The evolution of the soda tax, so far
The Soda tax may have divided the city, but on June 8th City Council gave the preliminary approval to place a tax on sugary drinks, which, if approved, would make Philadelphia the first major city in the United States to tax beverages with added sugar.
Some of the details of the tax that were approved by council on Wednesday differed from the initially proposed beverage tax.
The amount of the tax
Back in March, when Kenney announced the budget, he introduced a 3 cents-per-ounce tax on sodas and sugary drinks. The tax approved on Wednesday during the first round of voting was half of Kenney’s suggestion, $1.5 cents.
According to Lauren Hitt, Kenney’s spokesperson, “council members came together and decided a 1.5 cent compromise with diet was what they preferred.”
In the spirit of compromise, Hitt said, Kenney agreed.
The type of beverages taxed
Initially, the soda tax was created to levy beverages with added sugar, such as sodas and juices. On Wednesday, city council not only agreed to decrease the amount to half, they decided to also tax diet soft drinks.
After the changes made by council members, the alternative beverage tax increase would raise approximately $91 million annually. Only $4 million less than the $95 million revenue projected by Kenney’s Administration in March.
Over the Five-year plan, the Administration hopes to raise around $300 million with the soda tax, which the City aims to invest in the mayor’s initiatives.
“$300M from the tax over the five-year plan is allocated towards 6,500 pre-K seats, 25 community schools and improvements to parks, recreational centers and libraries,” Hitt said.
Probably one of the biggest surprises of the session was the fact that not all the revenue raised by the tax would go to fund the mayor’s initiatives, such as pre-K programs.
A small portion of the revenue would go to the fund the City’s balance. Over the Five-year plan, $24M would be allocated towards the fund balance. “That’s a little less than six percent of the total revenue from the soda tax,” Hitt said.
“Twenty-four million is actually significantly more funding than the administration requested in the initial budget proposal the Mayor put forth in March. The contribution to the fund balance was doubled as part of Council’s compromise bill.”
City Council will vote again next week. If they give the okay to the tax, the next and last step will be getting Kenney’s signature.