City Hall on Thursday finally passed the budget and officially granted Mayor James Kenney his wish of taxing sugary drinks. But if you think that settles it, guess again.
It wouldn't be surprising if the city were hit with a lawsuit by the American Beverage Association (ABA) — and by the looks of it, they may actually have a legitimate case against us. Pennsylvania's Constitution states that taxes must be evenly implemented across the state. In other words, our city’s particular tax hike on sugary beverages could be considered a violation of that rule.
Currently, the Kenney administration has mentioned that the tax isn’t being placed on the consumer, but the distributor. However common sense economics 101 teaches us that any additional expenses that goes to a distributor will come down on the consumer — so again, something doesn’t seem right here.
The argument for the possibility of this tax being unconstitutional wouldn’t be so scary until we also look at the other possible consequences that may follow. If our city were to get sued over this we could face a major delay in funding the pre-K and recreational programs that caused all of this to go down in the first place. And even worse, if the ABA were granted a preliminary injunction against the city to prevent it from collecting taxes until the case is formally settled, we wouldn't be seeing any improvements until after Kenney’s first term.
But chances are that ABA won’t win an injunction and Philly can still collect the tax until the case is completed. And if the soda industry wins — which could be a strong possibility — the city would have to pay them back the nearly $200 million if the sugary beverage tax is deemed unconstitutional. And then what will the nation’s poorest major city do?
Again, what in the Hell was City Hall thinking?
All of this sounds horrible and looks lazy based on the simple fact that our local elected officials never really fought to have a serious plan B — they just renegotiated plan A. And as a result of that negotiation, an additional 20 percent of the tax that was supposed to be geared toward funding citywide pre-K is now being repurposed elsewhere. So, this is becoming less about our kids and more about the city’s financial needs beyond them.
I will just say what nobody else wants to say: our elected officials are becoming cowards. They won’t step up to the private sector and demand that they pay their fair share in contributing to our city’s budget. City Council leaders won’t vote against the mayor’s plan even though they know many of their constituents will suffer a great deal from this. Consequently, City Hall is losing its backbone altogether.
It’s clear that Kenney owes a few labor powerbrokers in the city, but I never thought I would see the day that City Council would let him get away with it.