Philadelphia on verge of adopting sugar tax

Philadelphia may become the first major US city to implement a tax on sugary drinks. A vote next week could levy a tax of 1.5 cents per ounce of soda containing sugar or sweeteners, resulting in a 30 cents tax on a 20-ounce drink. Such taxes are usually seen as a way of countering public health issues such as diabetes, obesity and tooth decay. However, Philadelphia’s mayor, Jim Kenney, has presented the tax as a means of raising revenue for public services, rather than improving health. As a result, the range of products to be taxed has been altered for budgetary reasons, meaning that diet drinks will also be included. San Francisco, Boulder and Oakland are among the communities hoping to introduce similar measures later this year.

Philadelphia is poised to become the first large American city to pass a soda tax.

If the measure passes a final vote next week, as it is expected to do, it will impose a tax of 1.5 cents for every ounce that includes sugar or artificial sweeteners — about 30 cents for a 20-ounce drink or $2.16 for a 12-pack. On Wednesday night, it was passed on a voice vote by the City Council’s “committee of the whole,” which includes the entire council.

Soda taxes have usually been proposed as public health measures to discourage people from drinking sugary beverages, which have been linked to obesity, diabetes and tooth decay. They have been introduced in cities around the country, including twice before in Philadelphia, but repeatedly failed. Berkeley, Calif., is the only American city with a tax on sugary drinks; the Philadelphia tax would be considerably higher.

Mayor Jim Kenney’s original proposal was to tax sugary drinks at 3 cents an ounce, a rate that would have doubled the price of many sodas. Aware of the political challenges, he tried a novel strategy to promote his tax. Instead of selling it as a nanny state measure meant to make the city healthier, he presented it as a big untapped source of revenue that could be used to pay for popular initiatives, including expanded prekindergarten, and renovations of city libraries and recreation centers.

That choice appears to have paid off, but it may come with some consequences. Because the measure was cast as a revenue-raiser, the final deal is not exactly what public health experts might prefer. Council members, in negotiations, altered the spectrum of taxed products to hit budget targets. The measure that passed Wednesday taxes not just sugary drinks but also diet drinks. It exempts juice drinks from the tax as long as they have 50 percent juice, even if they also have added sugar. Minutes before the final vote at 8 p.m., the city’s finance department revealed that some soda-tax revenue would also be used to plug a budget shortfall.