A member of the board that serves as Philadelphia’s fiscal watchdog gave $25,000 to a campaign in favor of the city’s new tax on soda and sweetened beverages — a key component of this year’s city budget and five-year plan.
Michael A. Karp, vice chair of the five-member Pennsylvania Intergovernmental Cooperation Authority (PICA), was the sixth-largest donor to Philadelphians for a Fair Future, the private nonprofit that collected money to promote the tax proposed by Mayor Jim Kenney.
Karp’s was far from the largest check written to PFF — former New York City mayor Michael Bloomberg gave $1.6 million and Kenney’s own political committee gave $50,000. David Thornburgh, president of the good government group Committee of Seventy, said it calls into question whether Karp can objectively review a budget plan he spent money to influence.
“PICA’s intended to be an independent voice that ultimately approves the city’s taxing and spending plans and here was a proposal to change Philadelphia’s taxes,” Thornburgh said. “Obviously, there were some folks who felt one way or the other, but the fact a member of this body was supporting one side just feels a little odd.”
A conflict of interest?
Karp said he supports the programs the revenue would fund, including expanding pre-K seats, and discouraging the consumption of sweetened drinks.
However, as a member of the PICA board, he must vote on whether to approve the city’s budget and five-year plan. Without that approval, the city can’t receive state funding. Karp, a member of PICA since 2000, said he does not see his pro-tax donation as a conflict of interest.
“We’re not recommending or supporting any specific program,” he said. “We’re looking only at whether the total of all revenue numbers versus the total of all expenditures come in with a balanced number.”
Karp’s donation is listed in PFF’s recent lobbying disclosure report under the name of a limited liability company, 1484 Brockett Road Associates, a company registered in Georgia under Karp’s name.
Much of the debate around the sweetened beverage tax centered on whether it would be a sustainable revenue source for the programs it was proposed to fund: universal pre-K, creating community schools that offer services such as healthcare, and a major overhaul of the city’s aging parks, recreation centers and libraries.
“To me, the whole thing was great public policy in every way,” Karp said, insisting he is able to support those initiatives, while scrutinizing the revenue projections from the mayor’s office.
“If our staff at PICA comes back and says, ‘Gee, the numbers that he’s presented in the aggregate don’t match because… he’s overstating revenue or understating expenditure,’ then we would go back and say, ‘We want you to revisit these numbers,'” he said.
He said he still plans to vote on the city’s budget and five-year plan at PICA’s next meeting on Aug. 31.
‘I’ve always been against soda’
A spokesperson for PFF did not respond to a question about whether Mayor Kenney asked Karp for the donation.
When asked if the mayor approached him, Karp said he was “aware of the campaign” and that his primary motivation was a sense of obligation to his students at Belmont Charter School, which he founded in 1997.
“I’ve always been against soda,” he said. “It causes obesity, tooth decay. We all know that.”
Karp said he did not serve soda to his own children, except on special occasions, such as birthday parties. His distaste for the drink is on the public record stretching back to 2000 when he was a member of the city’s Board of Education.
Karp voted to reject a deal with Coca-Cola Bottling Co. of Philadelphia, which offered the district $43 million in exchange for becoming the exclusive beverage provider for the public schools.
At the time, he questioned the impact the deal could have on school children’s health.
“We have a responsibility to these children,” Karp told the Philadelphia Inquirer.
Karp, a frequent contributor to Republican and Democratic political candidates, founded University City Housing, a real estate firm based in West Philadelphia.