Philadelphia's controversial tax on soda and sweetened beverages is performing exactly as envisioned — at least according to its many critics. Revenues came in about $13 million short (about 13 percent) during the soda tax's first 12 months. That has caused Philly to downsize plans for pre-kindergarten and other projects pegged to soda-tax revenues over the next five years, according to The Philadelphia Inquirer.
In addition, the 1.5-cent-per-ounce tax also is in the cross hairs of litigation before Pennsylvania's Supreme Court. An appeal brought by the American Beverage Association and various businesses maintains that the tax tramples the state's prohibition on double taxation because it's passed along to consumers who also pay the state's sales tax.
Then there are the job losses: The American Beverage Association said an Oxford Economics study showed the city has lost nearly 2,000 jobs because of the tax while bottlers' sales dropped 29 percent, according to Bloomberg.
Yet this is what Philly finance director Rob Dubow called a “big success.”
According to Anthony Campisi, a spokesman for the Ax the Beverage Tax campaign, “I think this highlights exactly what we've been saying all along: that this tax isn't a sustainable long-term revenue source for important programs like pre-K that enjoy widespread support.”
Municipalities large and small that are closely watching the outcome of Philly's soda tax would be wise not to repeat the same mistake.
