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February 26, 2016

Mayor Kenney expected to propose Philly soda tax in first budget address

Proposal would face uphill battle and staunch opposition from soft beverage industry

At his first budget address next week, Philadelphia Mayor Jim Kenney is expected to propose a soda tax that will aim to raise revenue and promote public health efforts despite staunch opposition from the $76 billion soft beverage industry.

According to PhillyMag, sources revealed that Kenney will reintroduce a tax on soda that was previously proposed by former mayor Michael Nutter but rejected twice in 2010 and 2011. Details on the proposal remain unclear, but the possibility raises a noteworthy policy shift from Kenney, who previously opposed the soda tax bill as a member of City Council.

The last time Philadelphia weighed the merits of a soda tax, lobbyists from the beverage industry and Teamsters appeared at City Council in full force to make their case to council members. Ultimately, their protests were louder than those made by officials from the School District of Philadelphia, which later got some relief through the $2-per-pack cigarette tax that took effect in October 2014. That measure brought in more than $50 million within nine months and is expected to generate in excess of $110 million by June of this year.

In 2012, the American Beverage Association spent about $240,000 to crush Nutter's soda tax, but as Citified points out, a Kenney proposal may fare better this time around with the support of Council Majority Leader Bobby Henon. His backing, coupled with 10 new City Council members, may give the idea new momentum. Kenney also appointed Thomas Farley, a known soda opponent, as Philadelphia health commissioner.

Promoted as a strategy to reduce obesity rates, researchers concluded last year that the national soda tax imposed in Mexico did, in fact, lead to a six percent drop in soda purchases. It was far too early to determine whether the policy has had any effect on the country's diabetes and obesity rates.

In the United States, the only municipality to successfully pass a sugary beverages tax is Berkeley, California, where the price for consumers rose by about seven-tenths of a cent per ounce. Similar legislation in San Francisco did not gain passage in part because low-income and minority voters rejected it. While some believe the brunt of soda taxes should, in theory, be absorbed by bottlers and retailers, that has not been the case in the few areas where it has been applied.

In New York City, former mayor Michael Bloomberg successfully enacted an alternative measure limiting the serving size of soda to 16 ounces at restaurants, movie theaters, stadiums and arenas. A statewide ban on oversize sodas was struck down last June, however, in a 4-2 decision by the New York Court of Appeals, which cited a lack of authority by New York City's health board (As mayor, Bloomberg opted to take that route instead of going through City Council). According to The Wall Street Journal, current New York City Mayor Bill de Blasio has been seeking other ways to regulate sugary drinks.

Whether or not Mayor Kenney can build enough support to pass a soda tax in Philadelphia remains to be seen, but polls suggest Americans on the whole are attempting to limit their intake of sugary drinks. Six in ten U.S. adults say they want to move away from soda, but the bigger issue for proponents of a tax is that more than half of Americans are against such "nanny state" measures, while just over a fifth say they support the idea.