June 20, 2016
Philadelphia’s new soda tax was sold as a way to help kids, but trade and teachers unions — and city government — also stand to be big winners from the 1.5 cents-per-ounce tax approved last week.
The tax is expected to generate $91 million in the first year and up to $386 million over five years. About a third of the money will go into the city’s general fund, where it can be spent on anything.
Mayor Jim Kenney, who endorsed the tax after being elected last year, wants to spend the money on building community schools and refurbishing parks and recreation centers around the city. Jobs created by those projects are expected to be snatched up by members of building trades unions, which have been vocal supporters of the tax.
Political heavyweight John Dougherty, who is head of the influential Local 98 electricians union and the Philadelphia Building and Construction Trades Council, reportedly blasted opponents of the soda tax earlier this year.
According to reports, during a meeting in City Council chambers in May, Dougherty went “toe-to-toe” with Danny Grace, the head of Teamsters Local 830, which opposed the tax. Dougherty reportedly also warned against crossing Councilman Bobby Henon, who also backed a soda tax, when he said, “If you [expletive] with my boy, I’ll [expletive] with you.”
Dougherty later told the Philadelphia Inquirer he didn’t have a “tussle” with the Teamsters boss and that he didn’t use foul language.
“I didn’t say ‘[expletive] with.’ I said,’’Look, you guys play with Henon, lose my number,’” Dougherty said.
The Teamsters were against the soda tax because the price bump is expected to eliminate 2,000 soda industry jobs, including transportation positions held by Teamsters.
The American Beverage Association also opposed to the tax, which it says is “regressive” and “unfairly singles out beverages — including low- and no-calorie choices.”
“The fact remains that these taxes are discriminatory and highly unpopular — not only with Philadelphians, but with all Americans,” the ABA said in a statement. “Similar tax proposals have been rejected 43 times across the country in the past eight years, including twice in Philadelphia.”
Kenney argues that Philly kids stand to be the biggest winners because the tax will open public pre-K programs to about 6,500 more children. Supporters of the tax say that two out of three children in the city live in households too poor to afford preschool.
According to a study conducted by the city this year, the annual cost of pre-K is between $14,000 and $15,000 per child. The city says it needs about $60 million a year to run the program to reach as many kids as Kenney hopes. Critics say that estimate is unrealistic.
Republican Councilman David Oh, who voted against the tax, said his staff found $180 million in over-allocations to state agencies that could have been used to fund pre-K and community schools. Without raising taxes, Oh said, his plan would have produced $26 million for universal preschool, $4.2 million for community schools and $12.5 million to rebuild parks and rec centers.
“We need good programs and we should all do our best to support the new administration whenever possible,” Oh said. “But we also need jobs, opportunities, new investment, and better fiscal accountability from our government to our citizens. Otherwise, we’ll end up with none of the above, but the citizens will pay the tab.”
Pre-K advocates such as Councilwoman Helen Gym and the Philadelphia Federation of Teachers, which supported her election last year, are also being touted as soda tax winners. The expansion of public pre-K programs and the creation of up to 25 community schools could mean more jobs for union teachers.
The PFT also campaigned hard to elect Kenney last year and has backed the mayor’s plan to create more community schools, which provide social services in addition to educational facilities within neighborhoods.
“The PFT has been in favor of Mayor Kenney’s sugary drink proposal since its inception,” PFT President Jerry Jordan said in a statement. “We look forward to engaging with Council and the Mayor to ensure the implementation of pre-K and Community Schools is as effective as possible.”
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