Philly soda tax to go under review in City Council hearing

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It’s an old argument that some on Philadelphia City Council thought was settled years ago. Councilmember Jim Harrity is resurrecting the idea that the city’s tax on sugary drinks actually costs the city revenue instead of raising funds.

On Thursday, City Council approved Harrity’s resolution calling for a hearing on the matter. He claims shoppers go outside the city limits to buy soda and sugary drinks for less, leading them to also buy their groceries in the suburbs, as well.

Philadelphia receives about $75 million a year in revenue from the soda tax, according to city officials.

Harrity’s move is the latest challenge to the tax since its passing in 2016, despite vocal opposition to the tax from the soda industry. In 2018, the Pennsylvania Supreme Court upheld the tax against claims that it illegally duplicated the sales tax already applied to drinks.

Harrity claims that the shopping exodus has led to the loss of tax revenue and union jobs, with delivery companies and supermarkets cutting staff.

“I think that we’ll see that we’re actually losing money on the soda tax,” Harrity said. “This is really just a tax on the poor because the only people that actually are buying the soda in Philadelphia are those that don’t or can’t afford a vehicle. Most are seniors and in poor families.”

Harrity lives just a block from the intersection of Kensington and Allegheny avenues, and believes his neighborhood and others like it are becoming food deserts because stores are closing under the weight of the tax.

“My neighborhood, it’s a very low-income neighborhood, my neighbors travel outside the city to get their stuff,” he said. “They may go to the supermarket for something they need for dinner at night, but for the most part, they’re going out once a month or every two weeks, to the county, Bensalem, places like that and buying their soda. And while they’re there, they’re buying all their groceries.”

The argument has been the same ever since the tax was approved by City Council, mostly pushed by the unions and supermarket owners.

Council President Kenyatta Johnson said he voted for the tax and would not support its repeal, but he said council members have a right for a hearing if they want one.