Philadelphia is the first major U.S. city with a sugary drinks tax – after many major U.S. cities, including Washington state, tried to enact one like it.
The city council on Thursday approved a 1.5-cents-per-ounce surcharge on sweetened beverages.
And that’s not just soda: iced tea, energy drinks, juice drinks, and coffee are in the mix.
If the tax passes, means $2.16 would be added to a 12-pack of soda and 21 cents to a 13.7-ounce Starbucks Frappuccino bottle.
Washington state and its repealed carbonated beverage tax
Proposed taxes in other cities have failed in part to the soda industry, deemed “Big Soda,” or specifically the American Beverage Association’s spending, according to The Washington Post. The ABA has reportedly defeated 45 soda tax measures nationwide since 2008.
During Washington state’s 2010 campaign season, the Associated Press reported the ABA had a combined contribution of $16.7 million in support of an Initiative 1107 – which would overturn new taxes at the time, including those on carbonated beverages.
When the carbonated beverage tax (CBT) was in place in the summer and fall of 2010, the rate was $.02 per 12 ounces of carbonated beverages.
The tax was repealed with the passage of Initiative 1107 on November 2, 2010. I-1107 cut tax collections by $217 million over two fiscal years.
Philadelphia’s move lends momentum to other cities wanting to explore tax options related to soda and sugary drinks, according to Jim Krieger, president of Healthy Food America.
Health advocates hope Philadelphia’s success will send a signal to local leaders across the country that soda taxes are moving to the political mainstream, and that they’re a good way to raise money and improve health at the same time, Politico reports.
Philadelphia is learning from other cities
The 1.5 cent per ounce tax on regular and diet sodas is expected to raise $91 million for Philly.
It's an approach that could be the key to victory for an idea that has failed twice in Philadelphia and dozens of times in places across the country in recent years — and a new strategy cities have been watching, as Philadelphia is poised for a rare victory on an issue that has been unpopular.
The city looked to Berkeley, California — the first city in the country to pass a soda tax last fall — for how they might pull off their own. But Berkeley, a town of fewer than 120,000, has nearly twice the median household income of Philadelphia and is overwhelmingly white.
Public interest and public health in sugary drinks tax argument
In Philadelphia, often cited as the poorest big city in the country, more than 180,000 citizens — many of them children — live in deep poverty, and only 45 percent of its 1.5 million residents are white.
"Berkeley's not Philadelphia," said City Councilwoman Blondell Reynolds-Brown, who voted in support of the soda tax in 2010 and 2011 and is supporting the latest version, which includes a tax on diet soda.
"I'm satisfied because the homework says diet soda is more often consumed by non-African-Americans," said Reynolds-Brown, who is black. "That's casting the net far wider and more citizens have some skin in the game."
The case could certainly be made for a healthier Philadelphia — more than 68 percent of adults and 41 percent of children in the city are overweight or obese.
But Kenney, a council veteran who ran pledging to establish universal pre-K and took office citing poverty as his top priority, focused on the public interest over public health in making the argument to tax sugary drinks.
"It's easier to have children get pre-K," Kenney said, calling whatever health benefits are realized from the tax a bonus. "Americans generally reject other people telling them what's healthy for them, so we tried to stay away from that. Our intention was to reduce the level of poverty for our city, and we can do that through education."
And the novel strategy of taking a tax that has traditionally been criticized as preying on poor communities and pledging to use the money to help those same neighborhoods was an argument that helped neutralize some of the racial backlash.
Both sides spent millions of dollars lobbying for the issue, with money pouring in from outside of Philadelphia.
The Associated Press contributed to this report.
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