Kenney slams Pa. proposal to replace Philly soda tax with sales tax hike

This March 16, 2017 photo shows a sticker alerting customers of the sugar tax posted by sweetened beverages at the IGA supermarket in the Port Richmond neighborhood of Philadelphia.

This March 16, 2017 photo shows a sticker alerting customers of the sugar tax posted by sweetened beverages at the IGA supermarket in the Port Richmond neighborhood of Philadelphia. (AP Photo/Matt Rourke)

Philadelphia Mayor Jim Kenney is denouncing a proposal under consideration in Harrisburg to replace the city’s controversial beverage tax with an increase in the sales tax charged in the city.

Currently, purchases in the city are subject to an 8 percent sales tax, considerably higher than the 6 percent tax levied elsewhere, all of which goes to the state treasury.

Opponents of the 1.5 cent-per-ounce tax on sweetened beverages would like to replace that levy by raising the city sales tax to 8.25 or 8.5 percent.

“This we figured would be a good compromise that would bring in the revenue that the mayor says that he needs to support programs that everyone supports, while also giving relief to the local businesses and workers who have been negatively impacted by the beverage tax,” said Anthony Campisi, a spokesman for opponents of the tax.

Funds from the beverage tax are targeted for expanded pre-K education and programs to rebuild the city’s parks, libraries, and recreation centers. A legal challenge to the tax was rejected by the Pennsylvania Commonwealth Court, and it’s now before the state Supreme Court.

Under the proposal being considered, language raising the city sales tax would be amended into an existing bill to ban the city or any local government from imposing a tax on food, beverages or their containers.

Kenney and City Council President Darrell Clarke said in a letter to Philadelphia lawmakers that raising the sales tax “would have a devastating impact on the retail industry that the beverage industry lobbyists now claim is caused” by the beverage tax.

“The increased tax would drive individuals over the city border to purchase goods and services and would have a serious impact on the city’s retail and hospitality sectors,” the letter said.

Campisi said in an interview that the idea of replacing the beverage tax revenue with a city sales tax hike was proposed “by a group of state lawmakers,” whom he declined to name.

Steven Miskin, a spokesman for the Republican leaders of the state House, said that the House leaders were not aware of the proposal.

Campisi said the lawmakers are prepared to work out a compromise on the tax, but that Kenney “is refusing to negotiate.”

Kenney said in a brief interview that he remains committed to the beverage tax, which poor and working people can avoid paying.

“This is a tax on a product that doesn’t have to be purchased and is bad for you,” he said.

The coalition against the beverage tax is running a new radio ad in which Shop Rite executive Jeff Brown says his ability to hire formerly incarcerated people and give them a second chance is undermined by the “unpopular beverage tax.”

The ad urges listeners to support the state legislation, which would take away the city’s authority to levy such a tax.

Tom MacDonald contributed to this story.

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