Revenue generated by Philadelphia’s new tax on sweetened beverages tax is beating projections, Philadelphia officials said Thursday. But those returns still will have to grow substantially to meet targets for the year, they added.
In January, Philadelphia collected $5.7 million from the 1.5-cent-per-ounce tax, well above estimates as the program ramps up, said city finance director Rob Dubow.
“In our quarterly report, we had $2.3 million,” he said. “We knew there would be some growing pains and people had stocked up before the tax had going into effect, so we thought that the first month would be low.”
Pepsi salesman Chris Lemon said that success for the city has comes at a cost for those in the industry. Showing city officials his pay stubs for January, Lemon said, in his 10 years selling soda, he has never seen them so low.
“Last week, I got $382. The week prior to that, I got $220,” he said. “The week prior to that $261.”
Mayor Jim Kenney said he’s highly skeptical that sales in Philadelphia are down as much as distributors claim.
“I can’t comment on what I believe they are saying is not true,” he said. “I don’t believe it.”
The tax was implemented in January as a way of raising revenue for expanded pre-K in the city, as well as funding repairs and upgrades to libraries, parks and recreation. Industry groups and others are challenging the levy in court with the appeal of a Philadelphia judge’s ruling that the tax is legal.