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Budget Fuss: Beverage industry tries, fails, to buy off Mayor Nutter
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Budget Fuss: Beverage industry tries, fails, to buy off Mayor Nutter
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Update: Well this is what I get for not checking my feeds before pounding the keys:
Read more about this at It's Our Money, Philly Clout, and Heard in the Hall.
According to various sources in City Hall, including Councilmen Frank DiCicco and Jim Kenney, members of the beverage industry have offered Mayor Michael Nutter $10 million toward obesity programs in exchange for his letting go of a proposed tax on sweetened beverages.
In addition, DiCicco said an offer was brewing from members of the soda industry to provide $10 million over two years to the city for health and wellness programs. He said those funds -- which would be provided if the proposed soda tax goes away -- could also help bridge the gap.
According to the mayor's office, it's not going to work. In an email about half an hour ago, spokesman Doug Oliver told CP:
The City would not accept an offer of $10m from the beverage association. It would not provide the City with the revenue it needs over the life of the five-year plan.
What does all of this mean?
On the one hand, there's the fiscal side of things: the mayor's proposed tax of 2 cents per ounce is supposed to raise about $77 million a year, $20 million of which would go to anti-obesity efforts; although they expect only about half of that, $38.6 million, in the first year. By those calculations, the mayor's right. A one-time $10 million gift, especially if it goes entirely to anti-obesity programs, doesn't balance our budget.
— BUT —
Finance Director Rob Dubow told Councilman Bill Green today that none of those proceeds would go toward anti-obesity programs this year.
And sources in City Hall say the administration has been bargaining around not two cents per ounce, but three-quarters of a cent, maybe even as low as half a cent per ounce – meaning the revenue could be as low as $14M or less for the first year and somewhere around 28.8 million in following years, by my calculation. With that revenue cut in half, how much, if any, will actually go to fight obesity?
Which makes this situation a little complicated: Mayor Nutter's refusal to take the $10 million could be seen as principled, yet without it – or, rather, if he has to compromise his tax too much to get it passed – it's not clear whether there will be any new anti-obesity funding at all.
Both the soda industry and Mayor Nutter appear to be fighting a symbolic battle, at least to some extent.
The industry likely opposes his tax — and is willing to pay him $10M to kill it — not so much because of what it'll do to them here, but because Mayor Nutter may be paving the way for similar taxes elsewhere (perhaps statewide taxes; perhaps a federal tax).
And it's precisely because he's paving the way, say many sources in Council, that Mayor Nutter is fighting so hard to keep this tax alive. He's staked no little reputation on being one of the first mayors to pull off such a tax.
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