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Missing the mark: the funds raised by the soda tax falls short of original estimates for fiscal year 2017
Missing the mark: the funds raised by the soda tax falls short of original estimates for fiscal year 2017

The soda tax stops raking in the coins

The soda tax is nowhere near the $46.2 million projected revenue for the fiscal year of 2017. 

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The soda tax isn’t doing as well as planned. With roughly 4,000 beverages taxed and a reported $5.7 million in revenue in January, the city had high hopes for its new money-maker.

The problems arose when the reported numbers near the end of the fiscal year were roughly $20 million short of the projections for the June deadline.

At $25.6 million, the revenue fell short of the $46.2 million that was projected for the year of 2017 that ends on June 30th.

Though the amount the tax was supposed to raise is a little short, the $25.6 million will still go to the pre-K programs, parks and recreation centers, libraries and the city fund balance.

With April only bringing in  $6.5 million in receipts, first reported by the Philadelphia Business Journal,  the tax is generating less revenue than expected.

The revenue surpassed the January goal by a long shot and the city projected that the trend would continue, considering that they anticipated the tax taking a while for all parties to get acclimated to and sign-up for the tax.

At 1.5 cents per ounce, the tax on the sweetened beverages would need to bring in $20 million by the end of June at roughly $10 million a month.

The possibility of this seems rare considering that the highest monthly grossing has been 7 million, and that occurred in March this year.

The mayor’s office has reported that they would lower your revenue projections since the low reports of the monthly numbers have come in, as first reported by Billy Penn.

Modifying the fiscal year projections during a revised five-plan presentation, the office stated that it would stick by the projections for 2018 despite the shift.

But outside of the revenue, the beverage tax is facing it’s on challenges.

With a recent lawsuit facing the city from the American Beverage Association, the city is slowly surmounting its legal challenges that are also holding up what funds the city has been able to generate from the tax.

In the state Commonwealth Court last week, the city won in a 5-2 ruling in favor of the tax.

The ruling shot down an ABA appeal of a Philadelphia Common Pleas Court ruling in December that declared the tax legal. The ABA is expected to appeal to the state Supreme Court.

And on Thursday, City Council gave preliminary approval to a program that will spend some of the tax proceeds on parks, recreation centers, and libraries. Final approval for that program, know as Rebuild, is set for a Council vote Thursday.

Lauren Hitt, a spokeswoman for Kenney, on Friday spoke about the legislation with the Philadelphia Inquirer stating that it was “a lot of rumors” and dismissed the upcoming hearing as part of a public relations effort to attack the tax.

She noted that State Senator Anthony Hardy Williams is a former Pepsi executive who “has been very engaged” in that effort, including a legal brief filed by three dozen state legislators in February supporting the ABA’s appeal to Commonwealth Court.

Hitt’s final point was her strongest: If the General Assembly pushes to undo the Philadelphia tax, those legislators would politically own the defunding of preK education, community schools, parks, recreation centers, and libraries in the city.

 

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