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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.

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