Philadelphia has a new first: the city is using a tax on soda to support an expansion of early education and other public programs.
Last month, “The City Council gave final approval to a 1.5 cent-per-ounce tax on sugary and diet beverages,” according to the local ABC television station.
“Only Berkeley, California, had a similar law. Soda tax proposals have failed in more than 30 cities and states in recent years. Such plans are typically criticized as disproportionately affecting the poor, who are more likely to consume sugary drinks.
“But Democratic Mayor Jim Kenney sold the council on the idea with a plan to spend most of the estimated $90 million in new tax revenue next year to pay for prekindergarten, community schools and recreation centers. Kenney says the tax will generate $386 million over 5 years.”
“Philadelphia’s tax will be levied on distributors. Only time will tell how much will trickle down to consumers. The tax could add up to 18 cents to the cost of a 12-ounce can, $1 to the cost of a 2-liter container, and $2.16 to the cost of a 12-pack. It will affect sodas, teas, sports drinks, flavored waters, bottled coffees, energy drinks, and other products.
“Exempt products include baby formula and beverages that are more than 50 percent fresh fruit, fresh vegetables, or milk. Beverages for which customers request sweetener or add it themselves (as at a coffee shop) are also exempt.”
The tax has won praise from former New York City Mayor Michael Bloomberg and from former Philadelphia Mayor Michael Nutter, who had proposed a soda tax in the past.
Here in Massachusetts in 2014, former Governor Deval Patrick also called for a tax on soda and candy, but the proposal didn’t gain traction.
There’s also interest in a soda tax in Oregon where “Upstream Public Health, a non-profit in Portland, filed an initiative called the ‘Children’s Health and Education Fund, earlier in June,” KOIN TV reports. “It would impose a one-cent-per ounce tax on the distribution of sugary drinks including soda, sports drinks and similar beverages.” The revenue would support a number of programs including preschool programs for low-income families.
But New America’s EdCentral blog warms, “Other cities should be cautious in following Philadelphia’s pre-K funding model. Although innovative, it may prove unsustainable depending on how people react. Others cities and states have found creative funding mechanisms that may prove more sustainable in the long-term. Denver, San Antonio, and West Sacramento fund pre-K through a voter-approved, dedicated sales tax. Salt Lake City used a pay-for-performance model, with an initial investment by Goldman Sachs [Full disclosure: there are questions about the methods of this experiment]. Seattle levies a property tax. San Francisco and D.C. fund their programs through set-asides. While none of these methods is perfect, they represent alternatives that may avoid the concerns raised above.”
Soda taxes have been opposed by stores and beverage companies. And critics of Philadelphia’s soda tax say they plan to challenge it in court.
However, Mayor Kenney is optimistic about the tax’s survival, saying, “We believe we’re on strong legal ground.”