Kenney launches campaign for proposed soda tax

Posted: March 17, 2016

In a well-worn North Philadelphia recreation center, Mayor Kenney launched his campaign to tax sugary drinks on Wednesday, relegating its opponents to "Big Soda lobbyists" and casting supporters as everyday Philadelphians who stand to benefit from the levy.

"I don't think I can fail, based on the people who are standing behind me," Kenney said, "because they are Philadelphia. They're not corporate America, they're not Big Soda, and this is not personal toward Big Soda, but there's a lot of money being made off the backs of poor people.

"And the argument they'll make is that this is a tax on the poor. Well, they've been taxing the poor for generations, and what we're looking to do is take some of that profit and put it back into the neighborhoods."

This month, Kenney announced his proposal for a three-cents-per-ounce tax on sugary drinks to bring in $432 million over five years to pay for: universal pre-K; community schools; and upgrades to parks and recreation centers. The tax would be collected at distributorships and would not include diet drinks.

Moments after Kenney had uttered "sugary-drinks tax," those familiar with the battle - waged twice before, when Mayor Michael Nutter tried to impose a two-cents-per-ounce tax - organized in opposition.

That coalition, Philadelphians Against the Grocery Tax, is funded by the American Beverage Association and is made up of local business owners, community members, and the Teamsters, who represent truck drivers. The group argues that the tax unfairly targets the poor, will not provide the funding promised (its projection is $279 million over five years), and will result in the loss of jobs.

Another critic of the tax, David McCorkle, president of a state food merchants' association representing 240 stores in the city, said: "The mayor really has no idea to what degree consumers will vote with their feet on this extraordinarily high tax."

Wednesday's event at Olney Recreation Center introduced a pro-tax coalition called Philadelphians for a Fair Future. The group includes pre-K advocates, the Philadelphia Federation of Teachers, SEIU 32BJ, and the Philadelphia chapter of the NAACP.

Kevin Feeley, a veteran public relations professional, is working with the coalition, which he says is being supported with private fund-raising.

"I don't have names to give you today, but this campaign is going to have more than enough funding to be able to wage a very comprehensive effort in support of the soda tax," Feeley said.

Philadelphia NAACP president Minister Rodney Muhammad of Muhammad Mosque 12 said soda companies target poor communities with their marketing. He argued that the benefits that pre-K would reap outweigh any burden on consumers.

"A tax on these beverages at the point of distribution is a painless contribution as the city now works to establish, for the first time, a great equalizer in universal pre-K," Muhammad said.

Kenney said he did not know whether he has the nine votes needed in City Council to pass the bill. He called on those before him to help.

"You're going to hear a lot from Big Soda - there's going to be an air war, there's going to be a ground war, and there's going to be lobbyists out the wazoo. . . . These are my lobbyists," Kenney said, gesturing to the constituents behind him and encouraging them to call Council members.

Wednesday's rallying call came after a weekend in which the mayor took heat for an error in the proposed legislation that would tax fountain drinks at a 50 percent higher rate than bottles or cans.

Kenney said the tax would be three cents per ounce across the board. He said those against the tax are trying to use the error to discredit him.

"They have nothing else to hammer," Kenney said. "People aren't perfect."

Within minutes of Wednesday's event, opponents of the tax reached out to respond.

Tom Singh, who owns five Sunoco franchises in the city, said sugary drinks make up 40 percent of his sales and any tax would be passed directly on to consumers.

"I have 20 employees. If profit is not there, maybe I have 10 or 12, and that's just me, and there's gas stations and small convenience stores at every corner," he said. "Imagine one or two employees laid off from each business. And these are low-income neighborhood communities."

Singh said sales of cigarettes at his franchises are down 30 percent since the city started collecting a $2-a-pack tax on Oct. 1, 2014.

"We haven't recovered from that loss yet," he said. "I don't know that we could sustain business with this tax."

jterruso@phillynews.com

215-854-5506 @juliaterruso

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