PHILADELPHIA (CBS) — Philadelphia’s city controller is concerned about a shortfall in collections so far on the controversial sweetened beverage tax, and it seems collections have been fluctuating since the tax took effect in January.
In the first two months, collections exceeded projections.
In the second two months, collections were higher but fell short of projections, and Philadelphia City Controller Alan Butkovitz says that’s a problem.
“If that trend continues, during the next year, they’ll be about $15 million off of their hoped-for $91 million.”
Butkovitz says, since every dollar of that $91 million is committed to universal pre-K, community schools, and debt service on bonds to renovate city facilities, the city either must find a supplemental revenue source for those programs or face a deficit.
Mayor Jim Kenney’s spokesperson Lauren Hitt says the city does plan to revise its projections for this year downward, but she disagrees that it’s cause for concern.
“It’s totally normal in a new tax to see fluctuations and that’s been verified by outside economists,” she said. “We have to look at the (big) picture here: This has already brought in $26 million. It’s already sent 2,000 kids to pre-K.
Hitt says the city remains confident it will raise the expected revenue next year. The fate of the tax still rests in court, where the beverage industry has challenged its legality.