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Thursday, June 16, 2016

Philly's Groundbreaking Sugary Beverage Tax Passes, What's Next and What It Means for Bicyclists

Up until today, Berkeley, California has been the only U.S. city to enact a soda tax into law.  Philadelphia is now the second major city with a sugary drink tax. Today, Kenney’s tax became law after Pennsylvania legislators approved his revised bill. 

Mayor Kenney’s original bill sought to tax sugary drinks at three cents per ounce. City Council reduced that to one and a half cents per ounce, with the inclusion of diet soda. By adding diet soda, projected revenue increased to $91 million annually, just $4 million less then the original bill.

The battle between cities and soft drink companies has happened before, most notably, in New York City.  On September 13, 2012, New York City’s Board of Health approved Mayor Bloomberg’s ban on the sale of soda over 16 ounces. Between 2010-2015 the American Beverage Association spent $15.2 million lobbying against Bloomberg’s legislation, ultimately challenging his soda ban in court. After a final appeal in 2014, New York’s highest court deemed the ban unconstitutional on the basis that the City’s Board of Health exceeded its regulatory authority. 

Assuming the Beverage Lobby will challenge Kenney’s tax in court, they face a more difficult task here in Philadelphia.  New York’s legislation faced additional judicial scrutiny since it imposed a ban, as opposed to a tax. Furthermore, New York’s Board of Health was found to have exceeded its regulatory power. Only New York’s City Council, and not its Board of Health, had the power to enact such as legislation, according to New York's high court.

Philadelphia’s new tax, which was passed through its legislative body, should be able to withstand a legal challenge.  Under the Pennsylvania Constitution, a tax must apply uniformly across products, though absolute uniformity is not required. Leonard v. Thornburgh, 507 Pa. 317, 321 (1985). Where application of a tax depends on the product – here, a sugary beverage – then there must be a “just and reasonable basis for the difference in treatment.” Id.  

Beverage lobby outside City Hall on June 16, 2016.

With Kenney’s tax, there appears to be sufficient uniformity.  It applies to a large universe of drinks – all sugary beverages – and does not single out any particular brand, product, individual or business. To the extent that Kenney’s tax targets only “sugary” drinks, the City has “wide discretion in matters of taxation” – meaning, the City has the power to decide how to generate revenue and, in some circumstances, can impose taxes to influence consumption. Id. at 320. Imposition of a sugary drink tax should be well within the City’s taxation power. 

And that’s good news for bikers. Vision Zero should get the funding it desperately needs. Meaning, better bicycle infrastructure and safer streets in Philly's future. 

By:  Sean Pryzbylkowski

Wednesday, June 8, 2016

Beverage Lobby Dumps Millions into Philly's Soda Tax Fight, Likely Dooming Vision Zero

Protesters in Philadelphia stand outside of City Hall with hopes to stop Mayor Kenney’s proposed sugary drink tax.  Projects to be funded by the proposed tax, such as universal pre-k, may remain pipe dreams.  

For Philly bicyclists, the proposed tax is needed to fund Mayor Kenney’s Vision Zero promises.   Vision Zero will enable the city to improve upon bicycle infrastructure, with the goal of eliminating bicycle accidents.

Kenney’s proposed sugary drink tax, however, has incited ire from the beverage lobby.  After Kenney announced the tax, the American Beverage Association, which is funded by companies like Coca Cola and Pepsi, spoke out in opposition.

According to the Wall Street Journal, the American Beverage Association has already spent roughly $3 million dollars fighting against Kenney’s proposed tax.

Protests are expected to continue outside City Hall through Wednesday afternoon, when the bill may be decided.  Similar lobbying efforts effectively prevented a sugary beverage tax proposed by the Nutter administration.  If history repeats itself, funding for projects like Vision Zero will never come to fruition.  

And that’s a problem.  The City needs to invest in new  bicycle infrastructure and safety.  In 2014 alone, Penndot reported 551 bicyclecrashes in Philadelphia.

Mayor Kenney has budgeted $250,000 towards bicycle safety projects, which is dependent on the sugary drink tax passing.  Meanwhile, corporations are dumping millions into stopping the proposed tax.

A compromise could be reached tomorrow.  Many City Council members are unhappy with the tax amount.  Darrell Clarke, President of City Council, opposes a 3 cents tax, but would possibly support a smaller tax.   Some members of City Council are open to a tax that would charge a cent and a half.  Such a compromise would slash potential revenue in half, more than likely killing many of Kenney’s smaller pet projects, including Vision Zero.

 By:       Sean Pryzbylkowski