Philadelphia became the first major city in the nation to enact a tax on sugar sweetened and diet beverages. The 1.5 cent per ounce tax, effective January 1, 2017, will apply to soda, sports drinks, flavored water energy drinks, bottled coffee, as well as other beverages.
The Philadelphia City Council approved the bill by a 13-4 vote and Philadelphia Mayor Jim Kenney quickly signed the bill into law on June 16. Kenney reiterated his previous position on the bill, citing the prime reason for his support was a means to raise revenue for the city.
“We want to expand pre-K to 10,000 slots in the next four years, we want to create 25 community schools within our neighborhoods so that people can go to schools and get the services they need for their kids, both medical, social, psychological and other types of job training and educational opportunities for adults,” Kenney explained.
The tax, according to city officials, is expected to raise $91 million per year in additional revenue.
Health officials also supported the bill, claiming the tax will serve as a deterrent to problems related to obesity and diabetes.
“Such drinks are the perfect candidate for a tax,” said Michael Jacobson of the Center for Science in the Public Interest. “Besides raising revenue for valuable programs, a tax of this size can nudge consumption downward and reduce the regressive toll of soda-related disease.”
Not surprisingly, grocery industry executives criticized with implementation of the law.
“It’s a regressive tax because the people that can least afford to pay it will be the ones that are paying a high proportion of it. It’s a tax on grocery products that are in everyone’s grocery cart,” said Sue Neely of the American Beverage Association.
Other industry officials promised they would challenge the constitutionality of the new law in court.
Once the new law takes effect, it will add eighteen cents to the cost of a 12 ounce can; $1.00 to a two liter bottle; and $2.16 to a twelve pack. Baby formula, drinks with more than 50% fresh fruits, vegetables or milk and drinks where the purchaser adds their own sweetener, such as coffee or tea, are exempt.
