Title
Authorizing City Council's Committee on Finance to conduct a full and comprehensive public hearing on the Philadelphia beverage tax to review whether the tax is achieving its goals and to analyze potential solutions to stabilize beverage tax funding for critical investments such as approved pre-K programs, community schools, and rebuilding neighborhood-sustaining parks, recreation centers, and libraries.
Body
WHEREAS, On June 16, 2016, City Council approved a special tax of 1.5 cents per ounce on sweetened beverages levied at the distribution level; and
WHEREAS, As a result of this tax the City will be able to fund approved pre-K programs and community schools while also paying for costs associated with rebuilding important neighborhood-sustaining parks, recreation centers and libraries; and
WHEREAS, Proponents of the tax initiative argued that jobs created as a result of the tax in construction, schools and communities would offset job losses in the grocery business; and
WHEREAS, According to Pennsylvania Intergovernmental Cooperation Authority ("PICA"), the per ounce sugar-sweetened beverage tax has brought in $77.3 million in new revenue in the first full-year; and
WHEREAS, However, the new tax has consistently fallen short of monthly projections and is currently $15 million short of initial projections, and still $13.5 million short of revised projections as put forth in the Quarterly City Manager's Report; and
WHEREAS, A consequence of the tax has been that supermarkets and beverage companies have had to cut jobs or reduce hours for their workforce over the last year; and
WHEREAS, These lost jobs result in lost wage, business and sales tax revenues; and
WHEREAS, According to a paper from the National Bureau of Economic Research, taxable beverage sales declined roughly 38 percent in the months immediately following the implementation of the tax, and 10 to 11 months after the tax was implemented sales of taxable beverages were down approximat...
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