Hard to swallow: Many local supermarkets like ShopRite have signs posted in the beverage aisle noting which products are subject to Philadelphia’s beverage tax. City Council passed a bill that set the tax at 1.5 cents per ounce. PHOTO: MATTHEW HAUBENSTEIN
Hey, opponents of the city’s new beverage tax, it could be worse.
When Mayor Jim Kenney first proposed taxing sugary and diet drinks, he set the rate at 3 cents per ounce.
In the end, City Council passed a bill that set the tax at 1.5 cents per ounce. Proceeds are to go to pre-kindergarten programs and other city initiatives.
The tax went into effect on Jan. 1. It is actually on distributors, but they are expected to pass it on to retailers, who are expected to pass it on to you know who.
Opponents of the tax have taken the issue to court, but Common Pleas Court Judge Gary Glazer dismissed the suit.
“It is a victory for Philadelphians, who have waited far too long for investment in their education system and in their neighborhoods,” Kenney said. “I urge the soda industry to accept the judge’s ruling and do the right thing for the children of Philadelphia, many of whom struggle in the chilling grip of pervasive poverty. The industry has chosen not to challenge beverage taxes in other municipalities, and there is no reason to continue pursuing it here. Regardless of their decision, the city will not stop pursuing what those kids need most — quality pre-K, community schools and better parks, libraries and rec centers.”
The soda industry has appealed to state Commonwealth Court. The city wants to go straight to the state Supreme Court for a final answer.
The Philadelphians Against Grocery Tax Coalition said prices will rise not only in stores, but at movie theaters, restaurants and sporting events.
The coalition issued a statement that read, “More than 30,000 Philadelphians and more than 1,600 businesses and local organizations have joined together to say that this tax unfairly targets working families and small businesses. Families will face an additional tax burden even as the city has demonstrated that it has the resources to move forward with pre-K without this tax. We will continue to oppose this discriminatory and regressive tax, which is not a sustainable revenue source to support important initiatives like pre-K programs.”
Items taxed include soda, energy drinks, sports drinks, iced tea, fruit punch, sweetened water and iced coffee. Even kids will have to empty their piggy banks, since Hugs are also taxed.
Items not taxed include orange juice, tomato juice and apple cider.
To measure the impact of the tax, the Times bought a 12-pack of 12-ounce A&W Root Beer cans at Mayfair Shop n Bag. The cost was $5.49. The 1.5-percent tax on 144 ounces of soda is $2.16, bringing the price to $7.65. Add in the 8-percent sales tax, and the final cost is $8.26.
The Shop n Bag, like many other stores, has signs in the beverage aisle noting which products are subject to the tax.
Speaking of signs, Fink’s Hoagies, 4633 Princeton Ave. in Tacony, posted on Facebook a picture inside the shop that reads, “Due to the fact that most Philadelphia elected officials do not understand how to run a business nor balance a budget, the citizenry of Philadelphia have been hit with yet another unfair tax. Fink’s will no longer be part of this blatant robbery of hard working Philadelphia taxpayer’s money.” The sign includes the words “soda tax” in a circle with a slash through it and a mention that a cold 24-ounce sports water bottle is just $1. It’s gotten some 1,300 likes and more than 1,700 shares.
The Santucci’s bar/restaurant at Knights and Woodhaven roads also took to Facebook, posting, “Just a friendly reminder that with the start of the new year, the beverage tax is now in effect. Because of this, we can no longer offer free refills. We apologize for any inconvenience.”
Council passed the tax last June by a vote of 13–4. All the votes in favor came from Democrats. The votes against came from Council’s three Republicans, along with Democratic Councilwoman Maria Quinones Sanchez.
City Council President Darrell Clarke urged the business community to be a partner, not an obstacle, in the city’s progress by dropping its appeal.
“Philadelphians and the elected Council members who represent them overwhelmingly support the initiatives the so-called soda tax will support. Expanding quality pre-K to all children, particularly our most disadvantaged and unlucky kids, is a worthy investment in our city’s future. Rebuilding public spaces will enhance the quality of life in neighborhoods and create family-sustaining local jobs for Philadelphia residents,” he said.
The local business community, represented by the Greater Northeast Philadelphia Chamber of Commerce, strongly opposes the tax. Resident Pam Henshall and members from Wawa, ShopRite, Dining Car and Village Catering all met with the Kenney administration, but were not persuaded.
The Chamber will host an informational session on the beverage tax on Thursday, Jan. 12, from 8 to 9 a.m. at its office at the Philadelphia Federal Credit Union building, 8025 Roosevelt Blvd., Suite 200. Rebecca Lopez-Kriss, of the city Department of Revenue, will deliver a PowerPoint presentation and answer questions. The revenue department has also created the website phillybevtax.com
Henshall, the local Chamber president, said some of the initiatives of the tax are noble, but that her member businesses have concerns.
People living in places like Fox Chase, Parkwood and Morrell Park don’t have to go far to shop in the suburbs.
There’s a ShopRite at Frankford and Morrell avenues. A sign outside reads, “Attention Customers: There is no Philadelphia Beverage Tax on any item that is in this week’s circular. Courtesy of ShopRite.”
That’s good, because ShopRite has a sale on five 12-packs of Pepsi for $13.
But the tax could come shortly, and there is a smallish Acme a little over a mile away near Woodhaven Road in Bensalem that is ready to take advantage. A sign outside that store reads, “There is NO Philly Soda Tax here.”
Other suburban stores that could benefit include Redner’s, less than a half-mile away from the city border on Knights Road in Bensalem; Giant, less than 1.5 miles north of the border on Bustleton Pike in Feasterville; and a Giant less than a mile north of the border on Huntingdon Pike in Huntingdon Valley.
None of those stores had signs boasting of not having the city tax. Still, Philadelphia supermarkets worry that consumers will buy their soda — and eggs, butter, milk, etc. — elsewhere.
“Northeast Philadelphia is so close to the Bucks County border,” Henshall said. “People may just go to that Acme and buy their entire list.” ••
A new tax in town: A receipt from Mayfair Shop n Bag shows a beverage tax of $2.16 on a purchase of an A&W Root Beer 12-pack that originally cost $5.49. MARIA YOUNG / TIMES PHOTO
