Philly has had a ‘soda tax’ since 2017. One lawmaker wants the city to consider repealing it.

City Councilmember Jimmy Harrity wants to revisit the contentious debate that led to the 2017 creation of Philadelphia’s sweetened beverage tax, arguing that the levy has cost the city jobs and will eventually prove insufficient to pay for the programs it was enacted to support, such as subsidized prekindergarten.

“We‘re going to keep on pulling more money out of the general fund each year, taking away from other programs,” Harrity, a Democrat, said Monday at a hearing of Council’s Labor and Civil Service Committee, which he chairs. “If we were in business and these numbers were the numbers of the business, we wouldn’t be in business long.”

The tax, which is paid by distributors of sweetened beverages sold in Philadelphia, is 1.5 cents per ounce. Council approved it in 2016 despite vociferous opposition from the beverage industry and Teamsters Local 830, which testified Monday the tax has led to 1,000 of its members who drove trucks for distributors losing work.

Harrity, an ally of the Teamsters, noted that revenue from the tax has declined as Philadelphians either drink fewer sweetened beverages or find ways to purchase them outside the city. The tax produced about $73.4 million in the 2023 fiscal year, but only $64.4 million last year, he said.

» READ MORE: How Mayor Kenney’s soda tax ignited controversy and impacted Philadelphia

For Harrity, that means that the city should consider eliminating the “soda tax,” as it is widely known, in favor of a more “sustainable” funding stream. He did not offer any alternatives.

But based on his colleagues’ reactions, it is unlikely the tax will be reconsidered in a serious way any time soon.

Several Council members, public health advocates, and childcare industry representatives defended the tax, which was championed by former Mayor Jim Kenney. They noted that research by the University of Pennsylvania indicates it has been a public health success story that has helped to keep down obesity rates.

» READ MORE: Philly’s soda tax had an impact on health in the city, new research finds

And they stressed its critical role in paying for the three initiatives that Kenney launched alongside the tax: PHL Pre-K, which provides free childcare to 5,250 kids; community schools, which offer a multitude of services to families in 20 Philly schools; and the Rebuild program, which renovates and improves recreation centers and playgrounds.

“We have to make tough decisions that will actually benefit the greater good, and that’s what we did here,” Democratic Councilmember Rue Landau said during the hearing, adding that “the majority of us up here on this panel think this is a great investment.”

Mayor Cherelle L. Parker, a Democrat who voted for the tax as a Council member, also remains supportive of it.

“We would not have been able to fund these programs without that beverage tax money,” said city Finance Director Rob Dubow, who has held his role under Parker, Kenney, and former Mayor Michael A. Nutter. Nutter twice tried unsuccessfully to implement a “soda tax” before Kenney succeeded.

Dubow told lawmakers that the decline in the tax’s revenue over time was always part of the plan and that city leaders intended for the regular city budget to make up the difference for funding Rebuild, pre-K, and community schools when they created the tax. The moment when the soda tax began taking in less money than the city pays out for the three programs it helped launch was the 2024 fiscal year, he said.

“We pay for it out of the general fund, which is what we always intended we would do,” Dubow said.

This year, Rebuild, pre-K, and community schools are projected to cost $110 million, Dubow said. Of that, $73 million pays for the 5,250 slots in the city’s pre-K program.

Councilmember Brian O’Neill was the only other Council member besides Harrity to vocally criticize the tax at Monday’s hearing.

O’Neill, Council’s lone Republican, noted that Council members have traditionally had control over capital funding for Philadelphia Parks and Recreation projects in their districts. That money, he noted, is split evenly among the 10 district Council members.

Rebuild, he lamented, instead gives the power to decide which projects move forward to the mayor’s administration. Consequently, he said, the program has produced uneven results and overbudget and unnecessarily ambitious playground and recreation center renovations.

“This program — Rebuild, they call it — they didn’t decide to bring playgrounds up to some minimum level where people over the years may not have spent their money well,” O’Neill said. “They decided to build Taj Mahals in many cases. … You know what happens when you build a playground and spend tons of money on it? … All the playgrounds around it look terrible.“

That comment did not go over well with some of his colleagues.

“My community benefited from a rec center that was through the Rebuild program,” said Councilmember Kendra Brooks, a member of the progressive Working Families Party who lives in Nicetown. “It’s not a Taj Mahal. It’s a quality rec center in the middle of North Philadelphia. It does not have everything, because I personally went and bought a refrigerator.”

And Councilmember Nina Ahmad, a Democrat, questioned why building grandiose rec centers would be a problem in the first place.

“Why not Taj Mahals for all our folks? Why not have the best-quality rec centers so our children want to go there, our children want to spend time there?” Ahmad said. “We live in a first-world country and yet we are begging for scraps for our youngest citizens.”