said the total ad buy is worth $825,000. A second funding source is the Action Now Initiative, a nonprofit bankrolled by Texas philanthropists Laura and John Arnold.

    The commercial (which can be seen here) will run on broadcast television for at least the next three weeks starting Thursday. The campaign will also run radio ads.

    It's far less than the more than $2.6 million the soda industry has shelled out so far for ads against the tax, but there could be more cash coming.

    Bloomberg adviser Howard Wolfson said the former mayor is watching how the debate plays out here and that investing in Philadelphia's battle could have a bigger payoff.

    "I don't think there's any question that if Philadelphia passes the tax, it will have an impact on other places," Wolfson said. "And if Philadelphia goes ahead and does this, there will be other cities that wil be encouraged to initiate their own efforts at the local level."

    Bloomberg is credited with helping to pass a similar measure in Berkeley, California, after failing to ban large sodas in New York City while he was mayor.

    While Bloomberg's support for these measures is motivated by public health concerns — and not necessarily funding pre-K — Mayor Jim Kenney says his backing will help level the playing field.

    "We're up against 1-percenter billionaires who are willing to spend untold money to save their corporate profits," he said. "I welcome the help."

    Anthony Campisi, a spokesman for the industry-backed coalition fighting the tax, criticized Kenney for turning to wealthy "outsiders who are pursuing an ideology and trying to foist that ideology onto Philadelphia families."

    According to lobbying reports filed with the city's ethics board late Monday, the American Beverage Association — the industry trade group funding the opposition — spent more than $1.4 million fighting the tax through March 31. The majority went to radio and print ads, but that figure also includes about $20,000 in "direct spending" on firms Ceisler Media and Issue Advocacy, LLC and Hazzouri and Associates, which lobbied members of City Council and the mayor.

    The report does not reflect the association's more recent spending on TV ads, which began airing in April.

    Philadelphians for a Fair Future did not file a lobbying report for the first quarter because the group did not spend money at that time, said spokesman Kevin Feeley.

  • Philly Voice - May 3, 2016

    Michael Bloomberg to fund campaign for Philly soda tax

    Billionaire philanthropist and former New York City mayor Michael Bloomberg will reportedly provide financial support for the growing campaign to introduce a sugary-drinks tax in Philadelphia.

    Bloomberg, a staunch advocate for public health policy, will dedicate his vast resources to the nonprofit Philadelphians for a Fair Future, which supports Mayor Kenney's proposal to tax all beverages with added caloric sweeteners by 3 cents per ounce, according to The Philadelphia Inquirer.

    On Thursday, Philadelphians for a Fair Future will embark on an $825,000 ad campaign in support of the tax, which Mayor Kenney says will raise an additional $95 million in annual tax revenue to support a range of public initiatives, from universal pre-K and community schools to parks and library improvements.

    As mayor, Bloomberg fought for a New York City ban on the sale of sugary drinks larger than 16 ounces, a measure that bypassed City Council but was eventually shot down by the New York Court of Appeals. At the time, Bloomberg had imposed the ban by taking his proposal to the New York City health board, then led by Thomas Farley, who now serves as health commissioner in Philadelphia.

    City Council President Darrell Clark and Councilman Al Taubenberger both expressed skepticism about Kenney's proposal during a hearing Tuesday with Farley, according to Newsworks. They questioned whether declining soda revenues could sustainably fund quality pre-K in Philadelphia and suggested that many consumers would venture out to surrounding counties in order to avoid paying the tax.

    The American Beverage Association alone spent more than $238,000 to defeat a similar soda tax proposal from former Philadelphia Mayor Michael Nutter in 2012. This time around, according to the Inquirer, the ABA has already dumped $2.5 million into the campaign to stop Kenney's plan, labeling it a "grocery tax" in television ads that portray the policy as a direct burden on low-income communities.

    Philadelphia's soda tax debate has even drawn sharp lines in the 2016 Democratic presidential race, eliciting support from front-runner Hillary Clinton and criticism from Vermont Sen. Bernie Sanders, who called the proposal a "regressive" measure that will harm the city's poorest residents. Under Kenney's plan, 100-percent juice, milk and zero-calorie drinks would not be affected by the tax.

    Nationally, only Berkeley, California, has successfully passed a soda tax — at one penny per fluid ounce — after Bloomberg provided millions of dollars of support for the initiative. Mexico's national tax on soda, passed in 2014, led to a 12 percent decline in soda sales and a 12 percent increase in the price of soda, though it isn't yet clear what effect the policy has had on the country's public health.

    Anthony Campisi, a spokesman for the Philadelphians Against the Grocery Tax Coalition, issued in part the following statement in response to Bloomberg's support for the Philadelphia tax:

    "Mayor Bloomberg's ideology represents a slippery slope of government intrusion in our lives. What will he try to mandate on Philadelphians next? Will Flyers fans have to start donning Rangers jerseys? Will Citizens Bank Park switch out "High Hopes" for "New York, New York" during home games?"

    A protest by the anti-tax group has been scheduled for Wednesday afternoon at the northwest corner of City Hall.

    The total amount of Bloomberg's personal contributions to the pro-soda tax campaign has not been disclosed. His donations have been joined by funding from the nonprofit Action Now Initiative, an antiobesity and health education organization led by Houston billionaires John and Laura Arnold.

    Kevin Feely, who leads Philadelphians for a Fair Future, said the 30-second ad below will air on broadcast networks over the next three weeks.

  • Newsworks - May 3, 2016

    Soda tax again draws heat from Philly City Council

    Philadelphia's proposed sugary drinks tax again bubbled up for discussion today during a City Council budget hearing. Addressing the city's health commissioner, City Council President Darrell Clarke said he doesn't believe a tax on soda and other sugary drinks will generate enough money to support pre-K and other initiatives of the Kenney administration.

    "If there are declining revenues, then we will ultimately get to the point where we will have to raise another tax to maintain particularly the level of service that you are proposing which is quite significant," Clarke said.

    Councilman Al Taubenberger says he's afraid people will travel outside the city to stock up on sugary drinks.

    "We don't live on an island," he said. "People will actually go to Delaware County, to Montgomery County, to Bucks County, to Gloucester County to Kent County in Delaware to avoid this."

    The debate continues with another round of public testimony later this week. City Council is expected to bring up the proposed tax before the end of June.

  • Philly.com - May 1, 2016

    Why the soda tax won't raise the money pre-K requires

    One of the biggest issues facing Philadelphia is how to fund Mayor Kenney's goal of providing universal prekindergarten programs. The mayor has proposed taxing sugar-sweetened beverages (SSBs). Unfortunately, while the pre-K initiative is critical, the expected funding goals are not likely to be met.

    I support Kenney's universal pre-K initiative. I have been involved with this issue for nearly a decade as a board member of the Economy League of Greater Philadelphia. My "Random Economics" column on Oct. 8, 2014 - 18 months ago - argued that this program should be funded. I strongly believe in pre-K education. But once pre-K is started, it would be an educational disaster if it were not funded fully and correctly.

    And in a city that is perpetually fiscally stressed, choosing a revenue source that fails to provide the needed funds is not an option.

    Here is why I am worried that the mayor's revenue estimates will not be met.

    Start with the extent to which demand will drop as a result of the tax increase. Economists call the sensitivity to price changes the "elasticity of demand," and it is the most crucial aspect of the calculation. The mayor's team assumes an elasticity of -1, which simply means that for every 1 percent increase in price, there is a 1 percent decline in demand.

    The assumed elasticity is too low. The University of Connecticut's Rudd Center for Food Policy and Obesity tax calculator was used to estimate revenues. However, the Rudd Center calculator employs an elasticity of -1.21, which means that for every 1 percent the tax rises, demand falls not 1 percent but 1.21 percent, or 21 percent more. A recent paper that reviewed the literature calculated the average elasticity to be even higher, -1.29.

    By itself, this assumption of a -1 elasticity means the mayor's revenue estimates may be at least 20 percent too high. Unfortunately, the mayor's team gave no reason why the elasticity chosen was so low.

    It is likely that the sensitivity to the price changes will be closer to the Rudd Center number than the city's assumption for many reasons:

    The percentage increase

    in price was estimated by the city to be at least 55 percent. In most other cases, the tax resulted in a price rise in the 10 percent range. That is important, since the greater the price increase, the greater the reaction.

    Think of it this way: If, overnight, the price of gasoline rose from $2 to $2.20, you would get annoyed, but not cut back much. If it rose to $3.10, you would change your driving habits pretty quickly.

    With the 3 cents-an-ounce tax, the cost of beverages would increase anywhere from about 25 percent to as much as 200 percent. A 2-liter bottle that retails, on sale, for $1 would have a tax of more than $2. A 12-pack of 12-ounce cans that sells, on sale, for $2.50 would have a tax of $4.32. Roughly half of all sales are for 2-liter bottles and multipacks, and that is where the highest price increases occur.

    It is now generally accepted by all sides that the city's poor constitute the major market for SSBs. A large increase in price would create an even larger negative impact on demand in the poorest communities, as they cannot afford the increases. Advertising in those areas would decline because of the limited sales, further eroding demand.

    The relatively high percentage of demand by Philadelphia's poor was not factored into the calculations.

    The high tax would also affect the selling strategies of restaurants. Free refills would be uneconomical and would likely be terminated. Refills will likely be priced separately. Self-service soda fountains would have to stop dispensing SSBs as the volume and, therefore, costs would be uncontrollable. Those changes would lower demand more in Philadelphia than in other cases since it is the large price rise that would force those changes.

    There is a wide variety of available sugar-sweetened, naturally sweetened, and non-sugar-sweetened substitutes. The more the alternatives, the more you stop buying the product.

    The problems with the city's estimates don't end there. The mayor's economists assume the delinquency rate, which they currently put at 10 percent, would actually decline over time. That makes no sense when you consider that the sharp rise in price would encourage both legal and extralegal tax avoidance activities.

    Households living near the borders - and many do in this long, narrow city - would have another incentive to do more of their shopping outside Philadelphia. The purchase of one 12-pack of soda could more than make up for any added gasoline costs.

    Retailers, especially smaller ones, have similar incentives and capacity to purchase SSBs outside the city, avoiding the tax.

    Over time, alternative distribution systems will likely be developed that would shift sales outside Philadelphia unless there are significant enforcement activities. Will the city create a SSB Enforcement Bureau? Really? The avoidance rate is likely to rise over time, reducing revenues, potentially significantly.

    And for me, there is one more and very disturbing part of the story. The city is assuming it is an island country that can place a tariff on imported products. The only way this tax works is if both wholesale and retail purchases made outside Philadelphia, in foreign lands, such as Bucks County, Delaware, or New Jersey, from foreign companies located in these foreign lands, can be taxed once the goods enter the city. Otherwise, everyone buys from sellers outside Philadelphia.

    That attitude toward taxation is troublesome and even bizarre. If this taxing strategy holds for SSBs, can it be imposed on other products? What message about tax policy will the city be sending to firms looking to locate here? Image and tax strategy matter when it comes to economic development, and this is quite a worrisome message.

    Universal pre-K education should be implemented. But for all the reasons described, a tax on sugar-sweetened beverages is not likely to come close to generating the necessary revenues required to fully fund the program.

  • Philadelphia Inquirer - April 27, 2016

    Letters: Don't let poor shoulder soda-tax burden

    AFTER READING the recent commentary by Marc Steir on on the proposed tax on sugary drinks, I wasn't only incensed by it but deeply resented it.

    Like many who sit in think tanks and see the deprivations of distressed communities from afar, Steir seems to think that because the 3-cents-per-ounce tax on sugar-sweetened beverages will benefit the poor, they should be willing to pay for it.

    He crossed a serious social line when he wrote that.

    Low-income people, many of whom live in food deserts, who don't always have access to quality pre-Kindergarten programs should welcome higher grocery bills with open arms?

    Children in low-income families will benefit by being prepared to enter school. The restoration of libraries and parks is even more necessary in distressed communities. But don't speak of correcting the ills of our city by adding financial burdens on the backs of those who suffer from economic injustice.

    Pastor Dayna DeVine
    Speak Life International Ministry

  • NY Post - April 26, 2016

    Democrats no longer care that their soda tax hits the poor hardest

    When Hillary Clinton and Bernie Sanders argued about soda taxes last week, neither of them mentioned obesity.

    That striking omission reflects a shift in tactics by advocates of a special levy on sugar-sweetened drinks who have started emphasizing the good that can be done with the resulting revenue instead of the evil that can be prevented by encouraging people to consume fewer calories.

    During a visit to Philadelphia, Clinton said she was “very supportive” of Mayor Jim Kenney’s plan to pay for public preschool with a 3-cent-per-ounce tax on sugar-sweetened drinks. “We need universal preschool,” she said, and “that’s a way to do it.” Sanders, Clinton’s rival for the Democratic presidential nomination, criticized her for supporting a tax that hits the poor especially hard.

    Sanders is right that a soda tax is highly regressive. Poor people are more likely than rich people to drink regular soda, and even if that weren’t true the money they spend on soda (including any applicable taxes) would represent a bigger share of their income.

    ShopRite in Philadelphia is currently selling three 12-packs of 12-ounce Coca-Cola cans for $12. Kenney’s levy, if passed through to consumers, would more than double that price — obviously a bigger burden for poor and middle-class shoppers than it is for the wealthy.

    Kenney, who as a city councilman led the fight against a 2-cent-per-ounce soda tax proposed by his predecessor, Michael Nutter, alluded to the regressive nature of the levy he now supports in his budget address last month.

    “The line that really got me four years ago was the claim that this tax would hurt low-income, minority communities,” he said. “But the truth is that soda companies are the ones actually targeting their advertising at low-income, minority communities.”

    Kenney seemed to be implying that poor people of color buy soda only because they blindly do what billboards tell them to do, meaning the city would be doing them a favor by using taxes to discourage those purchases. Yet he also suggested that the new tax would come from the “incredible profit margins” of “large soda companies and wealthy distributors” rather than the pockets of poor people.

    Last week he called it a “corporate tax,” declaring that “it is immoral and completely hypocritical for these vested corporate interests to pass this tax on to the very people they have profited from for decades.”

    Kenney seems to have forgotten that the whole rationale for taxing soda is to discourage consumption of an unhealthy product by raising its price. When researchers try to figure out whether the soda taxes imposed by Mexico or Berkeley are working as intended, the first thing they look for is higher soda prices. If the taxes aren’t passed on to consumers, these levies cannot possibly do what they’re supposed to do.

    Even if prices of sugary beverages go up, and even if consumers respond by drinking less of them, that change doesn’t necessarily lead to a reduction in total caloric intake, let alone one big enough to have a noticeable impact on obesity.

    By eschewing the usual paternalistic justification for soda taxes, Kenney avoids such sticky questions as well as the resentment that comes from trying to steer people’s dietary choices.

    Kenney’s strategy is logically suspect, since his claim that his tax won’t affect prices makes you wonder why he decided to tax these products in particular. Yet playing down the “public health” rationale for soda taxes seems to be working.

    In 2010 The Philadelphia Inquirer opposed Nutter’s “hefty tax on sugary drinks,” saying it was “regressive” and “will not have the desired impact” on obesity. But the paper’s editorial board likes Kenney’s even heftier tax on sugary drinks because Kenney has “refrained from overselling the uncertain public-health benefits.”

    When The New York Times asked Kenney about the public-health benefits of his soda tax last month, he dodged the question. “There’s really serious health benefits in pre-K,” he replied.

  • Daily Caller - April 26, 2016

    Wealthy NYTimes Columnist Agrees With Clinton: Poor People Should Pay More For Soda

    Liberal economist and Hillary Clinton supporter Paul Krugman has taken sides in the battle over soda taxes between Clinton and Sen. Bernie Sanders.

    After Clinton voiced her support for the mayor of Philadelphia’s plan to slap a three cents tax on per ounce of soda, Sanders hit back, saying such a tax would hit the poor hardest.

    Krugman came to Clinton’s defense in his New York Times column. “It does seem worth pointing out that progressivity of taxes is not the most important thing, even when your concern is inequality,” writes Krugman.

    “If we add in the reality that heavy soda consumption really is destructive, with the consequences falling most heavily on low-income children, I’d say that Sanders is very much on the wrong side here. In fact, I very much doubt that he’d be raising the issue at all if he weren’t still hoping to pull off some kind of political Hail Mary pass.”

    Krugman concedes that poorer people will pay a greater share of their income to buy soda than rich people, which is apparently worth it since poor people are the most vulnerable to evil soda companies.

    According to a research note from the free-market think tank the Institute of Economic Affairs (IEA), Sanders is right on the money when it comes to whose pocket books are most impacted by a soda tax. (RELATED: Bernie Sanders Is Right, Soda Taxes Hit The Poor Hardest)

    Both real-world evidence and economic theory make a mockery of the notion that taxes suffice to substantially tackle obesity, says the IEA’s head of lifestyle economics, Christopher Snowdon.

    One of the key reasons soda taxes don’t work is the demand for sugar-filled drinks and fatty foods tend to be inelastic – meaning people continue to buy the products in large amounts despite the higher price.

    Even if people were to change their behavior in response to higher taxes, consumers will often just switch to cheaper brands or buy their groceries from cheaper shops. “This leads to the consumption of inferior goods rather than the consumption of fewer calories,” says Snowdon.

    The IEA points to the example of Denmark’s so-called “fat tax,” which was introduced in October 2011. The tax proved so ineffective, with people switching to cheaper brands or buying the products they preferred from across the border, that it was repealed in January 2013. The tax was also hugely unpopular. (RELATED: Hitting The Poor, Why Sugar And Soda Taxes ‘Defy Basic Economics’)

    A tricky problem for politicians hoping to introduce similar taxes in the US is the poor spend a greater share of their income on the bare necessities, any taxes targeting these goods will have a disproportionate impact on the poor.

    The IEA’s previous work on “sin taxes” shows the poorest 20 percent of UK households spend roughly $2,000 per year on sin taxes, amounting to around 11.4 percent of their disposable income.

    Leaving aside the harm done to the pockets of the poor, sugar taxes may not even have an impact on people’s health. “No impact on obesity or health outcomes has ever been found,” Snowdon writes. “Early evidence from Mexico suggests that a ten percent tax on sugary drinks led to an average daily decline in consumption of 36ml per person.”

    “As Tom Sanders, a professor of nutrition and dietetics, notes, this is the equivalent of 16 calories and is ‘a drop in the caloric ocean. Long-term reductions in total energy in the range of 300-500 kcal/d are probably needed to prevent obesity.’”

    Snowdon concludes by citing a systematic review of 880 studies that found “the public health case for using economic instruments to promote dietary and physical activity behavior change may be less compelling than some proponents have claimed.”

  • Statement by Former Philadelphia Fire Commissioner Harold Hairston.

    I served as Philadelphia’s Fire Commissioner for over a decade. I understand the need to make tough budget decisions. But the Mayor’s proposal to impose a 3-cents per ounce tax on beverages is discriminatory – unfairly targeting one industry and one group of Philadelphians. The administration is failing to consider how this tax will burden the communities it is claiming to help.

    Wealthier Philadelphians can easily find ways to circumvent this tax. They will head to the suburbs for their weekly shopping trips – but the same opportunity is not afforded to people without cars who must shop at bodegas or grocery stores in walking distance. It is unfair to place the burden of funding government expansion on the backs of those already struggling to make ends meet.

    Harold Hairston
    Harold Hairston served as Philadelphia’s Fire Commissioner from 1992 through 2004.

  • Politifact - April 25, 2016

    Fact-checking Bernie Sanders’ claim that Jim Kenney’s soda tax is regressive

    Jim Kenney’s proposed soda tax went national last week.

    Hillary Clinton led off what became a back-and-forth political battle by voicing her support for the tax at a forum in Philadelphia. Bernie Sanders chimed in later to call the tax regressive.

    Kenney fired back in an editorial on Huffington Post that his proposal, which would levy a three cent per ounce tax on distributors, was a "corporate tax" and said Sanders was siding with beverage corporations. Then Sanders responded with an editorial of his own, in Philly Mag. He basically gave an elongated version of what he said earlier in the week, which was, "A tax on soda and juice drinks would disproportionately increase taxes on low-income families in Philadelphia."

    Is Sanders correct? Or was this political grandstanding?

    Berkeley, Calif., remains the lone American city to enact a sugary drink tax. It taxes the distributors of sodas and similar beverages like sports drinks .01 cent per ounce. Studies have shown some of the cost of tax has been passed on to consumers. A Cornell study found about 25 percent of it was passed on, and a University of California-Berkeley study found the amount to be between about 50 to 70 percent, depending on the type of beverage. The prices of soft drinks were more likely to go up at supermarkets than chain drug stores.

    Carl Davis, the research director at the Institute on Taxation and Economic Policy, told Billy Penn last month soda taxes like the one proposed by Philadelphia are "imperfect:" "The first thing you realize is that it is regressive. It’s going to hit lower and more moderate income families more heavily than higher-income families."

    William Shughart, a Utah State University professor and sin tax expert, explained taxes like the one proposed by Kenney disproportionately affect lower income residents because a greater amount of their income is used on food and drinks.

    Warren Gunnels, senior policy advisor for Sanders, said in an email, "It would make much more sense to finance universal pre-school in Philadelphia by raising taxes on its wealthiest residents, who currently benefit from flat state and city tax rates. Right now wealthy Philadelphians pay state income tax of 3.07 percent, an unemployment tax of 0.07 percent, and a city income tax of 3.92 percent. That’s a total state and local tax burden of 7.06 percent. By contrast, New York City’s wealthiest residents pay a top rate of 12.6 percent."

    Such a plan would be easier said than done, according to Kenney’s administration. "Because of the uniformity clause, it’s constitutionally impermissible right now in Pennsylvania to raise the income tax rate only for wealthy individuals," said Lauren Hitt, Kenney’s communications director. "The Republican controlled state legislature would have to change the constitution and we’re not holding our breath on that one. Our kids need Pre-K now."

    Kenney has said the tax is not regressive because he believes the money will stay in the neighborhoods. His finance director, Rob Dubow, said most consumers of sugary drinks are in poor neighborhoods. When Dubow suggested distributors would absorb some of the tax, City Council president Darrell Clarke responded, "Fundamentally, I don’t believe that."

    Our ruling

    Sanders said Kenney’s proposed soda tax would disproportionately increase taxes for low income families. In the only other instance of a soda tax in the United States, studies have shown somewhere between 25 and 70 percent of the cost of the tax gets passed to consumers. Tax experts say if this tax reaches the consumer level it would affect low income residents to a greater extent.

    We rule the claim True.

  • Citified- April 24, 2016

    Bernie Sanders Op-Ed: A Soda Tax Would Hurt Philly’s Low-Income Families

    I applaud Philadelphia Mayor Jim Kenney for introducing a plan to provide universal preschool for all of his city’s 4-year olds. I strongly share the goal of ensuring that every family has access to high-quality, affordable preschool and childcare.

    But I do not support Mayor Kenney’s plan to pay for this program with a regressive grocery tax that would disproportionately affect low-income and middle-class Americans.

    I was especially surprised to hear Hillary Clinton say that she is “very supportive” of this proposal. Secretary Clinton has vowed not to raises taxes on anyone making less than $250,000 per year. For reasons that are not clear, she has chosen to abandon her pledge by embracing a tax that targets the poor and the middle class while going easy on the wealthy. That approach is wrong for Philadelphia, and wrong for the country.

    Mayor Kenney wants to raise$400 million from a tax on juice boxes, soft drinks, teas, flavored coffee and other sweetened drinks. His proposal would raise the price of a $1.00 soft drink to $1.24. That will hit many Philadelphians hard, especially the more than 185,000 people in the city who are trying to scrape by on less than $12,000 a year. He twice opposed the same tax idea. He was right then. He’s wrong now.

    It would make much more sense to finance universal preschool in Philadelphia by raising taxes on its wealthiest residents who currently benefit from flat state and city tax rates. What’s more, national tax rates for wealthy Americans and corporations are much lower than they were under President Ronald Reagan. For example, the Commerce Department and other data found that corporations paid an effective tax of 31.7 percent on average during the Reagan years, but only 22.8 percent on average under President Barack Obama.

    That means more than $166 billion per year in revenue has been lost because of the influence of corporate lobbyists and campaign contributions. Not only could that money be used to make sure that every 4-year old in this country had access to a high-quality preschool, it could also provide the resources necessary to provide universal child care and preschool to every infant and toddler in America with billions to spare for other urgently needed programs.

    Mayor Kenney deserves praise for emphasizing the importance of universal pre-kindergarten. But at a time of massive income and wealth inequality, it should be the people on top who see an increase in their taxes, not low-income and working people.

  • NBC Philadelphia - April 22, 2016

    Sanders Not a Fan of Philly Soda Tax Proposal

    Bernie Sanders, the Democratic presidential hopeful, stopped in Montgomery County Thursday night to rally support for his campaign. We asked him about Philadelphia Mayor Jim Kenney's proposed soda tax which would pay for universal Pre-K and parks and recreation. Sanders is not a fan.

  • Citified- April 22, 2016

    Bernie Sanders Says Kenney’s Soda Tax Is “Regressive”

    Overnight, Mayor Jim Kenney’s proposed soda tax has inexplicably become a presidential issue.

    On Wednesday, former Secretary of State Hillary Clinton came out in support of the tax as a way to fund expanded pre-K. Now, Vermont Sen. Bernie Sanders is weighing in. He announced on Thursday that he is opposed to the tax.

    “Making sure that every family has high quality, affordable pre-school and childcare is a vision that I strongly share,” he said in a statement. “On the other hand, I do not support paying for this proposal through a regressive tax on soda and juice drinks that will significantly increase taxes on low-income and middle class Americans.”

    Sanders claims that Clinton has broken a campaign promise by backing the tax.

    “Frankly, I am very surprised that Secretary Clinton would support this regressive tax after pledging not to raise taxes on anyone making less than $250,000. This proposal clearly violates her pledge,” he said. “A tax on soda and juice drinks would disproportionately increase taxes on low-income families in Philadelphia.”

    Is this all just political? That’s certainly what the beverage lobby argued yesterday when Clinton threw her weight behind the soda tax. Back in February, Kenney, who ran a progressive mayoral campaign very much in the Sanders vein, endorsed Clinton for president. And Pennsylvania’s primary is Tuesday.

    Kenney wants to create a 3-cents-per-ounce soda tax in order to fund expanded pre-K, community schools, an overhaul of parks and recreation centers, and other initiatives.

  • Coalition Statement on Bernie Sanders comments regarding tax on beverages

    “We appreciate Senator Sanders standing up for the hard-working Philadelphia families who would be harmed by this destructive tax. Pre-K is a worthy program but a regressive tax borne most heavily by low-income and middle class Philadelphians is not the right way to pay for it. The fact is we can protect the future of our children and not harm these families in the process with more burdensome taxes. It’s disappointing that Secretary Clinton chose to play old-school politics rather than take into account the full impact of this local issue.”

    “We urge both candidates to call upon the administration to redirect existing federal funds for early education to Philadelphia to support the proposed initiative and, if elected president, to commit they will send these federal funds to the city to support Pre-K for the future.”

  • New coalition formed to fight regressive Philadelphia tax proposal

    Philadelphians Against the Grocery Tax, a broad-based coalition made up of more than 10,500 members including local businesses and individual Philadelphians, has formed to urge City Council to reject a regressive 3-cent-per ounce grocery tax. If passed, the tax would cause many everyday grocery items like juice drinks, teas, sodas, sports drinks and fountain sodas to double in cost.

    The coalition members represent over 500 businesses including corner stores, grocery stores, bodegas, movie theaters and restaurants across Philadelphia. The coalition also includes thousands of working Philadelphians from all across the city. All of them are united in their opposition to a tax proposal that would fall hardest on small family-owned businesses, working families and our poorest communities.

    The Philadelphians Against the Grocery Tax Coalition is dedicated to educating Philadelphians about the discriminatory proposal which would impact more than 1,000 beverages found on families’ grocery lists. They know that this will cause the grocery bills of ordinary families to skyrocket and drive business out of the city, putting family-sustaining jobs at risk.

    “Thousands of Philadelphians and small businesses across our city have already joined our coalition because they realize that this tax will hurt families,” said Ricardeau Scutt, Chairman of the No Philly Grocery Tax Coalition and owner of a Saladworks in the Andorra neighborhood. “I agreed to serve as chairman for our coalition because costs for my restaurant would skyrocket if this tax is approved. There’s no question that we would lose customers and be forced to lay off employees.”

    “This tax will hurt small grocery stores like mine, which operate on thin margins and are community anchors,” added Dany Vinas, owner of C-Town Supermarket in North Philadelphia. “This tax will put my family-owned business at risk. We need support from the city, not another tax.”

    Atif Bostic, executive director of UpLift Solutions, a non-profit organization that brings retail grocers into low-income neighborhoods, said this tax would impact Philadelphia’s poorest communities the most and discourage grocery stores from opening in food deserts across the city.

    “This tax proposal is unfair not just to neighborhood businesses but to our poorest communities,” Bostic said. “The administration has admitted that this tax would fall disproportionately on low-income families. This proposal would make it more difficult to improve access to groceries to our poorest neighborhoods because it would substantially increase the cost of doing business for everything from the neighborhood corner store to the large supermarket.”

    If this unfair tax proposal is approved, the tax on a common 2-liter priced at $1.79 would be $2.04, more than the cost of the product. Right now a 20-can family pack costs $5.99, but tack on a new $7.20 tax and the price would rise to $13.19.

    “Shoppers won’t be able to afford the higher prices grocery stores will be forced to charge for these items,” said Dave McCorkle, president and CEO of the Pennsylvania Food Merchants Association, which represents 3,200 retail food stores employing more than 150,000 workers across the Commonwealth. “We expect families to flee over the county line and shift their shopping to the suburbs to escape these prices. A gallon of iced tea that costs $2.88 today would cost $6.72 with this tax. This tax will be passed directly onto the consumer.”

    Along with the 3-cents-per-ounce tax on sugar-sweetened drinks sold at grocery stores, fountain beverages would be taxed at 4.5-cents per ounce. This means it would be even more expensive to eat at many local restaurants, attend sporting events or even visit the local movie theater.

    “As the owners of a small family business that has been in Philadelphia for 95 years, I feel compelled to speak out in opposition to the proposed 3-cents-per-ounce tax on soda and other sugary drinks,” said Anne McNally, owner of H&J McNally’s Tavern in Chestnut Hill. “Should this tax be passed, it will reduce choices for Philadelphians and hurt businesses like ours.” “Most of the proceeds from our ticket sales go straight to the big movie studios in Hollywood,” added Bradley Miller, managing director for the Pearl Theatre at Avenue North. “We rely on concessions to stay open and provide one of the poorest sections of the city affordable entertainment. This tax threatens the survival of our business because it will drive people away from the movies or cause them to sneak drinks in. We are imploring City Council to reject this tax and find other ways to raise money for the proposed initiatives. Our businesses will be unable to absorb such an enormous price increase.”

    Worse, as the tax drives down sales like the city predicts, there will be less money to pay for the programs it’s intended to fund, making it an unreliable and unsustainable source of revenue. In the end Philadelphians will likely be left with higher grocery bills but without the programs they have been promised.

    A similar coalition successfully fought off an effort to impose a similar tax on Philadelphia families five years ago. The number of coalition members is expected to rise in the coming weeks as more and more people learn about this unfair tax proposal.

    Philadelphians Against the Grocery Tax is a broad coalition of concerned citizens, businesses owners, movie theaters, and community organizations actively opposing the city’s proposed new grocery taxes. To learn more about the Philadelphians Against the Grocery Tax coalition, visit www.NoPhillyGroceryTax.com.

  • Philadelphia Inquirer - April 15, 2016

    Letters: With soda tax, moviegoers and theaters will pay the price

    Moviegoers, theaters will pay the price

    As the head of an independent movie theater serving low-income neighborhoods in North Philadelphia, I can say that the pro-tax coalition demonstrated a lack of understanding of our industry when its spokesman said we will be able to absorb the mayor's proposed tax on sugary beverages ("Theaters run ads against tax plan," Tuesday).

    Most of our ticket revenue goes to Hollywood studios. We rely on concessions to stay open and would be forced to pass on a 3-cents-an-ounce tax to our customers. That would cause them to decrease consumption or sneak beverages in, hurting our bottom line.

    Movie theaters already pay five taxes to Philadelphia. This proposal might put us out of business.

  • 6ABC - April 14, 2016

    VIDEO: Will Philadelphians bear burden of sugary drink tax?

    Philadelphia City Council held its first hearing this week on Mayor Jim Kenney's proposed soda tax, and the 2nd hearing will come next month.

    So how will the sugary drink tax play out for Philadelphia consumers?

    Critics who have already produced TV spots say the 3 cent an ounce wholesale tax will be passed through to shoppers, penny for penny, dollar for dollar.

    "A gallon of Turkey Hill Green Tea Sweetened current price $2.88, after the tax $6.72," said David McCorkle, Pennsylvania Food Merchants Association.

    But the mayor who wants the tax to help fund expanded Pre-K classes said Thursday he doubted there would be that kind of retail price hike.

    "I don't think they are going to do that," said Kenney.

    Kenney believes the tax will be diluted or blended first at the wholesale level.

    "Same thing in a supermarket. If you have the ability to blend that increased tax though all of your products, it's minuscule," said Kenney.

    The mayor said he believes the increased costs will be spread over thousands of retail items.

    But McCorkle, the head of the Pennsylvania Food Merchants Association, is emphatic.

    "This tax will be passed through directly to the consumer we believe, and I think the mayor knows that," said McCorkle.

    McCorkle predicts the tax could bring job losses to Philadelphia food retailers.

    He tells us he thinks consumers will cross the border to avoid a $4.15 tax hike on a gallon of lemonade.

    Patricia Pratt of Northeast Philadelphia says she would go to Bensalem to escape the tax.

    The tax targets only sugary drinks, not high-fat foods.

    "People say why didn't you tax donuts?" said Kenney. "Because this is a more predictable way of attacking this issue, a more predictable way of collecting the tax."

    City Council is expected to hold hearings on the controversial measure May 11.

  • Newsworks - April 13, 2016

    Soda tax supporters, opponents pack Philly City Council budget hearing

    Members of Philadelphia City Council heard from people on both sides of the sugary drinks tax debate at a community budget hearing Tuesday night.

    While Mayor Jim Kenney's proposed budget is more than 200 pages long, it was clear from the parking lot what people came to talk about: his proposal for a 3-cents-per-ounce tax on soda and other sugary drinks to fund universal pre-K, community schools and an overhaul of city parks, recreation centers and libraries.

    Members of the "No Philly Grocery Tax Coalition" — sponsored by the American Beverage Association — greeted every car, handing out fliers and asking drivers to sign petitions. Members of Teamsters Local 830, which represents about 2,000 people who work in bottling plants or drive beverage delivery trucks, held up large banners outside the entrance.

    Inside, more than 200 people packed into a large room at Concilio, a social-service agency in the Hunting Park section of North Philadelphia. That included many members of Philadelphians for a Fair Future, the coalition supporting the tax who also gave out fliers and took petition signatures.

    While the room was filled with adults, several children held up hand-written signs. Fifteen-year-old Shannon Smith's sign read "Neighborhoods first." On the other side of the room, 9-year-old Delmaro King held up a poster reading "No Philly grocery tax." Delmaro's father, Louis Rodriguez, is a member of Teamsters Local 830 and works for a local Coca-Cola bottling plant.

    Those in favor of the tax acknowledged the potential impact the tax could have on soda industry jobs — the tax could decrease consumption by at least 55 percent in Philadelphia — while promoting the benefits of the projects that would be funded by the revenue stream.

    "We really need to choose what is going to be beneficial to us in the long run," said Obioma Martin, who owns a company that trains early childhood educators. "Are we thinking about more criminals or are we thinking about an educated workforce?"

    Those opposing the tax spoke about the impact on jobs, as well as the effect rising sugary drinks prices could have on working families, echoing TV and radio ads from the American Beverage Association.

    Coca-Cola employee Norman Shoemaker said he supports the pre-K plan, "but not on the expense of the beverage company. We cannot afford that. If you want to help the kids, we have to first start helping the parents because it is about the parents that take care of the kids."

    Philadelphia City Council is expected to vote on the tax in June and plans to hold at least one more community budget hearing on May 3, but the location has not yet been announced.

  • NBC Philadelphia - April 13, 2016

    Debate Continues Over Philly Soda Tax

    A meeting was held Tuesday night as the debate continues over the proposed Philadelphia soda tax. NBC10's Aundrea Cline-Thomas has the details.

  • Philly.com - April 12, 2016

    Coming to a theater near you: Anti-drink-tax-ads

    Moviegoers settling in to see Batman v Superman at Columbus Boulevard's United Artists Riverview Plaza Stadium 17 theater over the weekend got an argument on the sugary-beverage tax before the trailers ran.

    Theaters around the city are playing antitax commercials free of charge, as part of an effort to defeat Mayor Kenney's proposed three-cents-per-ounce tax.

    The tax would be levied on distributors, but theater owners say moviegoers could expect to see the increase tacked onto the cost of already-pricey fountain drinks. If so, they say, a 24-ounce soda might rise 72 cents in price.

    On Monday, Gina DiSanto, president of the National Association of Theater Owners of Pennsylvania, said cinemas would voluntarily air the ads, created by the No Philly Grocery Tax coalition and paid for by the American Beverage Association. So far, 10 theaters around the city have agreed to show the ads.

    The ABA has already spent $1.5 million to run ads on radio and TV.

    "We know that thousands of people from all corners of the city would have to pay more to see their favorite films because of this tax," DiSanto said. "This tax will hit moviegoers from Old City art houses to North Philadelphia megaplexes, and will prevent families from spending quality time together doing something they love."

    Print ads are also popping up in grocery stores around the city. At the Port Richmond Thriftway on Aramingo Avenue, a sign on a cart filled with sugary drinks this weekend read, "The taxes on products in this cart alone would add $34.10 to your grocery bill."

    Advocates say the tax is the fairest way to fund universal pre-K and community schools, and help pay for a bond to invest in parks and libraries.

    "The soda industry makes billions of dollars in profits every year, much of it on the backs of the very people it now claims to be defending," said Kevin Feeley, spokesman for the pro-tax coalition, Philadelphians for a Fair Future.

    "What's more, the industry has the choice to pass on the tax to consumers, or it can choose to redirect a small portion of its annual profits toward the tax. Either way, the sugary-drinks tax is the fairest way to pay for investments aimed at the city's toughest challenges: fighting poverty, improving public schools, and helping our struggling neighborhoods."

    Feeley said theaters could afford to absorb the tax, given the markup on concessions. In 2014, Regal Entertainment Group, which includes United Artists theaters, and AMC Theatres, which operates the multiplex at Philadelphia Mills, got nearly 30 percent of their revenue from concessions, according to a Business Insider study.

    On average, the two chains saw an 80 percent profit margin on sodas and snacks.

    Movie theaters use concessions to make up for declining ticket sales, the study said, and to prevent ticket prices from getting even higher.

  • NBC Philadelphia - April 11, 2016

  • Philly.com - April 10, 2016

    Commentary: Mayor's soda tax is a big gulp of folly

    Joe DeFelice is chairman of the Philadelphia Republican City Committee

    Jim Kenney, our new mayor, has hitched his political wagon to a grocery tax that is three times that of the only other one imposed in the United States - in überliberal Berkeley, Calif.

    The 3-cents-an-ounce tax would fall most heavily on the working poor, who spend the largest portion of their incomes on groceries. That much was admitted recently by Rob Dubow, the mayor's finance director, during questioning by City Council.

    The regressive nature of the tax is not the only reason to oppose it. It would also be another burden for businesses in a city where too many are without a job. It would make nonalcoholic beverages competitive with liquor or beer in terms of price. Most damning, the proposal relies on flimsy math to fund another entitlement in a city that can't afford the ones it already has.

    The grocery tax - which, yes, would cover juice boxes for your kids, sports drinks at the game, and that Turkey Hill iced tea we love in the summer - would hurt already-strained manufacturers like Coca-Cola in Juniata and PepsiCo in the Northeast.

    People who have the time and means to travel across state or county lines will do so, along with their tax dollars. But the poorest, most financially overstretched Philadelphians will end up paying more for a case of soda than they would for a 30-pack of Miller Lite.

    And those mom-and-pop stores in our poorest neighborhoods, which are sometimes the only purveyors of fresh food? They'll be hurt too. It's a stunning act of hypocrisy to witness those same people who lecture us about food deserts then turn around and implement policies that will cause food sellers to go belly-up.

    And speaking of those poorest Philadelphians, when did it become the job of the government to deprive a working mom, already juggling two or three jobs, of the comfort of a can of soda when she walks through the door? But that attitude is typical of the scolds who run the Democratic Party, whether it's banning certain kinds of lightbulbs or plastic bags at the checkout line.

    If a behavior is deemed "bad" by the party bosses or their donors, it's no longer allowed - consumers be damned.

    There's no reason to believe this tax won't be followed by more overreach. Why not a tax on Tastykakes and french fries? How about a tax on driving? The mayor relies on the invented moniker "Big Soda" to suggest that opponents of this tax are evil. But does anybody really think that so-called Big Soda is as great a threat to our lives as is Big Government?

    The worst part of the mayor's plan is that his stated aim of funding universal pre-K and the unstated goal of reducing unhealthy behavior are in direct contradiction.

    If the tax that seeks to fund this new entitlement also inherently reduces the behavior from which it draws its revenue, where does that leave Philly schoolchildren as the revenue numbers go down every year?

    Even the Kenney administration's own projections suggest that, with this tax, Philadelphians would immediately shift their behavior and buy fewer beverages in the city. If people drink less because it's more expensive to do so - a basic fundamental of economics - then who or what is going to fund our schools and rec centers when the well runs dry?

    If the mayor were really serious about supporting Philly's schoolchildren and handling our city's looming fiscal crisis, he could begin by slashing the size of his own administration, which is already 45 percent larger than his predecessor's and 40 percent more costly. He could promote a serious discussion about parent choice in schooling, rewarding our best teachers with merit pay, and ending the system of patronage politics that costs our city millions a year. Philadelphians understand there's fat to be cut - and not just in relation to a grocery tax.

    Finally, to fix our crumbling rec centers, city Republicans have an idea for the mayor:

    Let those same companies that clambered to fund our shining stadiums in South Philly - who the mayor decries as Big Marketers - sponsor and brand our rec centers and the athletes that compete in them.

    Unlike the bureaucrats in City Hall, these companies actually have a vested interest in giving back to our communities because they draw their customers and their labor pool from among us. Athletics can often be a route out of poverty for some of our poorest children, who are subjected to Third World schooling courtesy of decades of entrenched Democratic rule. Therefore, our rec centers, which provide services to our most needy, should not be eliminated from the kind of sponsorship opportunities that made our finest stadiums viable in the first place.

    The city should be open to private-public partnerships to improve the assets we've already got, making for a freer and more prosperous city - all at zero cost to the taxpayer. Then the citizens of Philadelphia would know who is the better force in our lives.

    Big Soda over Big Government.

  • Inside Story - April 10, 2016

  • Philadelphia Public Record - April 7, 2016

    OUR OPINION: Kenney’s Odd Game On Sugary-Drinks Tax

    One wonders why Mayor Jim Kenney, who as a Councilman voted no on similar proposals from Mayor Michael Nutter, would press hard for a sugary-drink tax.

    He made it clear in his welcoming speech to the Pennsylvania AFL-CIO Convention delegates in Philadelphia Tuesday morning. The city’s plight is a poor population whose children have limited work choices, he said. They lack schooling and training; many fall by the wayside and often into prison.

    He made it clear why he needs to fund pre-K education fully in this City. No one disagrees. What some object to is his choice of a funding source for that educational need.

    As public debate about Mayor Jim Kenney’s proposed 3 cents per ounce on sugar-sweetened beverages continues, there needs to be clarity about how this tax will affect jobs and poor communities.

    The beverage industry plays an important role in the city’s economy. It provides over 1,200 well-paying jobs. Isn’t it time that public policy in Philadelphia is formed by deep thinking and sound ideas rather than previous failures for such a proposal?

    The soft-drink beverage and beer distributors, who employ almost 300 people, will feel the immediate impact of the tax. They will pass on their higher costs to their customers.

    They’re concerned about losing their jobs and so are union employees at the bottling facilities. Those plants could be forced to close and put thousands out of work. Union jobs could be chased out of Philadelphia by a tax that targets one industry.

    Corner stores in poor, under-served communities who lost business when the cigarette tax was imposed, are concerned about losing more customers. Some of those businesses will be forced to close.

    The Mayor’s proposal – the highest beverage tax in the nation – would nearly double the cost of a 12-pack of soft drinks, to more than $8. A $2.04 tax on a 2-liter bottle would be more than the cost of the product itself. A family pack of beverages would be more than double the cost due to a $7.20 added tax, bringing the price to more than $13.

    Philadelphians are the second highest taxed population in the country. Now the Kenney administration must understand this is yet another regressive, discriminatory tax targeting one industry’s products.

    The recent budget hearing illustrated the tax is not a well-thought-out plan and won’t be able to generate the revenue to deliver on its promises. Council President Darrell Clarke pushed back on the idea that the tax – levied on distributors – might not be passed on to consumers, saying at the end of the day, they’re going to pass that on. Councilwoman Cindy Bass has asked for an analysis of how the tax could affect poor communities and small businesses.

    If this tax proposal is approved, it will be borne on the backs of our poor. It will be paid for by lost distributor jobs and closed bottling plants. It will be paid for by the corner stores that will shut their doors.

  • One News Now - April 6, 2016

    A Dem. pushing to tax the low-income brackets?

    The mayor of Philadelphia continues to make headlines for a so-called soda tax, but critics maintain it will do more harm than good.

    Philadelphia Mayor Jim Kenney (D) has proposed taxing sugary beverages at three cents per ounce, which would be the highest soda tax proposed in the U.S., and he wants to use the revenue to pay for things such as universal pre-Kindergarten, which was one of his major campaign promises last year.

    "I think it's very fascinating that these taxes, these soda taxes, are coming from the left, because they are the most regressive taxes that you can come up with," comments Jeff Stier, senior fellow and director of the Risk Analysis Division at The National Center for Public Policy Research. "They hurt poor people the most."

    According to Stier, wealthy people are not going to worry about paying more for soda. But for people in lower-income brackets, the higher amount will hurt.

    "The tax is going to fund programs by taxing poor people," Stier adds. "I'm surprised that the left is in favor of that, when they always complain about the burden of tax on low-income people."

    The analyst adds that people behind these kinds of taxes purposely attach them to heartstring issues -- in this case, early childhood education. In doing so, Stier says they have a defense when critics speak out.

    "They would say, 'If you are against the soda tax, then you must be against children being educated,'" Stier explains. "By the way, all of the evidence shows, at least in the history of cigarette taxes and settlement money from the massive settlement agreement that state attorneys general signed, that the money doesn't go to where they say it's going to go."

    In a related paper for the Independent Women's Forum, Senior Fellow and author Julie Gunlock urges people concerned about these kinds of taxes to get organized and to make their voices heard.

  • Observer - April 5, 2016

    Sugar Nanny

    Philadelphia Mayor Jim Kenney thinks he has found the perfect solution for two of his city’s most vexing problems: inadequate revenues for popular initiatives such as universal pre-K; and the city’s ongoing obesity epidemic. The solution? A three-cents-an-ounce tax on sugary sodas.

    But rather than pitch the sugary-soda tax as a good-health, anti-obesity initiative, Mayor Kenney has eschewed nanny-state rhetoric in favor of Santa Claus-in-April promises. The mayor says that in addition to universal preschool, the $400 million the new tax is expected to generate over five years will also pay for renovations to libraries, parks, recreation centers and community schools that offer enhanced social services. It will even bail out the troubled municipal pension system—at least according to Mr. Kenney.

    Regressive sin taxes hurt the exact people they’re designed to help.

    Just imagine what the mayor could fund if he extended his sugar tax to Dunkin Donuts or Starbucks’ Mocha Frappuccinos.

    Philadelphia wouldn’t be the first municipality to implement a sugary-soda tax. Berkeley, Calif., imposed a penny-per-ounce tax in 2014.

    Other countries have experimented with “fat taxes” as well. Hungary, which has the highest obesity rate in Europe—at 18 percent compared with America’s 35 percent—is taxing energy drinks, and both sweet-or-salty snacks, as well as sugary soda. But Denmark, which implemented a soda tax in the 1930s, abandoned it in 2012 when it realized residents were going to Germany and Sweden to buy their desired treats. (Apparently, middle-class residents of Berkeley are willingly paying the higher prices, while lower-income residents are traveling to nearby Oakland, Emeryville and Albany for their soda.)

    It is understandably tempting for politicians to want to tax “sinful” habits. And sometimes such policies succeed at generating additional revenues and/or changing behaviors. Heavily taxing cigarettes has reduced teen smoking. In addition to a $1.01 per-pack federal excise tax, states and municipalities often add their own consumption taxes. New York City’s combined state-local tax on cigarettes is $5.85 per pack; Philadelphia’s is $3.60—which suggests where Mayor Kenney may see his next opportunity.

    We have several concerns about Philadelphia’s soda tax. First, it is an incredibly regressive form of taxation, and will impact poor black and Hispanic families far more than it will white, middle-class households. And maybe that is exactly what Mayor Kenney wants to do—without sounding like the nagging nanny. (Obesity is much higher among black and Latino populations than among whites. So is sugary-soda consumption.) We’d prefer Mayor Kenney be candid about his dual motivation—and extend the tax to those donuts and Frappuccinos. Better yet: embrace the proven idea, demonstrated over and over again in New York City during the Giuliani era, that lowering taxes is actually the key to higher overall revenue.

  • Philly.com - March 31, 2016

    Giordano: If we tax Big Soda, is Big Cheesesteak next?

    HILLARY CLINTON famously espoused the mantra, "It takes a village to raise a child."

    Mayor Kenney's mantra is "It takes a village tax on sugary drinks to raise a child." As Kenney sees it, his villagers don't have to fear the Big Bad Wolf, but rather Big Bad Soda. The wolf is not huffing and puffing. The villagers are huffing and puffing because they are made fat by Big Soda.

    Kenney has not spoken as much about the health benefits of this new tax in recent days. Instead, apparently bristling at the argument that this tax will affect poorer people the most, he has launched attacks on evil corporations making money off everyday Philadelphians. When the mayor launched his campaign at a recreation center in Olney, Philly.com reported that Kenney said, "I don't think I can fail based on the people who are standing behind me, because they are Philadelphia. They're not corporate America, they're not Big Soda, and this is not personal toward Big Soda, but there's a lot of money being made off the backs of poor people. And the argument they'll make is that this is a tax on the poor. Well, they've been taxing the poor for generations, and what we're looking to do is take some of that profit and put it back into the neighborhoods."

    I know that when extreme liberals such as Kenney want to tax something, they are allowed to abandon reality. However, how have soda companies taxed the poor? How have they made lots of money off the backs of poor people?

    Apparently, Big Soda is the new Big Tobacco. In Kenney's view, they are outsiders selling a harmful, addictive product to unsuspecting villagers, and now their bill is due with a new sheriff in town. This should be a warning to Big Scrapple and Big Cheesesteak, two other favorite Philadelphia foods that Kenney and his gang of real Philadelphians might target next.

    Kenney needs to demonize Big Soda because there is no reason why it should be singled out for harm, even if he is focusing on the damage caused by sugar. Former Philadelphia Mayor Ed Rendell made this point recently when he appeared on the Rich Zeoli Show on WPHT (1210-AM).

    "Do I think the soda tax is a good idea?" he said. "I said when Mayor Nutter proposed it, that it singled out one industry. While it's true that sugary drinks are a health problem, so are cheeseburgers. So are doughnuts. Are we going to do a tax on sugary doughnuts at Dunkin' Donuts and Krispy Kreme?"

    In fact, Kenney's proposal for a 3-cent tax on every ounce of soda is so extreme that when I interviewed the head of the Berkeley, Calif., coalition that got a 1-cent tax on every ounce of soda, he was stunned. Radical Berkeley is the only other American city with a soda tax.

    It also is the city that most embodies liberal utopian fantasies. I think Kenney shares these fantasies.

    One of these fantasies is that universal pre-K is the silver bullet that will remove many of the problems caused by the breakdown of the family structure in Philadelphia. Pre-K is fine, but it is not the great equalizer. Policies that celebrate and strengthen the traditional family are a better formula for success. However, creating those families is much harder than pursuing a utopia fueled by taxation.

    In the upcoming fight, watch for the Kenney people to cite a poll they commissioned during his mayoral run that showed that 57 percent of Philadelphia voters supported a soda tax to fill a budget gap. However, as Philadelphia magazine reported, 68 percent of respondents said they would support making universities and large nonprofits pay property taxes.

    The magazine reported that Kenney's people think this is an area worth pursuing, but not this year. These are the very people who do support the village raising the child rather than strong families. They should be happy to be taxed.

    Big College, watch out, you're next.

  • Philly.com - March 31, 2016

    Would consumers bear full brunt of soda tax?

    Mayor Kenney has contended that thirsty Philadelphians won't bear the full brunt of his sugary-drinks tax if it's passed. Rather, it would be partly absorbed by distributors and retailers, he says.

    The Kenney administration says the tax will bring in $432 million over four-and-a-half years.

    But, at the same time, it seems the mayor's revenue projections assume the opposite: that the entire 3-cents-an-ounce tax gets passed on to consumers.

    "It's not contradictory," city spokeswoman Lauren Hitt said Wednesday. "The administration has said we think it's unlikely the entire tax will be passed on to customers based on what we've seen in Berkeley. [The California city is the only place in the nation that now has a soda tax.] However, best practices for revenue projections require that we take the most conservative approach possible."

    The administration says the tax will bring in $432 million over 41/2 years.

    To come up with that pot of money, Kenney's finance team factored in a decline in sugary-drink consumption of 55 percent. That drop-off is based on a scenario where the full 3-cents-per-ounce tax shows up on a soda's sticker price. (The soda industry puts the dip in consumption at 79 percent.)

    If less of the tax gets passed on to consumers, the revenue only goes up.

    "They're putting the critique out there that this is somehow not a stable source of revenue," Hitt said of critics who call the tax regressive. "And we're saying, actually, we're going above and beyond to make sure our revenue projections are stable. And if you ask us the question 'Do you think this will all get passed on to the consumer?,' the answer is still no."

    The administration has pointed to the experience in Berkeley, where less than half of the 1-cent-an-ounce tax was reportedly passed on.

    The soda industry contends soda drinkers will see the full levy at the cash register. It is a prediction that grocery-store and restaurant owners have echoed.

    "The administration is just spinning numbers to fit its sales pitch to taxpayers," said Larry Miller, a representative for the antitax coalition. "Without exception, grocery operators as well as restaurant and bar owners have told us they will pass on the full amount of the tax. The fact is, whatever these projections are based on, this revenue stream is unreliable and will not pay for the administration's proposed programs."

    Miller has also argued that Berkeley isn't a fair model. It's a much smaller, wealthier city with a soda tax one-third of the rate of Kenney's proposal.

    David Frisvold coauthored one of the often-cited studies looking at Berkeley soda prices before and after the tax.

    "By and large, what we found is less than half of the tax seemed to be passed through to consumers, and in fact, in many situations, it's even less than a quarter," said Frisvold, a professor at the University of Iowa.

    When it comes to Philadelphia, he's cautious.

    "There's a lot of moving parts to infer what might happen in Philadelphia," he said. "No one's ever implemented a tax of this magnitude before."

  • Philly.com - March 31, 2016

    Letter: Teamsters, other workers will suffer if soda tax becomes law

    MAYOR KENNEY'S proposed 3-cents-an-ounce tax on sugary drinks is difficult to swallow, especially for the city's poor, small shop owners, grocers and the Teamsters Union drivers and bottling-plant workers I represent.

    The regressive tax, which City Council already rejected twice under the previous mayor (including two "No" votes by former Councilman Kenney) is now being spun by the Kenney administration as the only way it can afford to pay for its ambitious new proposals, which is simply untrue.

    Once again, Philadelphia's government is unfairly targeting one industry with such an onerous tax. If enacted, the sugary drink tax will disproportionately hurt hardworking, middle-class families and the city's working poor. City officials continue to exhibit an alarming lack of understanding of the economic consequences of this tax in dismissing the Teamsters' belief that the tax will cost our membership jobs in an already weakened beverage industry and a down national economy.

    If this ill-considered tax is passed, the cost of sugar-sweetened drinks - soda, ice tea, fruit juice, sports drinks and energy drinks - will more than double in cost. People will stop buying the products in Philadelphia or drive to the suburbs to purchase them (much as they've done to avoid the city's cigarette tax). City stores will stop stocking the products; Soda companies will move fewer products; and Teamsters drivers and industry support personnel will lose their jobs.

    Beverage industry statistics show that when soda prices rise 10 percent, sales drop 8 to 9 percent. Reductions in sugary-drink sales mean job losses, from bottling plant workers to Teamsters delivery drivers. Our best estimate at this point is potentially as many as 2,000 regional jobs lost if this tax is passed. Any projected job gains being touted by the city through the implementation of new programs funded by a sugary-drink tax will be more than offset by the many job losses brought about by this tax.

    Philadelphians already are burdened with among the highest taxation rates in the country. When does it end?

    And our concern isn't only about the adverse impact on Teamsters members. Supermarket employees, convenience store workers and small-business owners who sell sugary drinks in their stores or restaurants also will be affected if this outrageous tax is passed into law.

    Thousands of family sustaining, middle-class Philadelphia jobs in beverage production, supply, distribution, sales and retailing depend on a healthy beverage industry.

    The loss of any of these jobs will only further erode the city's tax base. Teamsters Local Union 830 represents more than 3,000 Philadelphia members in the soft-drink and brewery industries. These hardworking, taxpaying city residents do not deserve to have their jobs placed in jeopardy because of a misguided attempt to fund new programs solely by taxing the product they produce and deliver.

    Worse still, the sugary-drink tax is discriminatory. Taxing one product and one industry, to the exclusion of numerous items containing similar sugar-based ingredients, is simply unfair.

    The tax would not be imposed on snack items such as ice cream, candy, cookies, cupcakes, frozen pops, doughnuts or other high-sugar foods. Instead, this tax would unjustly target and burden the beverage industry alone.

    It's also interesting to note that the consumption of sugary beverages nationwide has been steadily declining for several years.

    Nowhere has that decline in sales been steeper than in Philadelphia, calling into question the accuracy of the revenue projections derived from the sugary-drink tax, as put forth by the Kenney administration. Philadelphia consumers simply are not drinking as much sugar-sweetened beverages these days.

    You can bet the farm that if this burdensome tax becomes law, those consumers who still purchase sugary beverages will leave the city limits to buy it.

    On behalf of more than 3,000 Teamsters, many of whom live and work in Philadelphia and are dependent on the beverage industry for their livelihoods, I respectfully ask the members of City Council to vote against the sugary drink tax. It will be an additional financial burden on families and small-business owners already struggling to make ends meet.

    Daniel H. Grace

    Secretary-Treasurer

    Teamsters Local 830, Philadelphia

  • Philly.com - March 30, 2016

    Council raises soda-tax questions

    Mayor Kenney's proposed soda tax dominated the city's first budget hearing Tuesday, with discussions of whom the levy would impact and whether a lower tax was possible.

    Kenney has proposed a 3-cent-per-ounce sugary-drink tax to bring in $96 million annually over five years. The revenue would fund universal pre-K, community schools, and improvements to parks and libraries.

    Lower the tax by 1 cent, however, and revenue only drops to $88 million annually, according to administration figures. That's because of an assumed higher rate of consumption if the tax is lower.

    "So really, the extra penny from 2 to 3 cents gives us very little revenue," said Councilman Allan Domb, who broached the topic at the hearing.

    A 1-cent-per-ounce tax would bring in $57 million annually over five years, according to the administration. That would nearly cover the cost of Kenney's prekindergarten plan, but nothing else in his proposal.

    Finance director Rob Dubow said the 3-cent levy is needed if the administration is to fund all of its initiatives.

    Council members have thus far been mum on whether they will support the tax. A similar proposal twice failed under Mayor Michael Nutter.

    "We agree with the administration in terms of pre-K and fixing up neighborhood recreation centers and all the other good things," said Council President Darrell L. Clarke. "But the devil's in the details."

    Clarke pushed back on the idea that the tax - levied on distributors - might not be passed on to consumers.

    "Fundamentally, I don't believe that," Clarke said. "At the end of the day, they're going to pass that on."

    Councilwoman Cindy Bass asked for an analysis of how the tax could affect communities and small businesses. Dubow conceded that sugary drinks are mostly purchased in poorer areas where soda companies do their heaviest marketing.

    "What it sounds like we're saying is, OK, we're going to make sure we get the resources our young people desperately need, but also what we're saying is the population that's primarily going to pay for it is our most vulnerable populations," Bass said.

    Administration officials said they would consider whether the city could tax other sugary items, including powdered drinks.

    And if the tax doesn't generate the revenue the city predicts it will?

    "The plan would be to look at the revenue to see what it would support and go from there," Dubow said.

    Councilwoman Jannie Blackwell said she's uncomfortable supporting the tax without more information on the pre-K program it would fund.

    "What neighborhoods will they come from? Which children will be picked?" she asked. ". . . We've got to have details about this pre-K program if we're expected to vote for it."

    Also Tuesday, Council members complained about delays in property value reassessments. A new system won't be up and running until 2019.

    "We're leaving money on the table," Councilman Derek S. Green said.

    Several Council members also voiced frustration over the lack of minority and female-owned businesses with city contracts and local participation in development projects.

    "Every time a new program comes up, the conversation and the proposed remedy to participation is always after the fact," Clarke said. "The reality is this was discussed during the last administration last year. At what point, as you pull together a program, is the participation part at the front side of the conversation?"

  • Philly.com - March 30, 2016

    Commentary: Soda tax will hurt poor people and local businesses

    PHILADELPHIA's low-income families and entrepreneurs are under attack.

    The culprit doesn't mean any harm. Really, he is a fine guy. But that doesn't justify his actions or his failure to consider the consequences.

    Mayor Kenney's proposed $400 million soda tax sounds clever at first glance: tax people for enjoying a beverage that admittedly isn't the healthiest and fix the city's broken budget. Unfortunately, not only is his tax highly unlikely to accomplish these goals, it also will harm our poorest neighbors and the entrepreneurs who support the local economy.

    What politicians often forget is that taxpayers are unique individuals who respond to tax hikes in different and unexpected ways. While some people might change their drinking habits, as the mayor hopes, many will not. The effect will not necessarily be lots of healthier people or more revenue, but less money in the pockets of those who need it most and in the local businesses they patronize.

    Raising $400 million in new taxes will hit pocketbooks hard. At 3 cents of higher taxes per ounce of sugary drink, a two-liter bottle would more than double in price from $1.50 to $3.52.

    Low-income residents will bear the brunt of this, as they generally pay little or no income taxes, but do spend a disproportionate amount of their income on soda and other sugar-sweetened beverages. Furthermore, while middle- and high-income residents are able to drive outside the city to shop at larger discount stores, low-income residents, especially those without vehicles, often will not have that option.

    Even if low-income residents begin to change their drinking habits, they will still bear the major burden of this tax.

    Meanwhile, the more mobile residents of the city will opt to do more shopping outside of Philadelphia. The Kenney administration's finance director, Rob Dubow, has already acknowledged that the city expects demand to fall by more than half in just the first year, as consumers shop outside the city. Some stores might be able to handle the lost revenue, but smaller grocery stores, convenience stores and street vendors will be hit hard by the lost revenue. These businesses serve a real function in our city: hiring local residents, giving life to low-income communities, and of course, providing Kenney's all-important tax revenue.

    If they go out of business, there will be people without jobs, communities without businesses, and tax coffers without tax dollars. This plan was really quite shortsighted.

    If that's not bad enough, it's unlikely this tax will both decrease consumption of sugary beverages and raise tax revenue. After all, if people don't drink so much soda, what will happen to the tax revenue it was supposed to provide?

    The city estimates a 55 percent decline in the sales of sugary beverages the first year and a 1 percent decline in sales in the following years. This is a highly optimistic scenario, given how high the tax is and how easily suburban residents will be able to avoid it. Lots of people will continue drinking the same amount of cola, but they won't buy it from our local businesses. The city won't have much more tax revenue, but our poorest residents will have a lot less money, and our local businesses will struggle.

    Philadelphians might want to consume a little less soda, but that's up to each responsible adult to decide, not Kenney. His job is to write a responsible budget that provides for our city's core functions without unduly burdening the hardworking taxpayers he serves.

    Kenney certainly doesn't intend to harm low-income Philadelphians or our local businesses, but that doesn't excuse him. There's no fizz in a regressive tax hike. We urge the City Council and Kenney to find better ways to fund the city's needs. It's time to pour Philadelphians a new drink - this proposal has gone flat.

    Beth Anne Mumford is the Pennsylvania state director of Americans for Prosperity.

  • CBS Philly - March 30, 2016

    Philadelphia’s Soda Tax Is Excessive

    Nate Benefield, the Vice-President for Policy Analysis at the Commonwealth Foundation, weighed in on Philadelphia Mayor Jim Kenney’s proposed soda tax and blamed the tax burden faced in the region for an overall decline to the Delaware Valley.

    Benefield, while talking with 1210 WPHT’s Dom Giordano, said the soda tax is excessive.

    “This is a punitive tax intended to be, well, this is good because we want to get people off of sugary drinks. But where does it end? Former Mayor and Governor Rendell said why not tax donuts? Well, why not extend this and tax the Philadelphia cheesesteak?”

    He claimed that this tax and other’s like it are having a negative impact on the entire area.

    “Across the region, certainly the City of Philadelphia itself has very high taxes, even in the suburbs where the taxes are lower and there is less regulation, you see the down flow in terms of job opportunities, where we see businesses moving to other parts of the country where the tax and regulatory climate is a little freer. That’s where job growth leads to population and you see that Philadelphia, both the city and the region have fallen in terms of their national rank.”

    Benefield believes that Philadelphia and the communities surround it are paying a penalty for the high tax rate faced by residents.

    “When you look at the metro area, you have New Jersey being part of that. New Jersey is one of the highest taxed states, I think the second highest state and local tax rate in the country, Pennsylvania, tenth highest tax burden. Certainly the City of Philadelphia itself, all leads to a regional decline because of that tax burden and the regulatory burden where residents as well as job creators are looking for other, more competitive areas to set up shop.”Philadelphia (CBS) – Nate Benefield, the Vice-President for Policy Analysis at the Commonwealth Foundation, weighed in on Philadelphia Mayor Jim Kenney’s proposed soda tax and blamed the tax burden faced in the region for an overall decline to the Delaware Valley.

    Benefield, while talking with 1210 WPHT’s Dom Giordano, said the soda tax is excessive.

    “This is a punitive tax intended to be, well, this is good because we want to get people off of sugary drinks. But where does it end? Former Mayor and Governor Rendell said why not tax donuts? Well, why not extend this and tax the Philadelphia cheesesteak?”

    He claimed that this tax and other’s like it are having a negative impact on the entire area.

    “Across the region, certainly the City of Philadelphia itself has very high taxes, even in the suburbs where the taxes are lower and there is less regulation, you see the down flow in terms of job opportunities, where we see businesses moving to other parts of the country where the tax and regulatory climate is a little freer. That’s where job growth leads to population and you see that Philadelphia, both the city and the region have fallen in terms of their national rank.”

    Benefield believes that Philadelphia and the communities surround it are paying a penalty for the high tax rate faced by residents.

    “When you look at the metro area, you have New Jersey being part of that. New Jersey is one of the highest taxed states, I think the second highest state and local tax rate in the country, Pennsylvania, tenth highest tax burden. Certainly the City of Philadelphia itself, all leads to a regional decline because of that tax burden and the regulatory burden where residents as well as job creators are looking for other, more competitive areas to set up shop.”

    Sponsored Content Provided By Commonwealth Foundation

  • The Philadelphia Citizen - March 29, 2016

    BEYOND THE SODA TAX.

    The battle lines are drawn. But hardly anyone is asking: Will yet another tax help us grow?

    A little over a week ago, I was a panelist on Inside Story, Channel 6’s Sunday morning public affairs show. On air, a bunch of us debated the soda tax. We were in general agreement: Mayor Kenney had smartly played the politics, the soda tax is regressive in that it disproportionately disadvantages poor and working class consumers, and pre-K and the refurbishing of public parks are good causes.

    It wasn’t until later that it dawned on me: An unstated mutual assumption informed the whole conversation. We were debating the soda tax, not whether to tax. It felt like deja vu all over again.

    Because it always seems like tax time in Philadelphia, and it always seems like we debate individual tax proposals without ever confronting our addiction to tax-first policies. We’re the second-most taxed city in America, right behind Bridgeport, Connecticut—not exactly great company to keep. Just think of the litany of taxes over the last decade or so: Three property tax hikes. The “temporary” sales tax that—lo and behold—has become permanent. Then there are the multiple parking taxes, as well as taxes on cigarettes, liquor-by-the-drink and trash collection. And now they’re coming for your sugary drinks. Philadelphia’s Everyman taxpayer must be reeling, and we haven’t even mentioned job cripplers like the city wage tax or the business privilege tax, since renamed the business income and receipts tax. Not only has there been a new tax every year, but water rates just went up by 12 percent, and PGW will soon raise its rates, as well.

    I’m no anti-tax supply-sider; I’m a Communitarian, and we believe in intelligent, targeted taxing in order to serve the common good. We believe in growing the tax base, rather than just taxing more. It’s a simple game plan, and you see its efficacy in high growth cities like Houston, Austin and Boston: More jobs equals more taxpayers equals more money to tackle common ills like schools, crime and unfunded pensions. The alternative is to tax the same citizenry more year after year, stifling economic growth. No wonder Philly’s GDP growth in 2014 was a mere 1.9 percent, second to worst of the nation’s ten biggest cities.

    The World Bank recently released a report, “Competitive Cities for Jobs and Growth: What, Who and How.” In it, the authors study 750 cities across the globe, many of which have higher economic growth rates than their host countries. There’s no magic bullet for fostering growth, but there are shared tendencies. And two jump out as instructive for Philadelphia, particularly if you agree that our goal ought to be to the grow the local tax base. First, the study found that competitive cities “tend to highlight the importance of a taxation and regulatory system that is conducive to business and investment.” Second, here’s hoping Mayor Kenney takes this finding to heart: “In competitive cities: a) business leaders were consulted about their needs and the constraints they encountered in their operations; b) infrastructure investments were made in collaboration with the firms and industries they aimed to serve; c) skills initiatives were designed in partnership with firms…”

    The Mayor’s transition team report, though, mostly promises more of the same. There’s hardly any mention of reaching out and collaborating with the business community. Instead, there are calls for more “we know what’s best for you” prescriptions, like the recommendation to “realign Commerce activities and create innovative solutions to better support the small business community.”

    What’s really needed is a humbler approach, and there’s some early evidence that new Commerce Director Harold Epps, who comes from the private sector and seems refreshingly open, is taking it. Epps is reaching out and listening, which is what the transition team should have urged Kenney to do. I have yet to hear from a major Philadelphia CEO that he or she feels like a partner in economic growth strategy with local government. Instead, it’s far more often that I hear what one well-known entrepreneur told me when I asked if our mayor or City Council members ever asked him for ideas as to how Philadelphia can better compete economically. “The only time I hear from politicians is when they want money,” he said.

    So here we are again, with another tax in the offing, and the pro and con sides are taking to the airwaves. But where is the side that stops to ask why we continuously look to new taxes to fund every idea? It doesn’t exist, because one-party towns tend to lack the introspection needed to question the feeding of the beast that is local government. You’d think, given that we just had a mayor’s race, that we would have vetted this issue of who pays for city government, and what that return on investment might look like. Think again.

    Jim Kenney, you’ll recall, ran on a platform of providing universal pre-K education, and studies show that pre-K plays a pivotal role in ultimately promoting upward mobility. But did we ever talk about how to pay for the program? Hardly. When asked how he planned to pay for his ambitious plans in the first televised mayoral debate, (the one most notable for then-frontrunner Lynne Abraham’s fainting spell), Kenny responded not by saying he’d favor a tax on soda, something he’d opposed twice before as a Councilman. No, candidate Kenney said he’d borrow from the Montgomery County playbook and institute zero-based budgeting. That would entail each city department starting their budget request at zero and building out to meet their mission. In Montco, the exercise exposed all sorts of political spending and job creep in departmental budgets and reduced the number of public jobs from 3,200 to 2,400.

    Kenney ran on zero-based budgeting, but forgot to implement it when he became Mayor. Instead, I’m told the administration used a version of project-based budgeting in putting together its current proposal, which is fine…but it’s not what candidate Kenney promised Mayor Kenney would do. And that’s because project-based budgeting, which merges annually recurring “overhead” line items with the funding of specific projects of indeterminate length, may be smart budgeting, but it doesn’t expose fat in the system. It’s not designed to lead to the kind of efficiencies Montgomery County experienced. Kenny no doubt knew that there would be too many sacred cows exposed using a zero-based approach. But why run on it? Because it’s a helluva lot easier than saying, “I’m going to raise taxes on soda. Vote for me!”

    No wonder the electorate is cynical about its elected leaders. Last year, it was the cigarette tax. Now it’s soda. What will they be coming for next? Because, trust me, there will be a next time…if we don’t start creating jobs and growing the tax base.

  • Billy Penn - March 29, 2016

    Kenney official admits soda tax would hit poor neighborhoods hardest

    The city’s finance director today acknowledged that Mayor Jim Kenney’s proposed soda tax would hit poor neighborhoods the hardest, a point made earlier by experts, one of whom called the tax “regressive” and “imperfect.”

    Finance director Rob Dubow said during a budget hearing today that the administration hasn’t conducted a neighborhood-by-neighborhood analysis of how a sugary drinks tax would impact consumers, but Councilwoman Cindy Bass pressed him on the matter, asking specifically for the consumers of most sugary drinks.

    “From everything we’ve seen, it’s in poor neighborhoods,” Dubow said, “which is where the advertising is targeted to.”

    The first-year mayor has proposed a 3-cent-per-ounce sugary drink tax that would make Philadelphia the only major city in America to pass such a tax at all and it would be the highest sugary drinks tax in the country. Berkeley, Calif. is the only other city to pass such a tax where distributors pay a 1-cent per ounce tax.

    Kenney’s proposed soda tax has plenty of opposition (read: Big Soda lobbyists), but it was introduced as an idea in order to help fund the new mayor’s ambitious budget plans, including implementing universal pre-K and establishing community schools.

    His administration has repeatedly said the sugary drinks tax, if passed as is, would positively impact low-income communities because of the programming it would fund. It’s also pointed out that the sugary drinks tax would be levied on distributors, not directly on consumers.

    Dubow said Tuesday that the city predicts distributors would eat some of the cost of the tax and pass on about half to the consumer, or 1.5 cents-per-ounce. A California-Berkeley study found that in the case of Berkeley’s soda tax, between 50 and 70 percent of the new tax was passed along to the consumer. If Kenney’s tax passed at 3 cents per ounce and 70 percent of the tax were passed on, a 12 oz. soda that now costs $1 would increase to $1.24.

    Tuesday was the first time members of City Council were able to publicly question members of Kenney’s administration about the proposed tax. The mayor’s chief of staff Jane Slusser delivered testimony on the mayor’s five-year plan, reiterating that Kenney’s priorities are directly tied to the passage of the soda tax.

    “We believe that taxing sugary drinks will provide the city with the necessary funding to deliver critical services,” she said, “without raising a broad-based tax that would be challenging for all residents and families across Philadelphia.”

    Council President Darrell Clarke said during the hearing that he has concerns distributors won’t take on the amount of the tax the city is hoping they do and are more likely to pass it along to consumers. Councilwoman Blondell Reynolds Brown expressed similar concerns, asking Dubow what processes are in place to ensure the tax would indeed fall on the distributor.

    Dubow said the city would add an additional $1.8 million into the Department of Revenue budget for implementation and enforcement of the new tax to make distributors compliant.

    Additional hearings will be held regarding Kenney’s proposed budget throughout May.

  • Inside Story - March 27, 2016

  • Philly.com - March 25, 2016

    Commentary: Beverage tax will do more harm than good

    Prekindergarten, community schools, and renovated parks and recreation centers are critically needed services for underserved residents in Philadelphia. But the Kenney administration's plan to fund these important programs with a beverage tax - an unstable and declining revenue source - puts them in jeopardy before they even get started. Moreover, the proposed tax, which would dramatically increase the average grocery bill, would hurt the very families that these programs are designed to serve.

    The bottom line: This discriminatory tax is neither a reliable nor a sustainable source of funding to support the host of important initiatives it is supposed to fund.

    The administration's own analysis indicates that beverage consumption will fall by more than half if this tax is imposed, thereby reducing funding for these programs over time. But far from being a conservative and responsible calculation, that analysis underestimates the amount that consumption will drop - and the number of middle- and upper-class Philadelphians who will evade the tax by shopping in the suburbs. When the numbers don't add up, where will that leave universal prekindergarten, community schools, and needed investments in our public facilities?

    Make no mistake, the Philadelphians who would end up footing the bill for this tax are working families. While well-heeled Center City residents would shift their shopping to surrounding counties to avoid this onerous levy, families in Kensington and North Philadelphia - the ones that don't own cars - would not have similar options. Sadly, these low-income residents would likely be left with higher grocery bills but without the services they have been promised.

    Their wallets will take a further hit when they are forced to pay 3 cents an ounce for a range of beverages - from soft drinks to teas to sports drinks to juices. In many cases, the tax would be greater than the cost of the beverage itself. If it's passed, Philadelphians will be forced to pay $8 for a 12-pack of soft drinks that is now priced at $4.

    This tax also would reduce options for groceries in some of our poorest neighborhoods while simultaneously reversing much of the terrific work the city and state have been doing to expand food access in the underserved communities that are known as food deserts.

    Growing up in the Strawberry Mansion section of North Philadelphia, I have firsthand knowledge of the challenges that face residents of food deserts. We had to travel nearly three miles to the closest grocery store. I've experienced the opportunistic convenience stores that tack on an almost 50-percent markup on certain items, taking advantage of a lack of options. This tax would only exacerbate the problem.

    Working with nonprofits like UpLift Solutions, the commonwealth and the city have expanded healthy food access for more than a quarter-million residents. In just the last few years, we have succeeded in opening large supermarkets in diverse communities across Philadelphia, including the ShopRite at the shuttered Tastykake factory in East Falls and the Fresh Grocer at Progress Plaza on North Broad Street.

    The administration's beverage tax would put all of that progress in jeopardy by making it unprofitable to do business in many poor neighborhoods. It would discourage future store openings and could cause job losses and even closures of existing supermarkets.

    A beverage tax would also hurt the neighborhood grocery stores that are too often the only place to shop for low-income Philadelphians who live in food deserts.

    Operating on razor-thin margins, these family-owned business would not be able to withstand an outrageously high levy imposed on many of the products that keep them in business. They may have to lay off workers, reducing job opportunities in neighborhoods with chronically high unemployment.

    Over the years, the city has worked with these establishments to provide fresh fruits and vegetables. We are proud of this progress and recognize that any efforts to further burden these stores might ultimately mean that some neighborhoods are left with no options at all.

    There is no denying the importance of the proposed programs to expand critical services for the families and children of our city. However, such proposals should be funded by a consistent and stable revenue source - not one that can be circumvented by a short drive to another store.

    We need to fund these important priorities with a serious revenue proposal and not hold them hostage to a reckless and discriminatory new tax.

    Atif Bostic is executive director of UpLift Solutions, which works to increase access to groceries in underserved neighborhoods. atif.bostic@upliftsolutions.org

  • Philadelphia Inquirer - March 24, 2016

    Diminishing revenue not best way to fund pre-K

    Making it easier for parents to find quality pre-kindergarten programs for their children makes sense for Philadelphia. But it’s an arduous, expensive task that won’t immediately make the city more attractive to families or to businesses looking for the best environment for their employees. For that to happen, more must be invested in higher grades too.

    Mayor Kinney’s commission on universal pre-K issued a draft report last month that said only a third of the city’s 42,500 pre-school-age children “have access to high-quality, publicly funded pre-K.” The report doesn’t say how many children have the financial means to enroll in non-publicly funded pre-K. But maybe that will be part of the commission’s final report, which is expected in April.

    Meanwhile, more information can be found in an analysis by the Reinvestment Fund, which says it will make $7.6 million in loans at below-market rates to help child care centers expand their facilities. The study said the demand for child-care seats in Philadelphia is “slightly greater” than the supply. It put demand at 108,700 seats and the supply at 101,500.

    The study also counted pre-K programs considered “high-quality” under the Keystone STARS rating system, which Kenney wants to use. You need three or four stars to be ranked as a high-quality provider, which requires meeting rigorous staffing and academic standards.

    Only about 70,000 pre-K seats available in Philadelphia are at child care centers participating in the voluntary Keystone STARS program, and only about 14,600 of those seats are at high-quality facilities, according to the Reinvestment Fund analysis. About 31,000 seats are at centers with one or two stars, while 24,400 are at centers with no stars at all.

    Acquiring stars takes time. The Chinatown Learning Center has four stars now, but had only two stars 10 years ago. It was aided by participation in the United Way’s Success By 6 program, which provides consultants who help pre-K providers improve their learning environments. Since its inception in 2007, Success By 6 has helped 205 out of 330 child care centers achieve three- or four-star status.

    Acquiring stars also takes money. Many child care centers pay less than the minimum $11.94 an hour that the city requires any company or agency funded by it to pay employees. Low salaries typically lead to frequent staff changes as workers chase higher pay. That disrupts the continuity in teaching that pre-K providers must have to improve their Keystone STARS rating.

    The William Penn Foundation is giving the city a $15 million grant, but, like the Reinvestment Fund’s loans, that money is to help providers make capital improvements to their facilities. Kenney wants to impose a 3-cents-a-bottle sugary drink tax that he believes would raise about $95 million a year, with $60 million going to his pre-K expansion program.

    The health benefits of drinking fewer sodas aren’t being touted as loudly as when Kenney, as a councilman, helped defeat Mayor Michael Nutter’s soda-tax proposal in 2011. But quietly making that argument is new city Health Commissioner Thomas Farley, who as New York’s health commissioner helped lead a failed effort to impose a penny-per-ounce tax on sugary drinks in that city.

    Supporters of Kenney’s tax say if it passes poor communities will benefit doubly by having better child care and losing weight. It’s true that obesity is a problem in poorer neighborhoods, but it’s not limited to them. Poor families shouldn’t be stereotyped to make the case for a soda tax. Many try to provide nutritious meals, but are limited not only by income but the absence of conveniently located groceries with healthier food choices

    It should also be noted that the Reinvestment Fund study concluded that affluent areas of the city, including Chestnut Hill, have higher shortages of high-quality child-care providers than poor areas.

    If the tax passes, poor families will spend a higher percentage of their incomes than affluent families to buy sodas in the city. But in addition to being regressive, it’s a tax of diminishing returns. City officials say soda sales may drop as much as 55 percent in the first year after the tax goes into effect, but only 1 percent a year thereafter. If pre-K is important — and it is — why fund it with revenue that’s expected to decrease every year?

    A 7.75 percent property tax increase would also generate about $95 million annually and, according to city revenue officials, would cost the owner of a $130,000 house only about $140 a year in additional taxes. That route makes more sense to fund pre-K, but it’s a tougher sale politically. Philadelphia property taxes have risen more than 20 percent since 2010, which includes the effects of the Actual Value Initiative initiated by Nutter in 2013.

    Kenney and Council members may have the courage to take on soda distributors and grocery operators to get a beverage tax passed. And it may not bother them much that the soda tax is regressive. But the thought of imposing another property-tax hike strikes fear in their hearts. It’s the kind of fear that prevents them from seeing that building the type of educational environment that makes Philadelphia the envy of America would be well worth the cost.

  • Philadelphia News - March 23, 2016

    Rendell Skeptical About Mayor Kenney’s Soda Tax

    Philadelphia (CBS) – Former Pennsylvania Governor Ed Rendell expressed skepticism that the proposed soda tax can viably serve as the backbone for Mayor Jim Kenney’s ambitious agenda.

    Rendell, during an interview with Rich Zeoli on Talk Radio 1210 WPHT, while calling the programs the tax is intended to fund vital, questioned why only one product is being targeted?

    “I think the things that Mayor Kenney wants to use the money that would be generated by a soda tax for, like universal pre-k, are absolutely desperately needed. Do I think that his soda tax is good idea? I said when Mayor Nutter proposed it that it singled out one industry. While it’s true that sugary drinks are a health problem, but so are cheeseburgers. So are donuts. Are we going to do a tax on sugary donuts at Dunkin’ Donuts and Krispy Kreme? Are we going to tax cheeseburgers at McDonalds, etc?”

    In addition to not including other products with high sugar content, he also thinks those who can’t afford to pay the extra tax will be the most heavily burdened.

    “It unfairly hits poor people but they don’t pay the tax if they drink diet soda. They don’t pay the tax if they drink juices. So, maybe it’s trying to get people away from sugar, away from diabetes and you know that juvenile diabetes is one of our growing problems. But the problem with the tax is that I think it’s a little high to begin with and it should be spread out and not just on sodas if you’re going to have a tax like this. It should be spread out on all items that have a health risk.”

    Rendell also pointed out that if the tax significantly diminishes soda consumption, a new revenue stream will be needed to fun the City’s programs.

    “On one hand the City says we’re doing this to improve the health of our citizens, but on the other hand, if the citizens took the lead and stayed away from sugary drinks and went to juices and diet sodas, then it wouldn’t generate the tax we need for full-day kindergarten. I think there is an opportunity for compromise…There are ways that they can work this out that might generate income without penalizing both the industry and penalizing the consumer.”

  • CBS Radio - March 21, 2016

    The Dom Giordano Program

    COO of Continental Food and Beverage, Inc, Randy Berman, joined discussing the effects of the Philadelphia soda tax. Listen here.

  • Metro - March 18, 2016

    The Ernest Opinion: Kenney’s soda tax is tone-deaf to the poor living in food deserts

    When I’m not covering news, I run an afterschool multimedia program for public school students at West Philadelphia High. For some time, I wondered where my mentees’ poor eating habits came from – was it from their family or just mass media promoting junk food.

    As I walked up to 52nd Street Station, I noticed that there aren’t any big grocery stores that complement the healthy eating skills that are often taught during their class hours. Instead, there are mainly fast food joints, vending machines, and greasy food truck stops.

    This is what a food desert looks like. And while Mayor Kenney wants to tax sugary sodas as a way to regenerate funds in our city and pretend to care about the health benefits – he should actually reconsider.

    In 2015, The Reinvestment Fund (TRF), a locally based community development financial institution, reported a 56 percent drop between 2005 and 2013 in city residents who didn’t have access to healthy food options. However, factoring in the city’s growing poverty rate, the figures aren’t that impressive for many target demographics.

    Earlier this month, Kenney proposed a three-cents-per-ounce tax on sugary drinks with the hopes of bringing in an estimated $432 million over five years to pay for his improvements on universal pre-K, community schools, and upgrades to parks and recreation centers.

    This plan sounds impressive in theory – but in application, it’s tone-deaf. The projected value of the tax will definitely benefit those who are also going to be hit the hardest on paying for it. Sugary drinks run supreme in food deserts across Philly because they are often the only beverage next to water that is being sold.

    In other words, increasing a tax on sugary drinks on poor people who live in food deserts as a way to increase funding for their schools and parks is counterintuitive. This is another example of how politics try to put a band-aid on the symptoms without healing the actual wounds.

    If Kenney cares about improving the quality of health for lower income communities, he should actually invest in better quality food access for those devastated. You can’t punish poor people for living in the worst conditions in the city through taxes – and then expect them to rise above said circumstances as a result.

    That’s taxation without representation.

    If he allowed the people to vote on the proposal right now, it would fail miserably. Increasing taxes on a product that holds various degrees of value to Philadelphians isn’t fair at all. If anything, place the tax on huge sports venues or high-end restaurants downtown. Recognize that for many in this city, soda isn’t treated as a luxury --- but the only affordable option next to water.

    I’m calling on our Mayor to reevaluate this plan and actually take in consideration those who don’t have the privilege to buy five different brands of water or choose between seven kinds of freshly squeezed juices. My mentees and their families from West Philly High and beyond deserve better grocery stores with more nutritious food options– not increased taxes that will take away from their ability to thrive.

  • South Philly Review - March 17, 2016

    Too sweet to stomach?

    To the Editor:

    Salty potato chips, hot dogs at the ballpark, cheese steaks, Tastykakes, crabfries at Chickie’s & Pete’s.

    If the three-cents-per-ounce soda tax gets approved, it would be just a matter of time before other ‘unhealthy’ beverages or food items get the sin-tax slapped on them.

    Under Mayor Jim Kenney’s plan, a two-liter of soda at the current price-point of $1.50 would amount to an extra penalty tax of $2.04, which is obviously more than the cost of the actual bottle.

    High-fructose corn syrup can be found in numerous foods and beverages on grocery store shelves in the United States and is widely used as a sweetener in soft drinks, juices, and processed foods.

    The actual biggest killer is developing heart disease based on a high-sodium diet. About 610,000 Americans die from it each year— that’s one in every four deaths, according to the Centers for Dis-ease Control and Prevention.

    More than 40 cities across the United States have rejected the extra taxation on sugary drinks, and such implementation would turn out to be one more burden for overtaxed citizens of Philadelphia.

    Fun fact: Five years ago, as a council member, Kenney rejected the soda-tax that then-mayor Michael Nutter proposed. But, I guess he was just playing politics.

    Jason Kaye Northeast Philadelphia

  • Philly.com - March 17, 2016

    Kenney launches campaign for proposed soda tax

    In a well-worn North Philadelphia recreation center, Mayor Kenney launched his campaign to tax sugary drinks on Wednesday, relegating its opponents to "Big Soda lobbyists" and casting supporters as everyday Philadelphians who stand to benefit from the levy.

    "I don't think I can fail, based on the people who are standing behind me," Kenney said, "because they are Philadelphia. They're not corporate America, they're not Big Soda, and this is not personal toward Big Soda, but there's a lot of money being made off the backs of poor people.

    "And the argument they'll make is that this is a tax on the poor. Well, they've been taxing the poor for generations, and what we're looking to do is take some of that profit and put it back into the neighborhoods."

    This month, Kenney announced his proposal for a three-cents-per-ounce tax on sugary drinks to bring in $432 million over five years to pay for: universal pre-K; community schools; and upgrades to parks and recreation centers. The tax would be collected at distributorships and would not include diet drinks.

    Moments after Kenney had uttered "sugary-drinks tax," those familiar with the battle - waged twice before, when Mayor Michael Nutter tried to impose a two-cents-per-ounce tax - organized in opposition.

    That coalition, Philadelphians Against the Grocery Tax, is funded by the American Beverage Association and is made up of local business owners, community members, and the Teamsters, who represent truck drivers. The group argues that the tax unfairly targets the poor, will not provide the funding promised (its projection is $279 million over five years), and will result in the loss of jobs.

    Another critic of the tax, David McCorkle, president of a state food merchants' association representing 240 stores in the city, said: "The mayor really has no idea to what degree consumers will vote with their feet on this extraordinarily high tax."

    Wednesday's event at Olney Recreation Center introduced a pro-tax coalition called Philadelphians for a Fair Future. The group includes pre-K advocates, the Philadelphia Federation of Teachers, SEIU 32BJ, and the Philadelphia chapter of the NAACP.

    Kevin Feeley, a veteran public relations professional, is working with the coalition, which he says is being supported with private fund-raising.

    "I don't have names to give you today, but this campaign is going to have more than enough funding to be able to wage a very comprehensive effort in support of the soda tax," Feeley said.

    Philadelphia NAACP president Minister Rodney Muhammad of Muhammad Mosque 12 said soda companies target poor communities with their marketing. He argued that the benefits that pre-K would reap outweigh any burden on consumers.

    "A tax on these beverages at the point of distribution is a painless contribution as the city now works to establish, for the first time, a great equalizer in universal pre-K," Muhammad said.

    Kenney said he did not know whether he has the nine votes needed in City Council to pass the bill. He called on those before him to help.

    "You're going to hear a lot from Big Soda - there's going to be an air war, there's going to be a ground war, and there's going to be lobbyists out the wazoo. . . . These are my lobbyists," Kenney said, gesturing to the constituents behind him and encouraging them to call Council members.

    Wednesday's rallying call came after a weekend in which the mayor took heat for an error in the proposed legislation that would tax fountain drinks at a 50 percent higher rate than bottles or cans.

    Kenney said the tax would be three cents per ounce across the board. He said those against the tax are trying to use the error to discredit him.

    "They have nothing else to hammer," Kenney said. "People aren't perfect."

    Within minutes of Wednesday's event, opponents of the tax reached out to respond.

    Tom Singh, who owns five Sunoco franchises in the city, said sugary drinks make up 40 percent of his sales and any tax would be passed directly on to consumers.

    "I have 20 employees. If profit is not there, maybe I have 10 or 12, and that's just me, and there's gas stations and small convenience stores at every corner," he said. "Imagine one or two employees laid off from each business. And these are low-income neighborhood communities."

    Singh said sales of cigarettes at his franchises are down 30 percent since the city started collecting a $2-a-pack tax on Oct. 1, 2014.

    "We haven't recovered from that loss yet," he said. "I don't know that we could sustain business with this tax."

  • Philly.com - March 17, 2016

    Mayor’s desperation tax-tics

    When you don’t have a good argument to make for your ideas, you attack the opposition. That’s the tactic being employed by Mayor Kenney, desperate to win an extortionate tax on sugary beverages to pay for his pre-K and other programs.

    Before dealing with the latest nonsensical smoke screen, I have to stop and wonder if this guy, who spent more than two decades on City Council, and who himself opposed two previous soda taxes, failed to line up the required majority of nine votes. Wouldn’t that be political naiveté?

    No one’s done a hard vote count yet, because most Council people are holding their cards close to their vests, but what kind of an idiot would Kenney be to not make sure he had the votes before launching this campaign?

    We’ll find out in the weeks ahead.

    Oooh, scary. (The mayor’s office hires lobbyists.)

    At a Wednesday rally Mayor Kenney (channeling his inner Bernie Sanders) complained “there’s a lot of money being made off the backs of poor people.”

    So now if you sell to the poor, you’re evil? How about if you hire them, as Big Soda does?

    It got worse: “They’ve been taxing the poor for generations, and what we’re looking to do is take some of that profit and put it back into the neighborhoods.”

    News flash: It’s the city that’s been taxing the poor (and everyone else) for generations and Philadelphia already has a higher tax burden than Boston, New York or Chicago. The city that loves you back.

    Remember, too, Big Soda – and everyone else – already pays taxes. They’re not riding free.

    Kenney brought along NAACP president Minister Rodney Muhammad for moral support and got what you’d expect. “"A tax on these beverages at the point of distribution is a painless contribution” to universal pre-K," Muhammad said.

    If the Minister thinks the distributor will swallow a tax so large it doubles the cost of a large soda, he needs a reality check.

    He also complained soda companies target poor communities with their marketing. He’d be complaining if they didn’t advertise to poor communities.

    Over the weekend, Kenney got hammered because he hadn’t done his homework and didn’t realize the tax on fountain drinks was 4.5 cents per ounce, 50 percent more than bottles. That’ll be fixed, we are told.

    Kenney said opponents are using that mistake to discredit him. “They have nothing else to hammer,” he said.

    Nothing else?

    Like it being the highest tax of its kind to ever be proposed? That it targets a single industry to pay for programs that benefit everyone? That the tax is projected to kill jobs? That it hurts consumers?

    Naw, there’s nothing there to complain about.

  • Philly.com Column - March 15, 2016

    Byko: Soda tax explodes in Kenney's face

    SOMEBODY SHOOK up the soda can and it exploded in Mayor Kenney's face.

    On Saturday, the Inquirer reported a major flaw in the soda tax requested by Mayor Kenney: The tax on fountain drinks, which had never been mentioned, was 4.5 cents an ounce, 50 percent higher than the 3 cents-per-ounce tax he had been talking about. Ooops.

    (Author's warning: Many numbers ahead.)

    The soda tax was to pay for several desirable programs, such as universal prekindergarten and upgrading parks and rec centers, on Kenney's to-do list. Clearly, he gave those ideas a lot of thought.

    Just as clearly, he didn't give much thought to the mechanism for paying for them - a regressive tax targeting a single industry that arguably will strike the poor the hardest.

    A regressive tax from a progressive politician. We've heard that tune before.

    Calling the tax "extortionate," it will be "imposed on the people universal pre-K is supposed to help, lower- and middle-class," John Longstreet, president and CEO of the Pennsylvania Restaurant Association, told me.

    When it comes to Philadelphia budgetary innovation, you can count on creativity in dreaming up new things to tax. Remember the attempted lap dance tax?

    The soda tax, pegged at 3 cents an ounce (plus the hidden 4.5 cents at the fountain), sits atop the existing 8 percent sales tax.

    As a councilman, Kenney twice voted against the soda tax when proposed at 2 cents an ounce by Mayor Nutter. With Mixmaster Mike a fading memory, Kenney disinterred the already-rejected tax with a brilliant twist - let's make it 50 percent higher!

    That's like a fast-food store admitting its cheeseburger is unhealthy and then adding a quarter-pound of bacon to fix it.

    Does three cents an ounce sound like a lot? In my neighborhood grocery, I saw a 20-ounce bottle of Pepsi for $1.89. Add a 60-cent soda tax and the total is $2.49, a 31.7 percent increase.

    A 67-ounce bottle of Coke was $1.99. Kenney's soda tax would add $2.01 to the price, bringing it to $4, more than doubling the cost. Does that sound small?

    "Damn! You caught us," Kenney spokeswoman Hitt did not tell the Inquirer when the extra levy on fountain drinks was discovered. It was a mistake and would "very likely" be amended.

    Kenney's out-of-whack proposal used Nutter's math. They cribbed Johnny's homework. Didn't anyone check it out?

    "The legislation was reviewed thoroughly," said mayoral spokesman Mike Dunn. Just not thoroughly enough.

    One difference: Nutter's tax was to be applied at the retail level. Kenney's is applied to the distributors, but they will have to pass all or most of it to consumers.

    The tax is not only the highest ever in the nation, but "the mayor has not carefully considered the unintended consequences," such as losing other items people buy with soda, commented Dave McCorkle, president of the Pennsylvania Food Merchants Association, one of the groups Kenney likes to scold under the heading of "Big Soda."

    Whenever anyone opposes something, they stick a "big" in front of it.

    Big Soda. Big Pharma. Big Tobacco. Big Banks. Big Government. Big Labor. This might give Big Macs a complex.

    "Big Soda showed they're willing to use any excuse to deprive Philadelphians of pre-K, community schools and investment in our parks, rec centers and libraries," Hitt told the Inquirer, as if Big Soda pays no city taxes now. (Hitt doesn't talk to me.)

    Demonizing an opponent is a time-honored (and dishonorable) tactic, popularized by radical enthusiast Saul Alinsky. If you resist when the city singles you out for a tax, you are selfish, an unpatriotic ogre.

    Kenney said that villainous Big Soda "charges our citizens, small businesses and distributors much, much more than what it costs for them to make the soda."

    Will someone please explain capitalism to Mayor Kenney? Also, the word profit.

    It is different with the city. Philadelphia spends more than it takes in and passes the bill along to taxpayers.

    In his budget address, making it sound like a disease, Kenney said Big Soda hires lobbyists. (He neglected to mention that the mayor's office hires lobbyists.)

    Kenney made a remarkable admission in the budget address: He was, in effect, brainwashed.

    "The line that got me four years ago was the claim that this tax would hurt low-income, minority communities," Kenney said.

    That is his Achilles' heel. Tell him someone is being oppressed - doesn't matter if it's true - and he signs up for active duty.

    He now says he was snookered, that Big Soda victimizes people, you know, by making a profit.

    The "facts" haven't changed, Kenney's mind has.

  • Philadelphia Business Journal Column - March 14, 2016

    Kenney admin breaks down sugary drink tax revenue estimates, but opponents find flaws

    Mayor Jim Kenney's administration expects a 55-percent decrease in sugary-drink sales if a proposed 3 cents-per-ounce tax on sugar drinks in Philadelphia is passed. The methodology was broken down on Monday, but opponents say the city's assessment is flawed.

    Kenney's administration estimated the 3 cents-per-ounce sugary drinks tax will generate an additional $432 million for Philadelphia in the next five years based on a number of factors.

    The tax would result in a decline of 55 percent in sales in the first year the tax is implemented, followed by a 1-percent decrease in the years thereafter, Marisa Waxman, deputy revenue commissioner, said at the Monday briefing.

    "Even without a tax, we can expect a decline in sugary beverage consumption in Philadelphia over the coming years," she said.

    That 55-percent and 1-percent decline was built into the mayor's office's evaluation of the tax, which the administration expects will generate $432 million in additional tax revenue.
    The 55-percent decrease would be dependent on how much distributors passed on to the customers.

    "We believe market forces would play a big factor on that," said spokesman Mike Dunn. "It's possible that some or perhaps a larger portion of this 3 cents per ounce would be born onto the distributor."

    Kenney only took into account the 3 cents-per-ounce tax into the $432 million figure, and not the 4.5 cents-per-ounce tax on fountain drinks that was a holdover from Mayor Michael Nutter's proposal a few years back, since the goal is to level that out so fountain drinks would only be taxed at 3 cents-per-ounce.

    The 3 cents-per-ounce sugary drink tax proposal would fall "well short" of the funds estimated to be generated "because a tax increase and price increase on consumers that big has a huge effect on sales," according to Northbridge Group's Kevin Dietly, economic consultant to the American Beverage Association, who said people would travel outside of city limits to buy their sugary drinks.

  • Daily Caller Column - March 14, 2016

    Philadelphia Prepares For $400 Million Soda Tax Experiment

    Philadelphia Mayor Jim Kenney will set out plans Monday to impose a three cent soda tax on every ounce of sugary drinks.

    Kenney claims his tax plan will bring in $400 million over the next five years that will be spent on education initiatives and recreational facilities. But Kenney could face a fight back from the city council, which has been historically hostile to introducing soda taxes, rejecting two previous proposals from Kenney’s predecessor Michael Nutter.

    The proposed tax will be levied on distributors, but the the beverage industry claims the cost will be passed directly onto consumers — as it was in Berkeley, Cali.

    “Soda tax proponents are asking us to suspend normal assumptions about human behavior and simply assume that people who reduce soda consumption to avoid the tax, won’t just make their own sugary drinks and won’t replace the calories with other high-calorie foods or drinks,” said head of the risk analysis division at the National Center for Public Policy Research Jeff Stier.

    No credible studies to date show significant impacts soda taxes have on obesity. Sugar taxes are, in fact, inefficient and hit the poor hardest, according to a research note from the U.K.’s Institute of Economic Affairs (IEA).

    Even if people were to change their behavior in response to higher taxes, consumers will often just switch to cheaper brands or buy their groceries from cheaper shops. “This leads to the consumption of inferior goods rather than the consumption of fewer calories,” says the note’s author and head of lifestyle economics at the IEA Christopher Snowdon.

    The IEA points to the example of Denmark’s so-called “fat tax,” which was introduced in October 2011. The tax proved so ineffective, with people switching to cheaper brands or buying the products they preferred from across the border, that it was repealed in January 2013. The tax was also hugely unpopular.

    “No impact on obesity or health outcomes has ever been found,” Snowdon writes. “Early evidence from Mexico suggests that a ten percent tax on sugary drinks led to an average daily decline in consumption of 36ml per person.”

    “As Tom Sanders, a professor of nutrition and dietetics, notes, this is the equivalent of 16 calories and is ‘a drop in the caloric ocean. Long-term reductions in total energy in the range of 300-500 kcal/d are probably needed to prevent obesity.'”

    Snowdon concludes by citing a systematic review of 880 studies that found “the public health case for using economic instruments to promote dietary and physical activity behavior change may be less compelling than some proponents have claimed.”

  • Philly.com Letter-to-the-Editor - March 13, 2016

    Letter: Don't choke on higher soda prices - go to Jersey

    Don't choke on higher prices - go to Jersey

    Mayor Kenney is proposing to tax distributors of sugar-sweetened beverages at 3 cents per ounce. If the full amount is passed along to consumers, the tax on a 12-pack of soda would be a whopping $4.32. Grocery shopping in Philadelphia is about to get really expensive.

    For Philadelphians worried about their grocery bills going up: New Jersey is open for business. We're only a short drive away, and you can buy your favorite beverages here for half the cost. While you're here, stay and do all of your shopping - our sales tax is lower. And you can fill up your gas tank for a lot less.

  • Philly.com Column - March 11, 2016

    Proposed soda tax is higher for fountain drinks

    Mayor Kenney made waves this month by proposing the highest sugary-drink tax in the nation - three cents per ounce.

    But closer scrutiny of his plans shows the administration is aiming even higher when it comes to fountain drinks, served across the city at restaurants, stadiums, convenience stores, and theaters.

    The city wants to tax those at 4.5 cents per fluid ounce.

    The higher rate, uncovered through an analysis of the soda-tax legislation introduced to City Council last week, came as a surprise to groups already arguing that three cents is too much.

    "We certainly don't appreciate being blindsided with this on the back end," said Melissa Bova, director of legislation for the Pennsylvania Restaurant Association, whose members mostly serve fountain drinks. "For us, it's really frustrating."

    The Kenney administration has pegged several key initiatives, including universal prekindergarten, to passage of the sugary-drinks tax, which it estimates would reap $400 million over five years.

    In rolling out the plan this month, and in describing it since, Kenney and his team have made no distinction between the rates for bottled and fountain drinks, saying the proposed tax was three cents per ounce.

    Responding to questions about the legislation's higher rate for fountain drinks, Kenney spokeswoman Lauren Hitt said Friday, "It's three cents per ounce on bottled drinks."

    At the same time, she suggested there might be wiggle room on the fountain-drink rate.

    "We are certainly open, and have been open, to hearing from all sides of the debate on this," she said.

    While bottled drinks are mainstays at many of the city's corner and grocery stores, other businesses rely heavily on fountain drinks - think Wawa, the Wells Fargo Center, Wendy's. An economist hired by the American Beverage Association to review Philadelphia's proposed tax estimated that about 20 percent of the city's total sugary-drink sales come from fountains.

    The separate rate for those drinks can be found by crunching the numbers in Kenney's legislation, which lays out different rules for bottled beverages and the syrup used in fountain machines.

    The bottled drinks would be taxed at three cents per ounce. But the syrup would be taxed at 27 cents per ounce. That ounce of syrup, when mixed with water in a standard fountain machine, yields six ounces of soda. Thus, each ounce of fountain soda would be taxed at 4.5 cents.

    "Because people use basically the same equipment whether you're sticking Dr Pepper in it or Coke . . . [manufacturers] all kind of stick with the same mix ratio," said economist Kevin Dietly, who does analyses for the beverage industry and has reviewed the Kenney proposal. "If you purchase a gallon of syrup, you're doing so with the intent of being able to produce six gallons of beverage."

    The city is in mostly uncharted waters by proposing a soda tax - only Berkeley, Calif., has successfully enacted such a levy - and even further into those waters by proposing to tax fountain and bottled beverages at different rates.

    Berkeley taxes all sugary drinks uniformly. That city calculates the tax on fountain syrup based on how many ounces of drink it would yield, per the manufacturer's instructions.

    At face value, Philadelphia's proposed tax could add 36 cents to the cost of a 12-ounce can of soda - and 54 cents to the cost of a fountain drink of the same size.

    But because the tax would be levied on distributors - not at the point of sale - it's not immediately clear how much of the increase would be passed on to consumers.

    A study done three months after Berkeley's one-cent-per-ounce tax took effect showed that on average, consumers there were paying about half of the increase.

    Bova, of the restaurant association, said she expected some Philadelphia restaurants would pass the entire cost on to consumers while others would absorb a portion. But, she said, because restaurants' profit margins are so slim, its unlikely any would be able to eat the entire increase.

    Noting that Philadelphia already has a 10-percent tax on liquor sold by the drink, Bova said the city is unfairly targeting restaurants.

    "This is a raw material for our business. This is something we have to purchase," she said. "So to tax us at a higher rate certainly doesn't make any sense."

    Others, too, said they were unaware until recently that the plan would tax fountain drinks at a higher rate. Leaders of the newly formed No Philly Grocery Tax Coalition - composed of small-business owners, the American Beverage Association, and the union whose truck drivers deliver soda - said they only made the discovery when Dietly, the beverage group's economist, dug into Kenney's legislation.

    "For the businesses where fountain drinks are a mainstay, this will be another blow which will ultimately result in decreasing tax revenue to the city should the tax be enacted," Larry Miller, the group's spokesman, said in a statement.

    As for how the city settled on a 27-cent tax on each ounce of syrup for fountain drinks, Hitt pointed to the sugary-drink tax legislation twice proposed by Kenney's predecessor, Michael Nutter, and twice rejected by City Council.

    That legislation, too, set a higher rate for fountain soda - though the distinction also was not highlighted by Nutter's administration or publicized at the time.

    Asked Friday if the Kenney administration realized Nutter's formula resulted in a higher rate for fountain soda, Hitt said only that officials felt "precedent had been set" and knew the rate would be discussed during Council's budget hearings.

    She added that administration officials are open to discussion on the fountain-soda rate, because lowering it wouldn't necessarily change their revenue projection of $400 million from the tax over five years.

  • Philadelphia Business Journal Column - March 11, 2016

    Op/Ed: Why Jim Kenney's soda tax is a very bad idea

    Here we go again.

    Mayor Kenney is trying to reach into the pockets of ordinary Philadelphia families to help pay for a vast, $1 billion expansion of city government.

    If you’re feeling a sense of déjà vu, that’s because this is the third time in six years that a Philadelphia mayor has pursued a grocery tax to fund city programs.

    The previous two times, a broad-based coalition that included small business owners, labor and more than 30,000 ordinary Philadelphians banded together to reject this ill-considered proposal.

    The same coalition is now coming back together to say that this tax is wrong for Philadelphia because it would hurt the most vulnerable Philadelphia families and cost jobs.

    The mayor’s proposal, which would levy a 3-cent per ounce tax on sugar sweetened beverages, would increase the cost of a 2-liter bottle of soda by $2.04. Think about that: The proposed tax rate is so high that consumers would be forced to pay more in taxes than they would for the product itself.

    If implemented, this tax would hit Philadelphians in every aspect of their lives – making it more expensive to grab a bite at a convenience store, go to the movies or catch a Phillies game.

    Even more damaging, it would raise grocery costs for poor Philadelphians. While wealthier Center City residents would begin driving over the Ben Franklin Bridge to shop in Cherry Hill to avoid this onerous levy, poor families in Hunting Park who don’t own a car will be stuck paying vastly higher prices for common household goods.

    At the same time, this proposal would cost jobs – from the Teamsters who transport these products to stores and small businesses that rely on drink sales to make ends meet. Stores in “food deserts,” -neighborhoods without a full-service grocery store-, operate on small margins and will not be able to absorb this drastic new tax burden – especially after weathering substantial property tax and sales tax hikes in recent years.

    These jobs often provide ladders of opportunity for entire families in some of Philadelphia’s poorest neighborhoods to enter the middle class. Both small businesses and poor Philadelphia families are already contending with recent gas rate increases, as well as a proposed 11-percent water rate hike. If Mayor Kenney wants to follow through on his campaign promise to invest in our neighborhoods, then he should support these business owners – not punish them.

    Kenney is proposing an ambitious first-year agenda. But important proposals like expanding universal pre-Kindergarten programs and rehabilitating dilapidated fire houses and police stations should not rely on such an unstable funding source as a tax on basic groceries.

    As corner stores and bodegas across Philadelphia close their doors and middle class Philadelphians shift their buying patterns to the suburbs and South Jersey because of this tax burden, it is difficult to believe that the City would raise the $400 million over five years that is needed to properly fund Mayor Kenney’s initiatives.

    In fact, the mayor’s own budget proposal acknowledges that consumption is expected to drop if this tax is imposed, resulting in declining revenue over time.

    Early estimates suggest that tax collections will fall more than $120 million short, putting these programs in jeopardy.

    Much of Mayor Kenney’s budget proposal rests on the city issuing a series of bonds to cover capital improvements in city-owned buildings and in parks and recreation facilities. These bonds would be guaranteed by revenue raised from this proposed tax on Philadelphian’s beverages. But the municipal bond market may feel exceedingly uncomfortable underwriting debt backed by such an unstable and untested revenue source.

    Instead, the mayor should look to tried-and-tested revenue sources that will support these important programs for years to come.

    He might start by tackling the city’s broken tax collection process. Philadelphia’s real estate values should be properly and regularly reassessed to capture growth in the city’s tax base. This is standard practice in other cities and would enable the city to take advantage of Philadelphia’s ongoing real estate boom.

    Mayor Kenney should also begin aggressively pursuing tax delinquents, who collectively owe the city a staggering $1.17 billion in back taxes, interest and penalties. Why should Philadelphia families have to pay more when the city is leaving so much money on the table?

    We are confident as the mayor’s proposal is thoroughly vetted by City Council in the coming months, the flaws underlying this regressive tax plan will become clear. Ordinary Philadelphians have said time and again that this tax is unfair to families, and we are confident that their voices will prevail.

  • Philly.com Column - March 10, 2016

    Commentary: Teamsters say vote 'no' on drinks tax

    Mayor Kenney’s proposed three-cents-an-ounce tax on sugary drinks is difficult to swallow, especially for the city’s poor, small shop owners and grocers, as well as for the Teamsters Union drivers, salesmen, merchandisers, account representatives, and soda bottling plant workers I represent.

    The regressive tax, which City Council already rejected twice under the previous mayor (including two “No” votes by then- Councilman Kenney), is now being spun by the administration as the only way it can afford to pay for its ambitious new proposals, which is simply untrue.

    Once again, Philadelphia’s government is unfairly targeting one industry with this onerous tax.

    If enacted, the sugary drink tax will disproportionately hurt hard-working, middle-class families and the working poor of the city. City officials continue to exhibit an alarming lack of understanding of the economic consequences of this tax in dismissing the Teamsters’ belief that the tax will cost our membership jobs in an already weakened beverage industry and a down national economy.

    If this ill-considered tax is passed, the cost of sugary drinks — soda, ice tea, fruit juice, sports drinks, and energy drinks — will more than double in cost. People will stop buying the products or drive to the suburbs to purchase them (much as they’ve done to avoid the city’s cigarette tax). City stores will stop stocking the products, soda companies will move fewer products, and Teamster drivers and industry support personnel will lose their jobs.

    Beverage industry statistics show that when soda prices rise 10 percent, sales drop 8 to 9 percent. Reductions in sugary drink sales mean job losses, from bottling plant workers to Teamster delivery drivers. Our best estimate is that as many as 2,000 jobs will be lost in the region if this tax is passed. Any projected job gains being touted by the city through the implementation of new programs funded by a tax will be more than offset by the many job losses caused by the tax. Philadelphians are already burdened with among the highest taxation rates in the country. When does it end?

    And our concern isn’t just about the adverse impact on Teamster members, Supermarket employees, convenience store workers, and small-business owners who sell sugary drinks in their stores or restaurants will also be affected. There are thousands of family-sustaining, middle-class Philadelphia jobs in beverage production, supply, distribution, sales, and retailing that depend on a healthy beverage industry.

    The loss of any of these jobs would only further erode the city’s tax base. Teamsters Local Union 830 represents more than 3,600 Philadelphia members in the soft drink and brewery industry. These hard-working, tax-paying city residents do not deserve to have their jobs placed in jeopardy because of a misguided attempt to fund new programs solely by taxing the product they produce and deliver.

    Worse still, the sugary drinks tax is discriminatory. Taxing one product and one industry, to the exclusion of numerous items containing similar sugar-based ingredients, is simply unfair. The tax would not be imposed on snack items such as ice cream, candy, cookies, cupcakes, Popsicles, doughnuts, or other high-sugar foods. Instead, this tax would unjustly target and burden the beverage industry alone.

    It’s also interesting to note that the consumption of sugary beverages nationwide has been steadily declining for several years. And nowhere has that decline in sales been steeper than in Philadelphia, calling into question the accuracy of the revenue projections derived from the tax by the Kenney administration.

    Philadelphia consumers simply are not drinking as much sugar-sweetened beverages these days. You can bet the farm that, if this burdensome tax is passed into law, consumers who want sugary beverages will buy them outside the city.

    On behalf of more than 3,600 Teamsters, many of whom are dependent on the beverage industry for their livelihoods, I respectfully ask the members of City Council to vote against the sugary drinks tax. It would be an additional financial burden on families and small-business owners already struggling to make ends meet.

  • Press Release – March 3, 2016

    Local coalition to fight against regressive grocery tax that hurts small businesses and low-income residents

    Community leaders, small business owners, labor and citizens are banding together to protect working families and our local businesses from the regressive grocery tax proposed today for the city of Philadelphia.

  • Al Dìa News Editorial – March 3, 2016

    The syntax of sin tax

    Mayor Jim Kenney has announced that he will be proposing a soda tax to fund costly city projects including an overhaul of the city’s parks and recreation centers. The tax which would add 3¢ per ounce (making the tax on an 8 oz. can 24¢ and a 16-oz. bottle 48¢) is what is commonly known as a “sin tax.”

    Sin taxes are often levied items that are legal, but considered harmful or undesirable — cigarettes, candies, alcohol, fast food, etc. — and rationalized not only by the revenue stream they create but by the well-being they purportedly promote by making it more difficult and more expensive to continue consuming those products. Unfortunately, sin taxes have a disproportionate impact on lower-income and poor people. This is simple math — the more things cost, the less your limited income will buy — though it is rarely framed that way.

    The syntax of sin taxes — that is, the connected system and arrangement of the elements involved — is one that seems to aim to make prohibitive, or to preclude altogether, any small pleasures in the lives of the working poor and those who receive SNAP benefits. It is too often part and parcel of a punitively paternalistic way we deal with the poor. Consider: Wisconsin just passed a bill to prohibit food stamp recipients from buying shellfish, any potatoes other than white ones, and ketchup. In Missouri, shellfish is again prohibited, as are cookies, chips or cuts of meat designated steaks and, yes, sodas.

    Often we justify sin taxes by the good imposing them will do — i.e., curtailing soda or fast food consumption in those with the highest rates of obesity will result in better overall health. But, despite the fact that 40 percent of SNAP beneficiaries are white, the face of poverty in America is most often portrayed as black or brown, and there is both implicit racism and real aggression in the determination of what “sins” we societally punish, and which we don’t (think of the tax abatements we give to gentrifiers, or the tax break to fracking interests).

    This soda “sin tax” moreover, stands to jeopardize actual jobs at bottling plants in Council District 7 (see Max Marin’s article about the soda tax for more on this), one of the poorest councilmanic districts.

    Ultimately, while the benefits of increased revenue from a soda tax may be tempting for the city, we have to ask ourselves who we are asking to bear its impact. If it is the 26 percent of Philadelphians who already live in poverty, its cost is much too high.

  • Tax Foundation Blog – March 3, 2016

    Philadelphia Mayor Proposes Gigantic Soda Tax

    Philadelphia Mayor Jim Kenney is expected to propose a large soda tax tomorrow when he presents his budget recommendations to the city council. The mayor expects that the tax, which would be levied at 3 cents per ounce, would raise $400 million over five years. Most of that revenue is earmarked for increased spending on prekindergarten education, the Wall Street Journal reported this week.

  • New coalition formed to fight regressive Philadelphia tax proposal

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