By Pat Loeb

PHILADELPHIA (CBS) — Philadelphia’s beverage tax passed council by a wide margin last June, took effect in January, and in its first two months, raised nearly $12M dollars for anti-poverty programs.

Still, the beverage industry continues to campaign against it, converting the “No Philly Grocery Tax” coalition it formed in an effort to defeat the tax, into “Ax the Tax,” lobbying for a repeal.
It’s a fight the mayor does not shy away from.

“I am not going to apologize for being passionate for our kids,” Kenney said this week when asked about the sometimes combative tone of his defense of the tax. “If it’s me that’s the whipping post that’s fine, I’ll take and we’ll move forward and get our kids what they need to succeed.”

The one and a half cent an ounce tax is expected to raise $91 million a year to pay for expanded pre-k, community schools and renovations to parks, rec centers and libraries through a program called Rebuild.

The “Ax the Tax” coalition has questioned whether the tax will deliver what’s expected, warning sales have declined precipitously.

They also say those declining sales will force them to lay off workers and cut hours.

“The mayor is just refusing to accept that his tax is causing negative impacts,” says coalition spokesman Anthony Campisi.

Kenney counters that the coalition is overlooking the benefits.
“Soda companies should understand that, in a generation, we’ll have children who are educated and employed and tax-paying consumers who will be their best customers,” he says. “People will be drinking smaller portions and drinking less but apparently the numbers seem to be holding as what we thought they would.”

The tax, so far, is on target with the city’s early projections.

“That would indicate that our expectations on the drop off in consumption is accurate and theirs is a bit inflated,” said Kenney.

Even members of the coalition admit, off the record, that a repeal of the tax is unlikely but say they believe the continued campaign against it will yield benefits over time, indicating they intend to continue with it indefinitely.

The soda industry and its allies also continue their legal challenge of the tax, arguing it violates state constitutional provisions for tax uniformity and non-redundancy.

Common Pleas court ruled against the group but they appealed and Commonwealth Court is set to hear arguments in Pittsburgh on April 5th.

Regardless of the outcome, the case is likely to go to the Pennsylvania Supreme Court.

The city is delaying the Rebuild program until the court case is resolved and will delay further expansion of pre-K seats and community schools if the lawsuit is still in place in September.