A tax on beverage containers, proposed by Philadelphia City Councilwoman Blondell Reynolds Brown as an alternative to Mayor Jim Kenney’s sugary drinks tax, could generate as much as $94 million annually in revenue, according to documents leaked by council staffers.
At a closed-door meeting with colleagues and staff yesterday, Brown distributed revenue estimates for her proposal, broken down by tax rate. A 15-cent rate could bring in anywhere from $77 million to $94 million each year, depending on consumption and collection rates, according to her estimates.
The report also outlined several different projections for lesser rates of 10 or 5 cents and varying beverage consumption rates. The bill would tax everything from soda containers to bottled water (milk and formula would be exempt).
Brown had initially told the Philadelphia Inquirer her proposal – based on a similar tax in Baltimore – would bring in around $60 million. The councilwoman maintained that this was the most achievable option.
"Our projected revenue estimate of approximately $60 million per year assumes both a low consumer consumption rate and a very conservative collection rate by the administration," Brown wrote in a statement.
The administration has assailed this figure as insufficient to fund the raft of programs, like universal pre-K, that Kenney wants to achieve through his soda tax. But the most optimistic of Brown’s new projections are similar to the $95 million the mayor hopes to raise annually through his levy.
The councilwoman said her report suggested even more money could be on the table than she first thought.
"Even at low consumer consumption, if we assume a 90% collection rate, which the administration believes it will collect on the Sugar-Sweetened Beverage tax, our revenue projections jump to $77 million," she said.
For its part, the Kenney administration disputed nearly all of Brown’s figures.
“The projections … assume no reduction in consumption and a much higher per capita consumption rate than Baltimore had with a 5-cents-a-container tax,” wrote Kenney spokesperson Lauren Hitt in an emailed response. “In contrast, the $95 million per year the sugary drinks tax is projected to raise assumes a 55 percent drop in consumption.”
Yesterday’s meeting was held on the eve of Council’s Committee of the Whole, scheduled for 1 p.m. today. The container tax is among a variety of hot-button budget issues on the agenda, including further discussion of Kenney’s competing soda tax.
Both revenue proposals are expected to be tabled. Despite rumors circulating Tuesday that Brown could push for a vote on the container tax proposal, her office denied this in an email Tuesday evening.
Council has become increasingly divided on the soda tax issue, with the fissures occurring largely along racial lines. Although Kenney’s office is still officially pushing for a 3-cent tax, council insiders said allies were floating a 2-cent tax in legislative sessions, while Council President Darrell Clarke has signaled support for a 1-cent levy.
Neither faction appears to have enough votes at present to pass a bill, leading to continued horse trading. Brown’s proposal offers a third way, garnering some interest for spreading tax burden across a broader range of products.
Both pro- and anti-soda tax interest groups have opposed Brown’s measure.
“While we applaud the Councilwoman for furthering a robust debate around the budget, the administration cannot support the container tax because it would force us to cut the proposed pre-K expansion, community schools program and improvements to parks, rec centers and libraries by 30 percent,” Hitt wrote. “It would also place a regressive burden on families by taxing necessities like water.”