Primary school: The soda tax | Editorial

The May 21 primary will not only help decide the composition of City Council and the mayor’s and other offices. Voters will also be signaling their views on some key issues facing the city. The Inquirer Editorial Board continues our Primary School series, designed to take a deeper look at some of these issues.

The issue: Commonly known as “the soda tax,” the Philadelphia Beverage Tax — a 1.5-cent-per-ounce levy on sweetened beverages such as soda, diet soda, iced tea, energy drinks, and some juice products — was one of Mayor Kenney’s signature initiatives. It went into effect Jan. 1, 2017 and was designed to help fund prekindergarten and community school programs, as well as help fund the rebuilding of recreation centers and park facilities in neighborhoods citywide. A March 28 data release by the Office of City Controller Rebecca Ryhnhart showed the tax yielded $149.2 million in its first 18 months. An April poll of registered voters conducted for The Inquirer showed more than half of respondents saying the tax is a failure that should be repealed. (An earlier poll by the American Beverage Association indicated that while most people disapprove, it seems unlikely to affect how people vote in the mayoral primary.)

The argument for it: Kenney and other supporters say the tax is key to fighting the city’s poverty rate of more than 25 percent. Early education, better recreational facilities, and healthier diets will help lift families out of poverty, supporters say. Some supporters citing the city’s high rates of obesity and diet-related diseases such as diabetes, also say the tax will encourage consumers to opt for healthier beverages, resulting in additional savings in health-care costs.

The argument against it: The American Beverage Association put $16.2 million behind fighting the tax between 2016 and 2018 and is spending $408,000 on “ax the bev tax” TV ads during the lead-up to the primary. The association and other opponents, including mayoral challengers Anthony Williams and Alan Butkovitz, argue that the tax is regressive because it falls most heavily on lower-income families — even though the tax is designed to help low income and other families. Some think the city could use its budget surplus to fund pre-K and other worthy programs,

What will happen if nothing changes? Kenney has shown no signs of relenting on the tax. As the tax becomes an accepted or, at least tolerated, fact of city life, Philadelphia residents who may be leaving the city to do their soda shopping may shift to the convenience of shopping closer to home. History shows that the city started taxing liquor by the drink in 1995 to similar levels of outrage, but the revenue from that tax continues to rise year after year and now exceeds $70 million.

The bottom line: The soda tax is a less-than-perfect instrument and may never yield either the cash or the level of improvement in health outcomes its supporters have predicted. But the tax is making money available for worthy educational and recreational efforts that can reasonably be expected to yield generational benefits. That is a major reason why we continue to support it.