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The first step toward a historic "soda tax" in Philadelphia was taken by a City Council committee Wednesday evening.
The 1.5-cent per ounce tax on sugary drinks and diet sodas will now go for a vote before full Council next Thursday, according to initial reports. Council is scheduled to go on summer recess following next week's hearing.
The new tax would be a substantive political win for Mayor Kenney, who made his first initiative after taking office in January. The proposal was met with some skepticism after previous failed attempts by Mayor Michael Nutter to enact a sugary drinks levy.
The city would become only the second municipality in America to impose a tax on sugary drinks and diet soda sold. Dozens of other local governments have attempted to implement similar taxes, but only Berkeley, Calif., has succeeded.
"While there’s still a week ahead until the final vote, the Mayor thanks City Council for hosting a meaningful, serious debate and coming to an important compromise that will fund transformative educational and neighborhood programs," Kenney's spokeswoman Lauren Hitt said in a statement. "He encourages all Philadelphians to thank their Council members for standing up to the soda industry."
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Council President Darrell Clarke said approval by the full Council next week is likely.
"While the PFT has always supported Mayor Kenney's soda tax proposal, we realize that it has been the subject of a vigorous debate and the source of immense political pressure for Philadelphia's Council members," Philadelphia Federation of Teachers President Jerry Jordan said in a statement. "But the importance for increased funding for quality pre-k, community schools and improvements to the city's recreation centers cannot be debated."
The committee-approved tax is half the 3-cents per ounce tax proposal Kenney proposed months ago.
A strong lobby, consisting of soda retailers and drink distributors, have spent millions opposing Kenney's bill.
The revenue from the new tax is expected to raise $91 million annually. The money would go to a few different city programs, including Kenney's proposal for universal pre-K.
Clarke said in a statement following the vote that the inclusion of diet soda into the taxable drinks helped swing some Council members toward approval. He also alluded to use of some of the funds to buoy the city's general fund. The Kenney administration had factored in the beverage tax revenue into its overall 2016-2017 budget.
"City Council prides itself on having knowledgeable and experienced technical staff, who informed members weeks ago that Mayor Kenney’s 3-cents-per-ounce proposal would raise more revenue than needed to fund his initiatives. Today, the Administration disclosed that it also intends to use the soda tax to shore up the General Fund,” Clarke said. “It is the view of many members of Council that a General Fund problem and citywide initiatives should not be resolved by a proposal that affects mostly low-income people with few options.”
Councilman Bill Greenlee said approval of the tax next week would finalize the city budget. He also congratulated Kenney, who made the beverage tax his first major goal since taking office in January.
“I congratulate Mayor Kenney – a longtime colleague and friend – on an engaging and ultimately successful inaugural budget process," Greenlee said. "I also thank every member of Council, and our hardworking and talented staff, for producing a final budget that is more fiscally responsible and will truly move our City forward.”
