Philadelphia close to being first major U.S. city to institute soda tax

A new tax might soon force Philadelphian soda consumers to pay more for the drinks than consumers in other cities.

On Wednesday, the Philadelphia City Council confirmed it would support a new tax of 1.5 cents per ounce on sugary beverages and diet sweetened beverages, NPR reports.

A second city council vote, which is scheduled for June 16, is still required before the tax legislation can pass.

Berkeley, Calif. is the only U.S. municipality to ever successfully pass a similar regulation, local TV station WCAU reports.

“Philadelphia’s decision to tax unhealthy beverages to fund early child education is a milestone,” Public Health Advocates Executive Director and California soda tax advocate Harold Goldstein told Forbes. “It gives permission to every city in the country to start thinking about what they would like funded by a soda tax.”

Kenney’s initial proposal involved instituting a 3-cent per ounce tax on sugary sodas, according to NPR. While the amount has been reduced, the scope has been extended to include diet beverages as well.

The tax, which would be levied on bottled and fountain beverages, is estimated to bring in $91 million per year, according to Forbes. Mayor Kenney said he would funnel the revenue to funding universal Pre-K, in addition to other community improvements.

"While there’s still a week ahead until the final vote, the Mayor thanks City Council for hosting a meaningful, serious debate and coming to an important compromise that will fund transformative educational and neighborhood programs," Lauren Hitt, spokeswoman for Philadelphia Mayor Jim Kenney, said in a statement. 

For some city officials, concerns over Philadelphia’s fiscal health informed their motivation to vote for the bill, rather than just concerns over individuals’ health, Philadelphia Magazine reports. Issues surrounding the city’s fund balance persuaded Councilman Allan Domb to vote in favor of the tax.

“I don’t want to be in 2018 and only have $11 million in the fund balance,” Domb told the magazine. “That’s just not acceptable. Moody’s, one of the rating services, says we should strive for six percent of our budget, which is $4 billion, in the fund balance. We need to build up the fund balance.”

In a May Philadelphians for a Fair Future video PSA, Mayor Kenney said the tax was a means to the end of enabling universal Pre-K.

"The way to do it is from this targeted tax on an industry that makes enormous profits on the backs of poor people," he said in the ad.

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