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Philly's soda tax faces hearing, and a new threat?

The state Senate will hold a hearing on Friday, June 23, to discuss Philadelphia's sweetened beverage tax. And rumors are swirling in Harrisburg that state legislation may be proposed to preempt the city's ability to tax those beverages.

The 2015 Democratic primary for mayor of Philadelphia could make a curious intersection with the 2019 primary in City Hall on Friday.

The issue: the city's sweetened-beverage tax, which since January has added 1.5 cents an ounce to the cost of most sugary and diet beverages sold in Philadelphia.

The players: State Sen. Anthony Hardy Williams and City Controller Alan Butkovitz.

The target: Mayor Kenney?

Williams, who opposes the tax, requested that the Senate's Local Government Committee hold a hearing on the issue, not in Harrisburg but in Philadelphia, in City Council chambers.

Butkovitz, another critic of the tax, plans to testify at that hearing.

Williams, once considered the front-runner in the 2015 race for mayor, lost to Kenney in the primary.

Butkovitz, who last month lost his bid for a fourth term, appears to be counting on support from the American Beverage Association (ABA) for a potential 2019 challenge to Kenney.

So we have potential for political drama. But is the tax really in any danger?

Williams on Friday said the ABA, in a meeting Tuesday, told him legislation to preempt the tax could be proposed by a member of the state House. Williams also said he would not support that and the ABA told him it is not pushing for that.

State Rep. Kate Harper, a Montgomery County Republican and chairwoman of the House's Local Government Committee, said she, too, had heard that legislation may be coming up to knock down the tax. So far, she hasn't seen it.

This is when the calendar matters.

House and Senate members are in Harrisburg, working toward the June 30 deadline for a state budget. In that time, other pieces of legislation can catch fire and pass quickly, inasmuch as the legislators are assembled, waiting on the budget.

"It's a very busy time in the Capitol," Harper said. "It is possible that something could move because an awful lot of bills are moving."

While this was brewing, the Kenney administration put up a pair of wins on the tax.

The state Commonwealth Court last Wednesday, in a 5-2 ruling, shot down an ABA appeal of a Philadelphia Common Pleas Court ruling in December that declared the tax legal. The ABA is expect to appeal to the state Supreme Court.

And on Thursday, City Council gave preliminary approval to a program that will spend some of the tax proceeds on parks, recreation centers, and libraries. Final approval for that program, know as Rebuild, is set for a Council vote Thursday.

A day after that, Williams gets his hearing, even though he is not a member of the Local Government Committee. Williams said he supports the programs the tax would fund, including preK education, but is concerned about the impact the levy has on employment and low-income residents.

He acknowledged the political optics of going after Kenney's key achievement but noted there are other state legislative issues where he supports the mayor's position.

"I've had to explain to the mayor, I will agree and I will disagree," Williams said. "That's my job."

Lauren Hitt, a spokeswoman for Kenney, on Friday called talk of preemption legislation "a lot of rumors" and dismissed the upcoming hearing as part of a public relations effort to attack the tax.

She noted that Williams is a former Pepsi executive who "has been very engaged" in that effort, including a legal brief filed by three dozen state legislators in February supporting the ABA's appeal to Commonwealth Court.

Hitt's final point was her strongest: If the General Assembly pushes to undo the Philadelphia tax, those legislators would politically own the defunding of preK education, community schools, parks, recreation centers, and libraries in the city.

That may be a price they're not willing to pay.