Phila. City Council Again Spurns Mayor Nutter’s Soda Tax Plan, But Compromises on Property Tax Hike

By Jared Edgerton, Contributing Writer

One year ago, Mayor Michael Nutter proposed a two-cents per ounce tax on sugary drinks like soda, iced tea, sports drinks and coffee.  The so-called soda tax immediately became a controversial one and was ultimately voted down by the Council.

Fast forward to this month.  Nutter introduced the tax again, with one significant difference.  Instead of a proposal to combat obesity (in some Philadelphia neighborhoods 70% of children are overweight or obese), as it had been last year, the 2011 edition was pitched as a way for schools to cover budget gaps.

Despite the change in tactics the outcome was the same: Council voted against the soda tax, instead opting to increase property taxes by nearly four percent.

Nutter spent the week leading up to the vote aggressively campaigning to convince Council to enact the sugary drinks tax.  On Tuesday, he traveled to local schools to emphasize that the Philadelphia School District needed the City’s financial help to offset imminent program cuts and staff layoffs.

Nutter favored levying taxes on drinks because he believed that plan had a better chance of being adopted than an alternate proposal to increase property taxes and expected that soda tax revenue would yield more revenue for city schools. Until yesterday, the Council staunchly opposed raising property taxes after agreeing to a ten-percent property tax hike last year.

While Nutter traveled to schools, anti-soda tax protesters gathered outside City Hall. William Hamilton, president of Teamsters Joint Council No. 53. opposed Nutter’s soda tax plan, saying it would unnecessarily burden the working class and “cost good, hardworking jobs for this city.”  Currently 2,200 Philadelphia citizens work in the soft drink and brewery industry.

Amidst the protests outside City Hall, the Council members convened, with six of seventeen meeting with Council President Verna to discuss alternatives for balancing the school district’s budget.

Despite momentum against the proposal, Nutter pushed onward, stressing that if Philadelphia chose not to support a tax increase to fund schools it would be hard to convince state representatives to close the budget gap. Though the state Senate is working on a proposal to provide some education funding by dipping into the Commonwealth’s tax surplus, state Senator Vincent J. Hughes (D-Philadelphia), the highest-ranking Democrat on the Appropriations Committee, essentially confirmed Nutter’s claim: “If the city doesn’t add any new money to the table, don’t expect Harrisburg to add any new money,” he said.

On Wednesday, the mayor took to the airwaves in a live televised address in which he characterized the school budget shortfalls as a historic crossroads. He acknowledged the situation hovered “between bad and worse” and expressed sympathy to those who opposed a tax increase.  But it was necessary for Philadelphia to adopt the soda tax or a property tax increase, he argued, because the city must remain “committed to high-quality education.” At the end of the addres, he urged Philadelphia citizens to attend a hearing on the school budgets held on Thursday.

At the hearing, supporters chanted and sang in the halls outside the chambers, while protesters came with signs that read, “Say No to the Beverage Tax.” The Council eventually voted it down, but offered some compromise by backtracking on their previous opposition to another property tax increase.  Councilwoman Blondell Reynolds Brown explained the switch: “All of us knew we had to do something—soda [tax] fell flat—we had nine votes for 60 seconds.”

The property 3.85 percent tax hike, part of a package that will likely include a $10 million appropriation from Council and another $6 million from increased parking rates in parts of the city, is expected to raise approximately $53 million in extra revenue for the school district.

That figure represents roughly half of the $102 million that Philadelphia schools Superintendent Arlene Ackerman had petitioned the city to raise.

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