In the News
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. email@example.com
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