Philly Soda Tax Ruled Constitutional

City says funds withheld while state Supreme Court considered challenge

PHILADELPHIA -- Pennsylvania's Supreme Court moved July 18 to uphold a tax on soda and other sweetened beverages in Philadelphia.

The court issued a 4-2 majority opinion, saying the city didn't violate state law by instituting the 1.5-cents-per-ounce tax, according to a report by UPI.

The tax, enacted Jan. 1, 2018, is intended to fund Pre-K, community schools and improvements to parks, libraries and recreation centers.

Opponents of the tax argued it amounted to double taxation, piling on to statewide taxes, which is against the law according to the Pennsylvania state constitution.

Revenue in the first year of the tax also fell short of estimates by 15%, according to UPI, and City Controller Rebecca Rhynhart said in March that most of the money collected in the first two months of 2018 went into the general fund, not specified programs. City officials said money was being withheld as the government awaited the court's decision.

Following the ruling, Philadelphia Mayor Jim Kenney said an estimated $56 million in tax funds that had been put on hold during the litigation would now be spent on the programs.

"These programs, funded by the beverage tax, will fuel the aspirations and dreams of those who have waited too long for investments in their communities," Kenney said. "The City of Philadelphia will now proceed expeditiously with our original plans -- delayed in whole or part by nearly two years of litigation—to fully ramp up these programs now that the legal challenge has been resolved."

The tax added about $1 to the cost of a 2-liter bottle of soda and $2.16 to a 12-pack of 12-ounce sodas.

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