Soda, pre-K, beer, and the latest in the fight over Philly beverage tax
Former New York City Michael Bloomberg is now in an advertising war with the American Beverage Association over the tax on sweetened beverages in Philadelphia.
One shows children in graduation caps holding hands and smiling. The other targets the fact that soda is now taxed at a higher rate than beer in Philadelphia.
Those advertisements represent the latest round of the battle over Philadelphia's tax on sweetened beverages, which has assumed some of the ugliness of an election campaign. Eight months after the tax went into effect, and as both sides wait to hear whether the Pennsylvania Supreme Court will take up the issue, money continues to pour into attempts to win over the court of public opinion.
As television and radio spots hit the airwaves this summer, the beverage tax fell short of initial projections for its first six months. And it raised $6.5 million in July, according to Mayor Kenney's office — less than the $7.7 million monthly average needed to reach a projected $92 million in fiscal year 2018.
As for the impact of the tax, each side claims the other's message is misleading Philadelphia residents. And asked why they are continuing to launch new advertisements after the tax has been in effect for eight months, the sides point fingers at each other.
Former New York Mayor Michael Bloomberg began running television and radio advertisements earlier this summer, showing children graduating from the city's pre-K program. Bloomberg has been an advocate for taxes on sweetened beverages across the country, and has spent more than $2 million to date in Philadelphia, according to a spokesman.
"Pre-K students all across the city put on their caps, received their diplomas, and graduated into kindergarten. And a small soda tax made the big difference," a narrator says in Bloomberg's television spot over footage of students in Philadelphia-funded pre-K, which had been expanded with the new tax revenue.
The American Beverage Association countered that message last week, launching a radio spot that attacks the city and the tax as hurting "hardworking Philadelphians" and bringing in less revenue than projected. Anthony Campisi, a spokesman for the Ax the Philly Bev Tax Coalition, declined to say how much was spent on the radio spot.
The antitax ad also refers to a Wall Street Journal editorial that criticized Philadelphia for taxing soda at a higher rate than beer. The editorial cited a Tax Foundation report that made headlines this summer for its claim that beer is "now less expensive than nonalcoholic beverages subject to the tax in the city" — a statement not entirely accurate.
The Tax Foundation compared the prices of sports drinks and lower-cost beers. But soda is still less expensive than equivalent amounts of Yuengling, Bud Light, and many other beers. (At Springfield Beer Distributor on Washington Avenue, for example, a case of Yuengling is $19.44, while a case of soda is $13.99, soda tax included.)
Beer is, however, taxed at a lower rate than soda. Pennsylvania's excise tax on beer is 8 cents per gallon. The city's tax on sweetened beverages is 1.5 cents per ounce, or $1.92 per gallon.
Campisi said that the latest radio spots funded by the American Beverage Association were created to counter Bloomberg's pre-K graduation ads.
"We plan on continuing our campaign because outsiders like Michael Bloomberg shouldn't be allowed to hijack our public policy and use Philadelphia families as pawns in an ideological campaign that costs jobs and raises prices for working families," he said.
Wolfson, a spokesman for Bloomberg, said the former New York mayor decided to make advertisements to counter the attacks already released by the beverage industry. Bloomberg has spent about $2 million in Philadelphia advocating for its beverage tax to date, Wolfson said.
"The soda industry seems pretty intent on continuing their campaigns against these initiatives even after they pass," Wolfson said. "We're going to engage alongside them."
Kenney's spokeswoman, Lauren Hitt, said the mayor did not know that Bloomberg was preparing to run advertisements promoting the tax. But she placed blame for the ongoing advertising war on the tax's opponents.
"Bloomberg just started running ads this summer," she said. "The American Beverage Association has been running ads uncontested pretty much since we proposed the tax last spring."