Debate bubbles up over Philly plan for sugary drink tax

In Philadelphia, the debate over Mayor Jim Kenney’s proposal for a 3-cents-per-ounce tax on sugary drinks is heating up.

So far, more than 1,000 people have signed an online petition paid for by the American Beverage Association, a trade group representing the soda industry, on behalf of a coalition fighting the tax. The group includes small-business owners, soda bottlers and the union representing delivery truck drivers.

This week, the American Beverage Association has also started running radio ads calling it a “grocery tax on the kind of drinks we buy for our family.”

Kenney is marshaling his own coalition in favor of the tax, which includes small-business owners, Philadelphia NAACP head Rodney Muhammad, the Philadelphia teachers union and the union that represents janitors and other service workers. 

At a news conference Wednesday afternoon at a recreation center in Olney, the mayor pushed back against “big soda” and the argument that the tax would hurt the very residents he says he’s trying to help.

“They’ve been taxing the poor for generations,” Kenney said of sugary beverage companies, which have targeted marketing at low-income people and minorities. “And what we’re looking to do is to take some of that profit, to put it back into the neighborhoods that have been their biggest customers, to improve the lives and opportunities for the people who live there.”

Kenney resisted the notion that if the tax were passed along from distributors to retailers to consumers, it could disproportionately affect poor residents. 

“If we raise real estate taxes to pay for this, people don’t have a choice,” he said. “At least they have a choice” to buy water or diet sodas and teas.

The Kenney administration claims the tax would bring in $432 million over five years — although opponents say it would be more like $279 million — to pay for universal pre-K, community schools and a major overhaul of public parks, recreation centers and libraries.

Muhammad called it a “painless tax” on companies that still makes billions of dollars in profits, despite a 20-year decline in sales.

But the mayor and his coalition have yet to convince people including Maribel Alago, who was loading bottles of a sugary sports drink into her cart at a ShopRite just a few blocks away from the news conference. Alago said she lost her job with a passport courier company a few years ago and groaned at the thought of paying more in taxes.

“Like the cigarettes, they put a tax and what happened to that for the schools and all that?” she said. “Now another tax? I don’t know.”

But another shopper, Nancy Jean-Simon was more optimistic. She was pushing a cart full of lemon-flavored seltzer, which would not be subject to the tax, but said her son is a big soda drinker.

“If it’s for education, personally, I don’t mind paying for it,” Jean-Simon said.

Ultimately, the fate of the tax will be in the hands of Philadelphia City Council, which is already being bombarded by both sides of the debate. Soda industry donors gave more than $73,000 to Council candidates during the 2015 election cycle.

Kenney, who was a councilman at-large for 23 years, said his administration is already meeting with his former colleagues. On Wednesday, he urged supporters to “gently” ask Council members to pass the tax, which failed twice under former Mayor Michael Nutter.

“It’s going to be an air war, and it’s going to be a ground war, and there are going to be lobbyists out the wazoo,” Kenney said. 

This is a corrected version of this story. A previous version incorrectly stated who created the online petition and is running radio ads paid for by the American Beverage Association.