Soda Tax Bubbles Over at Senate Hearing

AT THE HEARING were State Sens. Scott Martin; Anthony Williams, who convened the hearing; Thomas McGarrigle; and Tina Tartaglione. Their colleague Scott Wagner, who is running for governor, canceled at the last minute.

BY TONY WEST

The only thing heard in the Pennsylvania Senate hearing at City Hall on June 23 was the roar of an angry crowd. City Council chambers were packed with protestors who come to make it impossible for the Senate’s Local Government Committee to hear beverage-industry complaints about Philadelphia’s Sweetened Drinks Tax. They were supporters of the Rebuild program that the tax is intended to fund – pre-K education, parks, recreation centers and libraries among them.

They unleashed nonstop chants and blasts on air horns from the moment committee Chair State Sen. Scott Wagner (R-York) convened the hearing, for 45 minutes without letup, until the committee gave up, packed their briefcases and left. It was a powerful demonstration of Rebuild lobbyists’ turnout chops: They let legislators know they face serious grassroots opposition if they dare to threaten this popular public-works program.

No doubt they sent a message to State Sen. Anthony Williams (D-W. Philadelphia), a beverage-industry alumnus who requested the hearing and was invited to sit in, as well as State Sen. Tina Tartaglione (D-Kensington), another invitee, whose district includes the region’s Coca-Cola bottling plant.

But it’s a message that will be respected less on Capitol Hill than in City Hall. If the General Assembly chooses to thwart the city’s authority to pass the Sweetened Drinks Tax, it can do so, by mustering a veto-proof majority. That seems unlikely at this hour, but it is possible.

Already there is talk that last week’s abortive hearing will be reconvened in Harrisburg, far from the madding air horns. And the testimony prepared by witnesses is on the Local Government Committee’s record, even though they were not allowed to answer questions from the panel about it. Their testimony will not leave the public record just because they were shouted down on that one day.

As the protest continued, small children entered the council members’ precinct and sat at their vacant desks, right under the eyes of the legislators.

Wagner has every reason to pursue this quest. As the first Republican entry into the 2018 governor’s race, he needs attention; and he needs Republican votes in the primary. While the tax may be a hit with many Philadelphians, it is not beloved by the city’s Republicans, who tend to be anti-tax and pro-small business.

The underlying question remains: Does our trailblazing tax do more good than ill, or vice versa? It’s too early to know yet, but we must hear reports from all sides in order to arrive at an answer.

Even though Wagner was in charge, this really was Williams’ show. And he handled the shutdown with grace and nuance.

“The dynamics behind the beverage tax are very complicated and there is a great deal of passion,” he stated later that day. “The revenue opens doors to children for pre-K and access to recreation centers, but the tax burden increasingly falls on the backs of those who can’t afford it – it is primarily the working poor and people of color being disproportionately impacted.

“We want to figure out how the state can find a viable revenue source to support good initiatives. When people from our city come to Harrisburg and ask for more money for Pre-K and parks, they are typically asked, how does this benefit Philadelphia? Why is it you don’t have enough money? Are you funding it properly? What is it you are asking us to do?”

“I certainly have been in a protest or two and I respect democracy working at full throttle, but we also need to understand that many of the people who came here to protest don’t live in Philadelphia. Those of us from Philadelphia have a responsibility to be accountable. Unfortunately, there was no opportunity to do that today.”

Wagner was less complimentary to his Philadelphia reception.

“These bipartisan public hearings are vital for both legislators and the public to learn about all sides of an issue,” he stated after the hearing. “There is a lot of passion on both sides of this issue and I respect those strong feelings. Unfortunately, some protesters would not permit the hearing to be conducted in a civilized manner. It’s disappointing that the residents of Philadelphia could not hear a balanced hearing as requested by Sen. Williams.

“I have never been one to shy away from passionate debate. But this trend of shouting down people on the other side of an issue has to stop. It is unproductive. It was unfortunate that due to the behavior of those in attendance, we were not even able to announce the cancellation of the hearing,” he continued.

SOME PROTESTORS waved signs defending the expanded pre-K programing that the Sweetened Drinks Tax is designed to fund…

But Wagner did affirm his committee would pursue concerns raised by the testimony it had already received. What counts is what was already written, not what was or was not spoken in City Hall last Friday.

One testimony on record is that of Danny Grace, leader of Teamsters Local 830, who deliver beverages from wholesalers to retailers. His case is that the tax is killing his members.

“As a direct result of the beverage tax, there has been a huge drop-off in sales of sweetened beverages in the city. As of this moment, 155 of our union brothers and sisters have been laid off. And these are family-sustaining jobs we’re talking about,” Grace wrote.

Grace argued that since Philadelphia is getting fewer beverage deliveries now, that means fewer jobs for warehouse workers and mechanics as well as drivers. He charged the soda tax disproportionately targets the poor, either ripping them off or driving them into illegal purchases. He said there is no evidence consumers are losing their sweet tooth for drinks; thus, Philadelphia is blowing away business to retailers in other counties, as city residents drive to the suburbs to do their shopping.

David McCorkle, president of the Pennsylvania Food Merchants Association, which represents 3,200 retail-food members and 150,000 employees, also submitted written testimony.

“The food industry, from retailers to the farm community, supports the expansion of pre-K services, funding for K-12 education, financial support for rebuilding Philadelphia and improvement of the parks and recreation programs,” McCorkle wrote. “However, the tax collection is falling far short of anticipated collection as demonstrated by Controller Alan Butkovitz. The average supermarket provides over 150 full-time jobs. In my opinion, if the tax continues, it will stop food-store development in Philadelphia.

“The result will be store closings and additional job losses.”

…WHILE OTHERS were upholding the cause of parks and recreation centers, another beneficiary of the tax. George Matysik of Philadelphia Parks Alliance was on the scene and actively led his contingent.

The tax did not lack supporters on the authorized

agenda of witnesses. Dr. Paul Mather, a heart specialist representing Penn’s Perelman School of Medicine, testified bluntly: “Sugary drinks are the single leading source of added sugars in the American diet and are associated with an increased risk of type 2 diabetes, heart disease and other chronic diseases.”

Children are drinking much more sugar than they should. Low-income children typically drink 25 times the safe level of sweetened drinks. So Dr. Mather will be happy if the tax depresses sugar consumption, even if it hurts beverage jobs and municipal revenue. Chronic sickness triggered by sweet drinks will be reduced, saving society millions of dollars and many lives.

Although Mayor Jim Kenney made a point of not selling the soda tax on its health merits, they are embedded in the idea. Better schooling and better recreation both lead to better health, the argument goes.

The health argument is potent in Philadelphia in 2017. “Eds and meds” are the dominant industry in town now. They will be heard, not just in the city but also in the Southeastern suburbs where many pharmaceutical firms are now located. Republicans represent many of these companies and employees. In the end, these lawmakers are unlikely to fight against their constituents; and there goes the Republicans’ veto-proof majority.

Councilwoman Helen Gym, an ardent advocate for public education, was the only council member to show up in chambers for the hearing, early. She requested to testify at the hearing, a request that was denied – and then proceeded to read prepared testimony anyway, before Wagner could gavel the hearing into order at 11 a.m.

Gym said later, “I think Philadelphia’s position is clear. City Council, the courts and the people have gone through 18 months of multiple hearings, negotiations and studies. They are overwhelmingly in favor of expanded pre-K and in infrastructure investment.”

Gym called the city’s soda tax “a reaction to a state that frankly has not done its work in educational opportunities and infrastructure investment; and has depressed wages by refusing to raise the minimum wage. Rather than come to Philadelphia, where we are trying to figure out ways to fix things locally, better to come up with a state partnership with all of our townships and cities. Set aside tax breaks for the uber-wealthy, for frackers and for gambling.”

   Send article as PDF