Mayor Kenney reintroduces soda tax to help fund schools

Mayor Jim Kenney is reintroducing former mayor Michael Nutter’s already twice-failed soda tax, hoping the third time’s the charm.

Introduced during his March 3 budget address, he proposed a rate of three cents per ounce, which would only apply to sugary drinks. This means it would include bottled soda, fountain drinks, any bottle juice that has added sugar, energy drinks and sports drinks, but would exclude diet drinks.

The key alteration in the proposal is the branding of the initiative. When Mayor Nutter attempted to pass this tax in 2010 and again in 2011, “he introduced it to solve a budget hole or as a health program,” said Mayor Kenney’s Communications Director, Lauren Hitt. This time, however, Kenney is providing a clear direction for the tax money.

“We’re proposing to use the revenue to fund expansion of pre-K and community schools and investment in park rec centers and libraries,” Hitt added.

While Penn has refrained from commenting on what would be the largest tax on sugary drinks in the country, politically influential university alumni have not.

On Tuesday, former Pennsylvania governor, former Philadelphia mayor and 1965 College graduate Ed Rendell shared his skepticism toward the tax with CBS Philadelphia.

“I think the things that Mayor Kenney wants to use the money that would be generated by a soda tax for, like universal pre-K are absolutely, desperately needed,” said Rendell, who is also a Fels Institute of Government lecturer. But he also added that, “while it’s true that sugary drinks are a health problem ... so are cheeseburgers.”

Rendell's former chief of staff and chairman of Penn’s Board of Trustees, David L. Cohen expressed a similar view. Cohen, a 1981 Penn Law School graduate who has expressed his support of universal pre-K, has called on the Philadelphia business community to "wholeheartedly support pre-k and the means to fund it," according to Feb. 29 Philadelphia Inquirer op-ed Cohen wrote.

“You just don’t hear anyone questioning the need for or positive impact from pre-K,” Cohen wrote. “The only question I hear is how are we going to pay for it. And with all due respect, that’s simply the wrong question. The only question is how can we afford not to pay for it?”

The difference is that the proposal is not being branded as a public health issue, but an initiative to fund community programs, such as pre-K.

“We certainly acknowledge that if consumption goes down, there will be ancillary health benefits,” Hitt said, but she also pointed toward the benefits of the funding as well. “Kids who participate in pre-K tend to be healthier. If you have better park rec centers and libraries, your kids are going to stay more active after school.”

As for the actual potential for it to pass this time around, St. Joseph’s University history professor Randall Miller said that its chances are slim, but not impossible.

The reason for this, according to Miller, is that “Kenney is still in somewhat of a honeymoon period as mayor.” He also said that Kenney has worked with the people on council before, so he has a better chance of gaining support, “which Nutter was incapable of doing.”

Miller also said, “Kenney was very smart about this — his pre-K program is very important, he thinks, to the health of Philadelphia, especially to the poor people in Philadelphia.”

He added that it is more marketable because it has two potential positive outcomes. “It’s not just money for the general revenue. It’s money for a purpose,” Miller said.

While both supporters and detractors of the tax agree that Philadelphia is in dire need of improving pre-K education, disagreement has centered on how the levy would affect the sales of sugary drinks and whether the poor would be hit hardest by the tax.

One of the arguments in opposition is that the tax targets the poorer communities of the city, as they tend to consume sugary drinks at higher rates. Kenney has consistently denied these claims since, as the mayor told the Inquirer, the tax revenue would be invested in pre-K, community schools and recreational infrastructure.

Miller said that the soda industry argues that “this is going to pinch these small grocery stores, small sellers, small distributors, small everything.”

The profit margin made on the sale and consumption of soda is “the difference between making it and not making it,” he said.

The local government estimates that sugary drink sales in the city would drop by 55 percent in the first year, according to Philadelphia Magazine. However, Hitt said that this is only the extreme, because it assumes that every cent gets passed on to the consumer.

Kenney’s proposed tax would be levied on the distributors of sugary drinks. How much of the tax will be passed down to business owners and consumers is unclear and at the core of the debate between the pro-tax and anti-tax coalitions.

Deputy Revenue Commissioner Marisa Waxman told reporters on March 14 that — after conducting a meta-analysis of 13 studies — the drop in sales would be due to a 55 percent increase in the average price of sugary drinks.

Similar taxes have been passed in Berkeley, California, and Arkansas at a state-wide level. It was also passed in Mexico at a nation-wide level, though it failed in San Francisco.

“This time, it’s a more orchestrated effort in order to make the idea at least to be something worth considering,” Miller noted.

Clarification: This article has been updated to clarify that David Cohen did not specifically voice approval of the soda tax, but gave his support for universal pre-K "and the means to fund it." It has also updated a characterization of Cohen's statement to show that he did not contrast with former Gov. Ed Rendell. 

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