Philadelphia proposes soda tax to overcome budget crisis

Coca-Cola and Sprite lovers beware, Mayor Nutter wants YOU to help solve Philadelphia's budget problems. Over the next five years the city faces a projected $500 million to $700 million fiscal hole. Today Philadelphians are getting a peek at what Mayor Michael Nutter will propose in his budget address tomorrow. WHYY's Elizabeth Fiedler reports it will include a two cent per ounce tax on sugar-sweetened beverages.

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Philadelphia officials say the sugar-sweetened beverage tax will finance obesity prevention programs, deter the consumption of unhealthy beverages, and generate revenue for the city.

Health Commissioner Donald Schwarz says Chicago already has a similar tax, and a number of states are also looking into it. Schwarz says there are also health reasons to tax soda, chocolate milk, energy drinks, and other sugar sweetened drinks.

Schwarz: There are about 60 million gallons of sugar sweetened beverages sold each year in Philadelphia. Which comes out to about half a liter per person, per day. At half a liter per person that's about 35 cents per individual – the cost of this to the individual per day.

According to the Administration's plans, the sugary drinks tax will add up to $77.2 million per year and will begin in January of 2011. A small fraction of that sum will be spent on anti-obesity programs. The rest will help the mayor balance the city's books.