How Does Philadelphia's Sugary Drink Tax Proposal Stack Up?
By Steve Tawa
PHILADELPHIA (CBS) -- If Mayor Jim Kenney's three cents-per-ounce sugary drink tax proposal is approved, city budget makers expect a 55 percent decline in sales the first year, followed by annual one percent drops. It also translates to a 55 percent estimated jump in prices.
It would be the highest soda tax in the nation.
City Finance Director Rob Dubow says they are assuming all of the higher costs will be passed on to consumers, which he says may not happen.
"In some ways, that makes these projections conservative," said Dubow.
Berkeley, California, was the first U.S. municipality to adopt a tax on sugary drinks, at a penny per ounce, as of May of 2015, but Philadelphia Deputy Revenue Commissioner Marisa Waxman says the data is only preliminary.
"They're more anecdotal, and they're only based on three months of data," said Waxman.
In a ballot question in November of 2014, 75 percent of the voters in Berkeley approved. That same night in next door San Francisco, a two-cent-an-ounce tax on soda was defeated. In Berkeley, all of the money goes into that city's general fund.
Former Mayor Nutter twice failed to persuade Philadelphia City Council to pass two cents per ounce soda taxes in 2010 and 2011.
In 2014, Mexico introduced a nationwide tax of one peso per litre on sugary beverages, which equates to roughly a 10 percent increase. By most accounts, Mexico consumes more soda per capita than any other country.
