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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.

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