Philly beverage tax unfairly burdens the poor, Pa. lawmakers contend

Hands off my almond milk, Pennsylvania Sen. Anthony Williams is telling Philadelphia Mayor Jim Kenney.

Williams and more than 30 other state lawmakers have filed a friend-of-the-court brief attesting to what they see as Kenney’s unlawful and regressive 1.5-cent-per-ounce levy on sweetened beverages.

“Personally, I’ve noticed the uptick,” Williams said of the cost of beverage purchases in Philadelphia. “I don’t really buy that much soda, but I do buy juice, and I do buy almond milk.”

(Almond milk, rice milk and cashew milk with added sugar are taxed, but unsweetened milk substitutes are not.) 

Many of his constituents, too, he said, are feeling the pinch of the “soda tax.”

“Restaurant and bodega and neighborhood stores and supermarkets. There are clerks, who now have their hours reduced,” Williams said. “I have truck drivers who now are seeing their hours decreased.

“We, unfortunately, know the demographics of those who are targeted, and those who are paying the bill — those who can’t move around and those who can’t get outside the city of Philadelphia are paying,” he said.

The mayor’s office disputed Williams’ characterization, however.

The tax has supported nearly 90 pre-kindergarten providers to expand, which in turn has helped low-income parents who were previously paying childcare fees, Kenney Spokeswoman Lauren Hitt said.

“I don’t know how you can say this tax is hurting the poor when for years the soda industry targeted low-income, minority Philadelphians and made millions off of them, without giving anything back,” Hitt said. “Now, the tax will put $91 million annually into these communities.”

Since passing in City Council in June, the controversial tax has been buffeted by a legal attack from the American Beverage Association, but has so far survived those broadsides.

An appeal is currently pending before the Commonwealth Court in Harrisburg.

The signers of the letter reiterate points raised formerly by the soda industry’s lawsuit: that consumers are now allegedly being taxed twice, and that since the levy is based on volume, it’s an inconsistent — and therefore unlawful — tax.

The soda tax targets distributors, a technical distinction that the city says makes it beyond legal reproach since it does not fit the state’s formal definition of a tax. 

The city has argued that it’s up to distributors of soda and other sweetened drinks whether they pass on any of the tax to consumers; opponents say pushing off most of the cost to consumers is all but guaranteed.

It’s also the start of a slippery slope, the brief argued, saying it could lead to the passage of other taxes.

“It is not unrealistic to expect that next year there will be a ‘candy tax’ based upon volume in Philadelphia, a sweetened beverage tax based upon volume in Harrisburg, and a ‘snack/cookie tax’ based upon volume in another cash-strapped city,” according to the brief.

The brief contends that taxing sweetened beverages could hurt state sales tax collections as more consumers choose to purchase drinks outside the city, an argument city attorneys dismiss as unfounded.

Kenney, in response, stated the lawmakers who endorsed the brief are more than welcome to visit some of the city’s expanded pre-kindergarten programs and recreation centers, which are being supported by the millions of dollars in revenue the tax is expected to generate.

If they take Kenney up on the offer, the mayor said, visitors should “tell our kids they must continue to wait for this desperately needed funding.”