State legislators push back on Philly soda tax

Three dozen state legislators filed a brief Monday calling for Commonwealth Court to overturn Philadelphia’s sweetened beverage tax.

The 13-page brief calls the tax illegal and argues that it could have a negative impact on the state’s budget.

“The tax is not constitutional, violates the law, and will result in lost sales tax revenue collection into the commonwealth’s general fund,” the brief says.

The sweetened beverage tax adds 1.5 cents per ounce to the cost of most sugary and diet beverages. It went into effect Jan. 1. The revenue generated is to fund an expansion of early-childhood education and a number of other initiatives, including the rehabilitation of hundreds of recreation centers and playgrounds.

The beverage industry and some local restaurant owners sued the city, challenging the tax. In December, a Common Pleas Court judge dismissed the suit, paving the way its implementation. An appeal is pending in Commonwealth Court.

The tax, which is applied at the distributor level, is expected to generate about $92 million a year.

The brief filed Monday says other cities throughout the state might follow Philadelphia’s lead.

“Appellee and other cash-strapped cities such as Harrisburg, Chester, and Williamsport will use the appellee’s tax as a way to increase their revenues,” the brief says. “It is not unrealistic to expect that next year there will be a 'candy tax' based upon volume in Philadelphia, a sweetened beverage tax based upon volume in Harrisburg, and a 'snack/cookie tax' based upon volume in another cash-strapped city.”

The Kenney administration was dismissive of the brief, saying the 36 legislators who signed the brief don't represent the majority of the legislature. 

 "The amicus brief does nothing but parrot arguments by the American Beverage Association that were previously rejected by the Court of Common Pleas," city spokesman Mike Dunn said in an email. "The city remains resolute in our belief that Council had full authority to impose this tax."

The five state senators and 31 state representatives who are backing the brief include six Democrats and represent various parts of the state, including Philadelphia.

Sen. Anthony H. Williams, who represents Philadelphia and is one of the legislators who signed the brief, said he worries that the lower-income residents the Kenney administration is trying to help with the tax are the ones suffering because of it.

“It is having a very, very negative impact on the community that they thought they were going to help,” Williams said, noting that corner stores and supermarkets might have to shut down because of the tax.

Williams said that trying to come up with a way to fund prekindergarten and improving recreation centers is commendable, but a beverage tax isn’t the way to do it.

“The execution of it in using this particular tax is an experiment that needs to be stopped and rethought,” Williams said. “This tax is falling upon the poor.”

Williams said he did not know how the city should instead fund the pre-K initiatives. He said he hopes the mayor and City Council “analyze the data” on beverage sales numbers and figure out a Plan B.

City spokeswoman Lauren Hitt said that the city has no evidence that the tax is "falling heavily on the poor."

"The beverage industry targeted low-income communities with advertising disproportionately for decades and made millions off them, while offering only diabetes and obesity in return," Hitt said. "This tax will help combat those regressive diseases while investing in anti-poverty programs, like pre-K”

Dunn said also dismissed the argument that the tax could lead to a decrease in the state sales tax.

"Our economist demonstrated that the PhillyBevTax would have little impact on state sales tax revenue and under certain circumstances could actually increase state sales tax revenue," Dunn said.

Williams, who was one of Kenney’s primary opponents in the 2015 mayor’s race, said his position on the tax was not political.

“I don't want this to be seen as a moment where it’s me vs. the local administration and that's why I've been quiet this whole time,” he said.

Other state elected officials from Philadelphia who signed the brief include Democrat Rep. Angel Cruz and Republican Rep. Martina White. To read the rest of the names and the brief itself, click HERE.