The measure will charge 1.5 cents per ounce of diet and regular soda, iced tea, energy drinks, juice drinks with less than 50 percent juice, and other sugary beverages. That would add $1.01 to the cost of a 2-liter soda, 21 cents to a 13.7-ounce Starbucks Frappuccino bottle and $2.16 to a 12-pack of soda.
Philadelphia had twice tried and failed to put in place soda taxes based on the argument they would discourage unhealthy drinking habits. But this time, Philadelphia Mayor Jim Kenney (D), who took office six months ago, promoted the tax as a way raise desperately needed funds for community schools, renovations to community centers and parks and, most notably, universal pre-school. That aims to serve 10,000 students by 2020.
"It's easier to have children get pre-K," Kenney told the Associated Press on Sunday. "Americans generally reject other people telling them what's healthy for them, so we tried to stay away from that. Our intention was to reduce the level of poverty for our city, and we can do that through education."
New York University professor Marion Nestle, who has authored popular books on food and soda politics, said the move by the Philadelphia City Council was a "huge deal," and likely to be replicated in cities nationwide. Oakland, Calif. and Boulder, Colo., residents will vote on taxes this fall.
“This is a fabulous way to get revenue for revenue-starved cities,” Nestle said.
It’s not Philadelphia’s first tango with these taxes. The previous Philadelphia mayor, Michael Nutter, proposed soda taxes twice. Nutter has said his second attempt in 2011 was subverted by ABA’s $10 million donation to the Children’s Hospital of Philadelphia.
So, when Kenney proposed the tariff again in February 2016, the city was familiar with the debate. What differed this time was Kenney’s emphasis on boosting funding for education and community resources, as well as the the tax’s rate — 3 cents per ounce, which would have doubled the cost of some beverages.
Supporters of the tax ranged from groups involved in health care, education and business to law enforcement and labor unions. The Philadelphia Inquirer has published multiple editorials in favor of it. Those against the tax include the ABA, some local restaurants and grocery stores and the Teamsters Union, which includes beverage truck drivers.
Even Democratic presidential contenders Hillary Clinton, who has accumulated enough delegates to become the nominee, and Bernie Sanders have weighed in. Clinton supports its educational benefits, while Sanders says the tax burden falls unfairly upon the poor. He suggests raising taxes on the wealthy, instead.
Debate in Philadelphia has centered around the impact on the poor. Proponents of the tax said that the improvement to community resources and possible cutback in diabetes and other diseases linked to sugar consumption would hugely benefit the poor. The poor are most prone to those diseases and have the least access to early childhood education. And Philadelphia has many impoverished people — a third of its residents receive food stamps and nearly a quarter are deemed illiterate.
However, the ABA and its allies argued the tax was regressive. Poor people are more likely to drink soda, so the boost in price would take the biggest slice out of their budget. Some local business owners said they were concerned that would-be customers would stop grocery shopping or going out to eat in Philadelphia to avoid the tax.
To rally these concerns, the American Beverage Association launched a coalition called “No Philly Grocery Tax.” A orange-hued website has a grassroots feel; written in folksy cursive, one page reads, “Philadelphia families can’t afford to pay more at the grocery store!” One page of the website features videos of grocers discussing the financial hit the tax could have and droves of anti-tax protesters.
More than 15,000 Philadelphians and 1,500 businesses has pledged support to the coalition, said Larry Ceisler, a spokesman for the ABA. “It should never be thought of as just the beverage industry,” he said.
The mayor has responded with his own public opinion campaign. Philadelphia hosted children in City Hall toting crayons and signs demanding better pre-schools. It’s not known how much either side spent on the campaign.
Another thing that has helped the proposal is its legislative path. While typically public opinion has been important because soda taxes have been voted on as referenda, the Philadelphia one went through the City Council. Kenney only had to convince nine out of 17 council members to pass the tax.
And he did last Wednesday, after months of debates in local newspapers and competing television ads. The debate resulted in slashing the tax in half, but it’s still larger than the only existing city-wide soda tax. Berkeley started assessing 1 cent per ounce taxes on sugary beverages last year, where 77 percent of residents voted to pass the tax.
The final vote for the tax will come Thursday. It’s expected to pass, the Inquirer reports, but Big Soda is trying to raise one last concern, pointing out how some of the revenue of this tax will first go toward the city's general fund, not its preschool system and other promised initiatives. Critics say the mayor is using the soda tax to help the city’s bond rating, not the poor. Lauren Hitt, Kenney’s press secretary, said this claim was nonsensical; extra funds from the tax must go into the general fund until it can be used at the operating community centers.
“The only reason we didn't tattoo that on the bill when we presented it to City Council was that that's a normal monetary procedure,” Hitt said. “(Opponents of the bill) are using this to say, ‘They were lying to you.’ That's insane.”
She encouraged council members to “speak for themselves,” warning that some council members might be falling under the ABA’s influence.
While Ceisler said the Philadelphia success was largely a result of local politics, experts say Kenney’s strategy will likely be replicated nationwide. David Just, who studies nutrition and behavior economics at Cornell University, said that a soda tax that’s used to benefit the public good, rather than wag a finger at fizzy drink-lovers, is much likely to be publicly accepted.
Other advocates are comparing Philadelphia and Berkeley with those cities that began limiting cigarettes in the 1960s.
In any case, soda consumption is at a 30-year low. A majority of Americans say they try to avoid the sweet stuff — not the case as late as 2004. Bottled water is about to eclipse it as the nation’s most-consumed beverage, a study by Beverage Marketing found earlier this month.
And as consumers stop drinking on their own, interest in limiting sugary drinks further is rising. San Francisco law will place warnings on advertisements of drinks with added sugar, like soda.
“Soda companies are being hit from all sides,” Nestle said. “They can’t keep putting millions and millions of dollars in fighting this.”