Proposed Philly soda tax gets wide attention

Members of Philadelphians Against the Grocery Tax Coalition rally outside City Hall.

Hillary Clinton and Bernie Sanders have weighed in. Former New York Mayor Michael Bloomberg and a billionaire couple from Houston are writing checks. Tax wonks and health advocates from Seattle to Washington, D.C., are setting up Google alerts so as not to miss the latest news.

The debate over Mayor Kenney's 3-cents-per-ounce sugary drink tax, it seems, is reverberating far beyond city limits.

"In my circles, people are talking about Philadelphia constantly," said Marlene Schwartz, director of the Connecticut-based Rudd Center for Food Policy and Obesity, which supports such taxes.

Some experts say a win for Kenney in Philadelphia could be a tipping point for enacting soda taxes in other major metropolitan areas. That's good or bad news depending on where you fall on the issue.

But both sides are anxiously watching, particularly because of the unique pitch being used to sell the levy here. Rather than push it as a health measure to fight obesity, as done elsewhere, Kenney is offering his measure as a way to fund early childhood education.

He hopes that carrot will be enough for his proposal to avoid the fate of similar efforts nationwide.

Since 2008, 40 sugary drink taxes have been rejected around the country, two of them in Philadelphia. Only the left-leaning city of Berkeley, Calif., has passed such a tax.

This year, nearby Oakland will put a soda tax on the November ballot. San Francisco and Boulder, Colo., are trying to follow suit.

So far, the American Beverage Association has spent more than $2.6 million on an ad campaign to stop the tax here.

A City Council vote on the tax could come as early as June, and Kenney needs a Council majority to have it break his way. Three Council members have come out against the tax. The remaining 14 have yet to declare themselves.

"It comes down to 17 people to decide," as opposed to a voter referendum, said Jim Sullivan, senior editor at Beverage Business Insights. "And that does make it more interesting and more difficult for the groups looking to defeat the tax."

David Goldberg, marketing director for Action for Healthy Food, a Seattle-based nonprofit, says he thinks the opposite is true. "The soda industry tends to do better when what they need to do is move legislators," Goldberg said. "It's easier to put the squeeze on legislators behind the scene."

Goldberg sees this year, with so many looming proposals, as critical to the soda tax movement.

"This idea, when it was proposed by Bloomberg a decade or so ago, it was seen as a fringe idea," Goldberg said. "To see it come up in the presidential campaign, that was a watershed moment. It shows it's gaining more mainstream acceptance."

Clinton was visiting a North Philadelphia church last month when she voiced her support for Kenney's pre-K plan and the soda tax to pay for it.

Within 24 hours, Sanders issued a statement championing pre-K but denouncing the tax as hurting the less well-to-do. National pundits and columnists commented on their commentary.

Last week, it was announced that Bloomberg was personally donating funds for ads in support of the tax. Bloomberg adviser Howard Wolfson said the former mayor tends to jump into fights he thinks are winnable.

"Success begets success," Wolfson said, "I think if Philadelphia is successful, it will spur even more cities to look at this in a serious way, and I think a lot of eyes are on Philadelphia right now."

Texas billionaires John and Laura Arnold, who have supported sugary drink tax efforts in other cities, are also funding the pro-tax campaign.

Kenney, seated in his office last week, said Bloomberg's support was unsolicited.

"I don't run in Michael Bloomberg's circles," Kenney said.

He did, however, hire as his health commissioner Thomas Farley, who served in the same position in New York and led Bloomberg's unsuccessful fight to cap the portion size of sodas.

His staff communicates with legislators in Oakland and San Francisco. Kenney, however, says his focus is local.

"I care about Philadelphia," Kenney said. "I care about Philadelphia's children, our neighborhoods, our opportunities, and if other people want to adopt this, then it's certainly up to them and they'd have to fit it into their own model, experiences."

Anthony Campisi, a spokesman for the antitax coalition backed by the American Beverage Association, said the only national attention of note is the "outsider money coming in."

"We're the latest in a long line of these failed proposals," he said.

For all the debate back and forth, there is limited research on what impact a soda tax would have on jobs, small businesses, consumption rates, and health in a big city such as Philadelphia.

Carl Davis, research director at the Washington-based Institute on Taxation and Economic Policy, said that's one of the key reasons people are watching Philadelphia.

"Both sides argue using limited data," he said. "We're citing a limited number of facts here. Researchers and lawmakers and everyone else will be interested to see what kind of effects this will have if it's enacted."

Grover Norquist, an outspoken Republican and president of Americans for Tax Reform, had the boldest prediction.

"I think the soda tax issue in Philadelphia could end up costing Hillary Clinton the presidency," Norquist said, arguing it showed a shift on her stance on raising taxes on the poor.

"It will be front and center on the presidential campaign and people will be reminded Hillary's tax was approved or shut down in Philadelphia."



Staff writer Tom Fitzgerald contributed to this article.