PHILADELPHIA (CBS) — Wednesday marked the first day of PHL Pre-K, the city’s locally funded pre-k initiative as 2,000 tuition-free seats have been opened thanks to the city’s sugary drink tax.
Meanwhile, some shoppers say they’re experiencing “sticker shock,” thanks to that same tax.
The city is reminding shoppers that the intent of this law was to tax the distributors of sugary drinks. However, that is being passed on to the customers and in some instances, the cost related to this tax is higher than the soda itself.
“I love that stuff,” said Elois Dickerson about sugary drinks. “But, I can’t afford it.”
Philadelphia plans to use the added revenue to fund pre-k and make improvements to parks and libraries. On day four of the tax that the city has imposed on distributors, there is widespread finger-pointing on exactly who should be picking up the tab.
“A little bit of the confusion that we’re seeing is that even though the law doesn’t require this, some retailers are opting to pass along some, or all, of the cost of the tax,” said Marisa Waxman, the city’s revenue commissioner.
We found that in mostly all cases, this new tax on distributors was being passed on to the customer.
Anthony Campisi represents the American Beverage Association locally.
“Everybody testified before city council that this tax would be passed on,” Campisi said.
Campisi defended the beverage industry passing on the tax saying that profit margins are too small and the tax is too high.
The city hopes that if businesses are passing on the added cost, they’re doing so transparently. Jeff Brown, the owner of a ShopRite location, says he thinks the industry will reshape how it packages its products.
“Universally, everybody likes the idea of pre-k,” he said. “But, when they looked at their register receipt and saw that they spent $10 more in tax than they did before, they’re very upset.”
In the meantime, the beverage industry has a case on appeal in commonwealth court working to overturn the sugary drink tax.