Councilwoman Sanchez: Philly “going to lose” legal challenge over soda

The chair of Philadelphia City Council’s Appropriations Committee said that the city will likely end up in litigation over Mayor Jim Kenney’s proposed soda tax, if council approves it in a vote next week.

“I’m concerned we’re going to end up in litigation that we’re potentially going to lose,” Councilwoman Maria Quiñones Sánchez said in a phone interview. “We need to agree on a Plan B.”

Industry groups had previously threatened to take the soda tax fight to court. Randall Miller, a political science professor at St. Joseph's University, concurred.

“Even if it’s futile, there has to be a court challenge,” he explained. “There’s no question. You think the soda industry is just going to let this pass?”

The comments came a day after Sánchez introduced a resolution, on behalf of Council President Darrell Clarke, calling for finance hearings into the use of soda tax revenues. That request was the result of an 11th-hour revelation that surpluses from the tax would be used to prop up the city’s dwindling general fund balance – the difference between city revenues and expenses – which in turn affects the city’s bond ratings.

Sanchez, whose district includes soda bottling plants, has long opposed the levy. But as chair of a committee that oversees the city budget, she framed her current concerns around Philadelphia’s dependency on a tax with diminishing returns that might not make it out of court.

She said that in a crucial committee meeting this week, council had been poised to agree on a 1.25-cent rate until the administration revealed that it needed the 1.5-cent tax just to keep the fund balance from hitting a critical lows. Sanchez was concerned that the administration was relying too heavily on the tax to avoid making painful budget cuts early in Kenney’s term.

“There were no cuts made – there was no zero-based budgeting,” she said of the proposed 2017 budget. “Over the next year we need to look at all these programs so we can be more efficient about what kind of services we provide.”

For their part, administration sources said supposed “outrage” over the fund balance issue had been concocted by Clarke and anti-tax advocates as a parting shot after attempts to kill the tax failed. Mayoral spokesperson Lauren Hitt said the administration was prepared to fight off any legal challenges in time to fund programs supported by the tax, like pre-K and municipal building repairs.

“A legal challenge would not delay the initiatives,” she said. “In order for the initiatives to be held up, challengers would need to obtain an injunction, which is extremely unlikely, as City Solicitor Sozi Tulante has advised that the tax is well within council’s legal authority to enact.”

Hitt said the administration had, in fact, cut some $23 million from the city’s overtime budget and some number of smaller programs, like grants to the Greater Philadelphia Film Office.