With several studies reporting conflicting findings on the impact of Philadelphia’s controversial sweetened-beverage tax, City Council has come up with another possible solution: yet another study.
Council approved a resolution Thursday to commission an “independent” study.
What might it find?
If other research completed since the tax took effect in 2017 is any indication, the only certainty is that its results are sure to be contested and spun by advocates on both sides.
And if the heated debate at Thursday’s City Council meeting was any indication, there is no end in sight to disagreement over the tax. Clashes over Mayor Jim Kenney’s signature legislation are likely to intensify as the May 21 primary for mayoral and City Council races approaches.
Since the tax on soda and other sweetened beverages took effect to fund pre-K, community schools, and improvements to parks, recreation centers, and libraries, study results have been varied. Those paid for by the beverage industry have concluded that the tax hurts businesses, but research funded by supporters of the tax has suggested that there is no adverse economic effect.
Councilwoman Maria Quiñones-Sánchez, who sponsored the resolution authorizing a third-party study of the tax’s economic impact, said Friday that Council now needs to hire a consultant and that the study would take several months. She said it would be different from other research because she hopes it will be based on businesses’ tax returns.
“This is not to argue ... people’s perceptions, but to really look down at some of these businesses, look at their tax returns, and see if there’s a pattern there,” said Quiñones-Sánchez, who was one of four Council members to vote in 2016 against the 1.5-cents-per-ounce tax on beverage distribution.
Quiñones-Sánchez and a group of her colleagues also introduced a bill this month that could change or repeal the tax. She said some changes, such as exempting products such as almond milk, should be considered even before the study is complete.
Councilwoman Helen Gym opposed the resolution. It will “breed cynicism and distrust on a signature initiative in this city,” she said.
“Now, let me be clear, because a lot of people wonder, ‘what’s wrong with a study?’” Gym said. “We’ve had plenty of studies that examined the impact of the beverage tax. ... How long are we going to allow this body to be used for the narrow interests of one particular lobby?”
Other studies so far include:
Catalina, a Florida-based marketing firm, found soda sales dropped in Philadelphia, while sales spiked at stores just outside the city. Catalina works with retailers but claimed to be an independent third party.
The American Beverage Association commissioned two studies — one by Oxford Economics and one by St. Joseph’s University professor John Stanton — that found sales at Philadelphia grocery stores decreased. Stanton said sales increased at stores outside the city.
Funded by Bloomberg Philanthropies — which supports the tax — researchers at Harvard University, the University of Pennsylvania, and Johns Hopkins University found that overall sales at chain stores in Philadelphia have not suffered.
An internally funded Drexel University study found consumption of sweetened beverages decreased after the tax took effect, based on a telephone survey of residents.
A study released this month from researchers at Stanford University, Northwestern University, and the University of Minnesota that received no external funding found that there was an increase in consumers leaving the city to shop, and that there was no significant decrease in sugar intake. (The Kenney administration questioned the study’s methodology, while those in the beverage industry said it validated their stance.)
As for the study funded by City Council, Councilwoman Cherelle Parker was quick to call it “political weaponry,” and said she has been getting calls from pre-K providers who are concerned about a possible repeal of the tax.
Others pushed back against the idea that the timing of the Council study and legislation was tied to the upcoming election.
“It was a necessary action,” Councilwoman Blondell Reynolds Brown said of her 2016 vote to support the tax. In a letter to Council President Darrell L. Clarke on Thursday, she asked to remove her name as a co-sponsor of the bill to change the tax — but she still supported the study.
“There is still value in getting subsequent information based on new evidence that research will give us," Reynolds Brown said.
Council members who spoke Thursday were in agreement on one issue: The programs funded by the tax should remain in place. Councilman Allan Domb said he’d consider lowering the rate of the tax. And the resolution calls for looking into a fee on single-use plastic bags as replacement revenue.
The Kenney administration and Ax the Philly Bev Tax, a coalition backed by the American Beverage Association, also publicly agreed on one concept: They welcome the study by City Council.
Anthony Campisi, a spokesman for Ax the Philly Bev Tax, said he sees it as a first step toward Council members realizing that the tax is harmful.
“That said, we don’t think that action from Council should wait for the conclusion of this study,” Campisi said. “Philadelphians know that the tax is hurting them and deserve quick action from City Council.”
Kenney’s administration, meanwhile, hopes the study will look at the impact of the programs funded by the tax, including the educational impact on students in free pre-K and community schools and the health benefits of taxing sweetened beverages.
“A thoughtful and impartial analysis would complement ongoing studies of the impact of the tax, and is particularly appropriate in light of the unrelenting stream of disinformation spread by the beverage industry,” said Mike Dunn, a spokesman for Kenney.
The Council resolution, which passed on a voice vote, also calls for holding hearings on the study after it is complete.