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Debate Over Proposed Soda Tax Heats Up As Decision Deadline Nears

PHILADELPHIA (CBS) -- Philadelphia City Council held a hearing Wednesday on a beverage container tax that's seen as an alternative to Mayor Jim Kenney's proposed soda tax to fund universal pre-K and city improvements.

Debate is heating up as the deadline for a decision draws closer.

Which is more regressive-- a three-cents-an-ounce soda tax or a 15-cent per beverage container tax? That was at the heart of the city council hearing with finance director Rob Dubow arguing the container tax, applied to all beverages, even water, would be more regressive.

"If you're talking about impact on low-income neighborhoods," he said, "they will have fewer choices for not paying this tax."

Dubow said during the hearing that a two-and-a-half percent tax would fully fund the programs, but a container tax would bring cuts.

"That would likely mean some combination of fewer pre-K slots, less support for providers to become high quality providers, fewer community schools, less investment in parks, rec centers and schools," he said.

But several council members, including council president Darrell Clarke, argued that a three-cents-an-ounce tax on soda -- consumed more heavily in low-income neighborhoods -- would be more regressive and said it would never pass.

"I do not believe there is support for a three-cents-an-ounce tax," Clarke said. "And I think most people know that."

Clarke said he wants to fund the mayor's proposed initiatives. He showed a strong preference for the bottle tax but says he's prepared to raise real estate taxes, if necessary -- anything but the soda tax.

"It's ridiculous," Clarke said.

He said the mayor can't get the necessary nine votes for the soda tax. A spokeswoman for Mayor Kenney said the administration disagrees, and notes even at a lower rate, a soda tax would raise more than a container tax.

Council members have another two weeks to make a decision, if they want to recess as scheduled June 16.

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