POLS ON THE STREET: To Tax Or Not To Tax? Philly’s Sugary-Drinks Conundrum

by Joe Shaheeli

DONNA COOPER of Public Citizens for Children & Youth debated Lauren Vidas of the Phila. Beverage Association before the Phila. Crosstown Alliance on the merits of Mayor Kenney’s proposed sugary-drinks tax, moderated by Sam Katz.

Mayor Jim Kenney’s $300 million bond initiative to rebuild parks, recreation centers and libraries, and fund pre-K education is the main drama on Philadelphia’s political stage today.

It is facing fierce opposition because it would fund these essential institutions (which no one opposes) by taxing sugary drinks.

Sweetened beverages are a large part of total calorie consumption for the average American. They are a leading cause of what makes Americans so fat, compared to other nations, and what cripples and kills so many of us from diabetes, heart disease, blindness, kidney failure and many other ailments. The human body can’t handle all this sugar. If you need more information on kidney failure/treatment, visit sites like http://thekidneydocs.com/.

But they are popular and fuel many local industries, from the bottling works of Harold Honickman to countless corner stores. Another major beneficiary: Teamsters who truck these bottles around town. These workers understandably fear loss of jobs if people drink less soda, and they are spending heavily to fight a soda tax in Philadelphia, as they have elsewhere in the nation.

The Teamsters are generally supported by their union brothers in the Building Trades so far. That’s a big deal because, as AFL-CIO Recording Secretary Ken Washington, the Laborers’ political maven, noted, “What we in the Building Trades work with, Teamsters unload for us.”

But major City-government unions like AFSCME and Philadelphia Federation of Teachers support the tax. Their members will benefit from these investments. And certain Building Trades know they would come out ahead as well, although they are not saying so in public at this time.

A move to kill the sugary-drinks tax without immediately substituting for it a quicker, surer revenue source is, therefore, a job-killer for many. Workers would like these projects to be launched, the sooner the better. Unions want redevelopment of Philadelphia as much as anybody.

So those who don’t like the sugary-drink tax have a very narrow window in which to pitch a better alternative for funding the Rebuild Philadelphia bonds in the 2016-17 budget.

PHILA. Health Commissioner Dr. Tim Farley, who once led a campaign to tax large soda consumption in New York City, demonstrated at a press conference this week that one Big Gulp contains the equivalent of 58 packs of sugar.

Councilwoman-at-Large Blondell Reynolds Brown has proposed replacing this tax with a 15-cent tax on all beverage containers, regardless of how healthy their contents are.

The Kenney administration responded that Reynolds Brown’s proposal would not generate enough revenue. But, as Public Citizens for Children & Youth Exec. Dir. Donna Cooper noted at a debate staged by the Philadelphia Crosstown Alliance, no administration will talk about the merits of any Plan B while it is still busy pushing Plan A.

The anti-tax campaign is straightforward and relies on money. The soda industry has tagged its wares as a “grocery” and is spending millions of dollars to oppose this tax. Honickman, counted among the 10 richest Philadelphians, is endowing the campaign to squelch the tax. And he is backed by both state and national soda industries. Its print and broadcast advertising is everywhere.

The pro-tax campaign is younger, more diverse, less organized and less well-funded. But it potentially has a large civic constituency – if it can be mobilized.

Initially, Team Kenney relied on a strategy of accentuating the positive: rallying civilian supporters of parks, recreation centers, libraries and early-childhood education to advocate for all the good the tax could accomplish. The tax itself was not about health, but about a simple solution to an urgent revenue hunt where few other options look viable.

But it is not clear that this coalition, Philadelphians for a Fair Future, has mustered the troops it needs to overcome union activists who can be paid to demonstrate at City Council. Sometimes in politics, the louder voice wins. How handy are Parks & Rec advocates with a bullhorn?

VOWING to press for major investments in Phila.’s rail infrastructure if elected to the US Senate, Katie McGinty was joined at 30th Street Station by State Rep. Donna Bullock and State Sen. Vincent Hughes – with a phalanx of supporters from Transportation Workers of America and International Brotherhood of Electrical Workers. Photo by Wendell Douglas

George Matysik, executive director of Philadelphia Parks Alliance, is a key operative in the PFF coalition. He asserted “tens of thousands” of Philadelphians have spoken out in support of the Mayor’s investment proposal. “When you hear the stories our folks tell – in their phone calls, letters and visits to Council Members, in their showing up at rallies – you realize these are the authentic stories that capture how important these programs are to our members,” he said. “The interactions that most Philadelphians have with their government is at parks, recreation centers and libraries.”

Matysik estimated his coalition was being outspent by the anti-tax campaign 50-1. But PFF has released a couple of television commercials supporting the Mayor’s proposal.

Initially, Kenney’s strategists relied on spreading a positive message about these popular City services. Marching orders were to downplay the “vice tax” aspect of the sugary-drinks tax – that by increasing the cost of an unhealthy habit, it would reduce sugar consumption and improve public health.

But this week they backtracked on their original gameplan. Now it is indeed about health, at least in part, they announced.

Philadelphia Health Commissioner Dr. Thomas Farley, a pediatrician, rolled out an impressive lineup of city physicians at a press conference at Puentes de Salud, a Center City health clinic, in support of a tax that would specifically reduce sugary-drink consumption.

The American Heart Association is all in on the sugary-drinks tax, as its Philadelphia head Dr. Kenneth Margulies made clear this week. In the past decade, a consensus has emerged among medical experts that excessive consumption of cheap sweet brews has launched an epidemic of diseases with dire costs even to taxpayers who don’t drink this stuff. Taxpayers, after all, pick up the tab for poor people sickened by these diseases.

And poor people suffer most. Before the epidemic began, in 1960, only 2% of Americans were diabetic. Today, after decades of Big Gulps, 12% are diabetic. Among poor Philadelphians, the rate is 22%. Harvard Prof. Dr. Steven Gortmaker reported in a study that a sugary-drinks tax in Philadelphia would reduce diabetes cases by 2,300 a year and cut medical costs by $197 million over 10 years.

$2,500 CHECKS from Councilman Allan Domb each went to Elkin ES in Juniata Park, Webster ES in Harrowgate and Harding MS in Frankford. Grateful students here posed with Domb and their principals Evelyn Nuñez, Sherri Arabia and Mary Sánchez. Domb will disburse every penny of his Council salary this way. Photo by Wendell Douglas

Black Philadelphians are especially at risk of death from sugar-related diseases. “Diabetes represents a health crisis that already affects nearly one in five African Americans in Philadelphia today,” Dr. Farley said. “Sugary drinks are the biggest single contributor to this problem, because they are the biggest single source of added sugar and they are driving the epidemic of obesity.”

It sounds like a strong case. But Lauren Vidas, a veteran City Hall attorney now representing the Philadelphia Beverage Association, noted acidly at the Crosstown Coalition debate, “Kenney has switched to a health argument because he was losing on the tax argument.”

Weighing in against Reynolds Brown’s container tax is Pennsylvania Association of Nurses & Allied Professionals.

“The proposed container tax would have regressive health and economic effects on our members and the patients we serve,” said Patricia Eakin, RN, PASNAP president. “The proposed legislation would exempt bottles of alcohol but would provide no exclusion for bottled water or health supplements. And even if those exemptions were made, the tax will likely still encourage increased consumption of sugary drinks as people will try to minimize the impact of the tax by buying larger containers.

“Additionally, unlike the sugary-drink tax, the container tax is unavoidable because it includes so many types of food items. It’s truly the grocery tax.

“The container tax is a distraction and we strongly oppose it. The sugary-drinks tax raises a larger and more reliable income stream and is cheaper to collect. It has the added benefit of helping reduce conditions like obesity and diabetes, thus improving the quality of life of Philadelphians and driving down health costs.”

Minister Rodney Muhammad, president of the Philadelphia Chapter of the NAACP, is the designated spokesman for Philadelphians for a Fair Future, the coalition of supporters for the $300 million bond issue. He, too, whacked Reynolds Brown’s alternative, saying, “Let’s stop trying to find ways to make it easy to let the big soda companies off the hook when it comes to paying for expanded pre-K for our children. We have a chance to enact programs that will give our children a chance at a quality education, and this proposed container tax doesn’t come close to being a real alternative to the Sugary Drinks Tax. It would generate $30 million less than the soda tax, and that means our children would have to settle for less once again.

“The container tax forces poor people to pay because it taxes all containers. That is truly a regressive tax that unfairly impacts poor people even when they make a choice to drink healthy beverages.”

STRONG lineup at State Rep candidate Jim Pio fundraiser at Curran’s Irish Inn in Torresdale included Ward Leader Mark Wuller, Khara Pio, Brian McCann, Jim Pio, Ward Leader Tom Matkowski and Joe Giedemann. Photo by Wendell Douglas

Cooper reiterated this point. In Mexico, where a big sugary-drinks tax was passed nationwide in 2014, initial results there are that poor people chose to drink less sugar after the tax was imposed, while middle- and upper-income people did not. “Therefore, this is the most-progressive tax you can imagine,” she argued. “It falls largely on the well-to-do.”

The Greater Philadelphia Cultural Alliance is also on board.

“This vital investment in pre-K, parks, recreation centers and libraries will significantly contribute to the cultural vitality of our city, in the neighborhoods that need it most,” said Maud Lyon, Cultural Alliance president. “It will also open up opportunities to expand arts and cultural programming in some of Philadelphia’s most-challenged communities.”

Some suspicious constituencies ask what protects the sugary-drinks tax from being hijacked by Council Members in future years and diverted to other purposes.

The Mayor says his proposal was crafted to avoid the shameful calamity of the 2008 Parking Tax, which was passed specifically to support parks and recreation facilities – but was immediately looted by Council Members to support their own special causes. The lesson is that Philadelphians cannot trust their City Council members to protect the Philadelphia Parks & Recreation Dept., which is underfunded by about two-thirds compared to other cities in its league. They have been starving it for a lifetime and will continue to do so unless a light is shone on the PPR budget today.

Kenney says it will be different this time because the $300 million in City bond revenue will be bound to another $150 million in federal, State and private donations which are tied to these causes. So the City can’t collect the money from these partners unless it spends all their money as well as all of its money on these vital projects. That should limit City Council’s power of pilferage on this latest levy, and bind it to the valid and worthwhile causes it is meant to serve.

Yesterday, meeting in a Committee of the Whole, City Council discussed Kenney’s and Reynolds Brown’s competing proposals. Comments grew sharp at times. But the sense of the Council was many members will need more time to make up their minds on this controversy.

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