Will beverage-tax outrage bubble over with political retribution?
The implementation of any new tax that hits consumers at the cash register tends to spark outrage, including threats of political peril for the elected officials who supported it.
The implementation of any new tax that hits consumers at the cash register tends to spark outrage, including threats of political peril for the elected officials who supported it.
And so it was last week, as many took to social media and online petitions to revile Philadelphia's new 1.5-cent-per-ounce tax on naturally or artificially sweetened beverages that began showing up on some store receipts on Jan. 1.
Many seemed surprised by the tax, despite extensive coverage by local media for months before and after it became law and then survived the first round of a legal challenge.
Others were furious about the cost — an extra 30 cents for a 20-ounce bottle of soda, for instance — once they began digging deeper to pay for it.
So will Mayor Kenney, who pushed for the tax last year to pay for pre-K education and other programs, and the 13 members of City Council who voted for it, face political consequences?
Another controversial tax on popular beverages, implemented 22 years ago and still going strong, may hold the answer.
Philadelphia's 10 percent liquor-by-the-drink tax started appearing on bar tabs on Jan. 1, 1995, after City Council approved it on a 9-7 vote the year before. That tax helps fund the Philadelphia School District.
But first, we have to note one key difference: Kenney's tax is on distributors, who passed on the cost to consumers. Former Mayor Ed Rendell's tax hits booze drinkers directly.
Still, then, as now, business owners encouraged customers to lobby City Council directly. Signs sprung up at City Hall meetings suggesting the next election could be tough sledding.
A court challenge was filed, struck down, and appealed to a higher court.
The tax was knocked as "discriminatory" and a job-killer.
And then the money started rolling in.
Each year, the liquor-by-the-drink tax breaks the previous year's record for income. It brought in $65.8 million in the fiscal year that ended June 30, exceeding expectations.
Timing matters when it comes to political peril in passing new taxes.
Kenney won 13 City Council votes for the tax in June, a mere six months after taking office. He and those Council members, all Democrats, are not up for reelection until 2019 — meaning the Democratic primary is two years and four months in the future.
In political terms, that's a comfortable cushion.
Rendell, at the urging of then-City Council President John F. Street, pushed through the liquor-by-the-drink tax in 1994, the third year of Rendell's first term.
Rendell, Street, and the eight other Council members who supported the new tax stood for reelection in 1995, the same year it was implemented.
Rendell's Republican opponent that year, Joe Rocks, vowed to repeal the tax.
Still, Rendell won reelection easily, with 77 percent of the vote.
Two Council members who switched late in the game to support the tax — Dan McElhatton and Joe Vignola — were seen as more vulnerable that year. McElhatton lost the Democratic primary. Vignola resigned before that primary to take a job at the state agency that oversees Philadelphia's finances.
Street said the new tax won't be politically "problematic" for Kenney or Council members if it provides good city services and avoids scandal on how the money is spent.
"If the tax survives a legal challenge and appropriate service is provided, it's a winner," Street said. "The only downside is a poorly administered [pre-K] program that leads to sustainable allegations of fraud, mismanagement, or general incompetence."
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@ByChrisBrennan