Philadelphia 'Soda Tax' Battle Intensifies as Measure Moves Closer to Reality

— -- The so-called soda tax has moved closer to fruition in Philadelphia, but whether it will work is still a source of raging debate.

"This is going to hit consumers very hard,” Anthony Campisi, the spokesman for Philadelphians Against the Grocery Tax, told ABC News today. “This is a whole lot of money out of their pockets for more than a thousand items that they shop for at the grocery store. It hits lower-income people particularly because they can't drive out of the city to go shopping."

Supporters take a different view.

"It will fund the largest investment in education and neighborhood programs in decades,” Lauren Hitt, a spokeswoman for Mayor Jim Kenney, said today. “Over the next five years, it would provide over $400 million to pre-k, community schools and improvements to parks, rec centers and libraries."

The legislation, which has been adjusted since the mayor’s initial plan, Wednesday passed a preliminary City Council committee vote in favor of the proposed tax hike on sugary beverages. It now calls for a 1.5-cents-per-ounce tax increase for sugar-added and artificially sweetened soft drinks.

Revenue from the new tax, if approved, is expected to raise $91 million over the next year and will be used to fund pre-kindergarten expansion, community schools, reinvestment in parks and recreation centers and add to the city's general fund.

Mayor Kenney had originally proposed a 3-cents-per-ounce tax on sodas before it was lowered but broadened to include all sugar-added and artificially sweetened soft drinks.

"Any beverages that are artificially or sugar sweetened at the point of distribution" would be affected “if it’s less than 50 percent juice,” mayoral spokeswoman Hitt said.

The City Council committee also advanced Majority Whip Blondell Reynolds Brown's bill Wednesday that offers tax credits to merchants who sell healthy beverages in their stores.

"The legislation creates a tax credit of up to $2,000.00 to encourage merchants to provide healthy beverage options in their stores,” Reynolds Brown's office said in a statement today.

"Healthy beverages are defined as a non-alcoholic beverage that does not list as an ingredient the following: any form of caloric sugar-based sweetener, including, but not limited to, sucrose, glucose or high fructose corn syrup; or any form of artificial sugar substitute, including stevia, sucralose, neotame, acesulfame potassium (Ace-K), saccharin, and advantame."

Councilwoman Jannie Blackwell praised the sugary-beverage tax-hike, as opposed to the 3-cent proposal, saying, “A 1.5-cent-per-ounce tax increase on soft drinks will have a smaller negative impact on businesses and consumers; be more widely spread among consumers at both ends of the income spectrum; raise the funds necessary to make historic reinvestments in our young people and public spaces; and protect the city from uncertainty by increasing the general fund balance.”

But Campisi of Philadelphians Against the Grocery Tax said, “We think this is a very regressive way to fund city government. It also hurts small businesses. You look at your neighborhood grocery store, your corner store; these businesses operate on incredibly thin margins."

Campisi said his group – whose website notes at the bottom is “Paid for by the American Beverage Association” -- is also upset about the mayor's perceived lack of transparency about where the tax money is going.

"He [Kenney] has spent more than a million dollars in advertising for this tax," Campisi said "The message has been that we need this to pay for expanded pre-k and community schools; then 15, 20 minutes before the vote, the city's finance director comes in and says we are also going to use more than $40 million to plug a structural problem in the budget."

"This administration misled the public to where the funds are going."

Hitt called that claim "nothing more than a last act of desperation from soda lobbyists who have been trying to mislead Philadelphians with their 'grocery tax' rhetoric for months." She also countered that the mayor's office "spent no advertising on the next tax," but that "a pro-tax soda coalition was formed that put up some TV and radio ads."

She did not know the exact amount that was spent, but added, "It has been reported that the anti-soda tax coalition has spent $4.1 million on TV and radio ads alone."

A final vote on the "soda" tax is expected to take place next Thursday, according to Hitt.