PHILADELPHIA – For today’s Local Government Committee Hearing in Harrisburg on the Philadelphia Beverage Tax, testimony was submitted by economists, pre-k providers, the Mayor, Philadelphia’s City Council President, doctors and other Philadelphians supportive of the tax. A sampling of their testimony is provided below and full testimonies can be provided upon request.  The Philadelphia Beverage Tax will ultimately fund 6,500 pre-k seats annually, 25 community schools and $500 million in improvements to parks, rec centers and libraries. Since it was implemented in January 2017, the tax has already sent 2,000 kids to free, quality pre-k, created 250 living wage jobs in early education and supported 11 community schools that have connected residents with seven thousand pounds of food, 1,180 items of clothing and 120 summer job and career exposure experiences for students. Seventy-five neighborhood residents have also gained employment through a training hosted by Community Schools.

Council President Darrell L. Clarke & Mayor Jim Kenney: “While several funding alternatives were proposed and considered, an overwhelming majority of City Council determined that 1.5-cent-per-ounce tax on sugar-sweetened and artificially-sweetened soft drinks was the broadest, fairest funding option…Philadelphia’s prominent community organizations have advocated for the tax, including but not limited to the African-American Chamber of Commerce of Pennsylvania, New Jersey and Delaware; the Philadelphia Opportunities Industrialization Center, or Philadelphia OIC; and Ceiba….. Since the program’s launch in January, 19 participating pre-K providers have earned new, high-quality scores in the state’s STARS program… The City’s new community schools program is equally impactful. Over 70 percent of our community school students live at or below the poverty line… This tax and its associated programs represent an innovative, cost-efficient local funding solution to solve universal challenges. The City of Philadelphia — which has continued to pass balanced budgets and increase investments in our children, while actually lowering taxes in the next fiscal year and significantly improving our credit rating over the last five years – has continued to focus on local solutions.”

Robert P. Inman, Professor of Finance, Economics, and Public Policy at the Wharton School of the University of Pennsylvania: “As an economist my concern is to ensure that new public expenditures are financed as efficiently as possible and that the additional revenues from the tax are allocated to a public service that provides benefits in excess of the cost of the tax. This is certainly the case for the Beverage Tax and the allocation of its revenues to pre-k education…There is no better investments for cities today than to spend money on pre-k programs whose benefit to cost ratio is 12:1, as estimated by Nobel Prize winner Professor James Heckman of the University of Chicago. From the perspectives of the least costly tax and the best allocation for the tax’s revenues, the decision by the City to use a Beverage Tax to fund pre-k education is a prudent and wise use of citizen resources.”

Dr. Gill-Phillips, Director of Pee Wee Prep in West Philadelphia: “I can personally attest to the positive impact that PHLpreK is having on small, women and minority owned businesses like mine. Because of the 90 seats we were awarded, I’ve hired eight new teachers so far and increased hourly wages for all my educators and support staff… Another benefit of PHLpreK is that unemployed and underemployed parents are now able to focus on seeking full-time employment or enrolling in continuing education programs. More opportunities arise for parents when they have access to reliable, quality child care programs in their neighborhood.  As a result, the overall dependency on public assistance will decrease in the long run …. Philadelphia is known for its staggering deep poverty, but far too many families can also be categorized as ‘working poor.’ These families often do not qualify for federal or state subsidized pre-K which means they either forego preschool altogether or opt for lower quality options that may not even adequately prepare their children for kindergarten. Because PHLpreK is open to all families, regardless of income level or employment status, children from low and middle income families are not excluded from quality early learning because of their family’s household income….Some argue that the tax disproportionately impacts low-income families more than other economic groups, but from my vantage point the benefits for low-income families and people of color far outweigh the cost…Finally, it is contradictory for legislators who oppose the beverage tax to also be in favor of quality early childhood education. Historical efforts to break the cycle of poverty through education have been met with big business or big government resistance. To repeal this tax would be a blatant attack on the pursuit of high-quality education for inner city children.”

Jonathan Kirch, American Heart Association and American Stroke Association: “Tragically, children in low-income families consume two-and-a-half times more than their peers in higher-income neighborhoods, and this is due to aggressive marketing by the beverage industry aimed at these market segments…. Researchers at Harvard University have projected that over a ten-year period, the tax in Philadelphia will reduce consumption of sugary drinks enough to prevent nearly 20,000 cases of type 2 diabetes and reduce the incidence of heart disease, stroke, and obesity. As a result, the researchers forecast more than $76 million in health care cost savings over that span…. Stories of beverage industry job losses have grabbed the headlines centering the blame on the sweetened beverage tax. However, according to interviews with beverage company executives, industry job losses are being driven by shifts in customer taste preferences toward healthier beverages that are upending the companies’ traditional business model…. One of the primary philosophical tenets of modern conservatism would be that the level of government closest and most nearest to the people is best suited to determine the policy solutions to their issues and address them locally—with local resources and accountability to local voters. We ask that you respect the innovative problem solving that Philadelphia’s elected lawmakers undertook to craft a local solution to a local need.”

Jim Krieger, Healthy Food America: “The World Health Organization, American Heart Association, American Medical Association, Institute of Medicine, and American Public Health Association all recommend taxing [sugary drinks].  Thomas Frieden, immediate past director of the Centers for Disease Control and Prevention, said sugary drink taxes are ‘the single most effective measure to reverse the obesity epidemic’…. Studies on the impacts of a tax on sugary drinks on economic impacts are now available from Berkeley and Mexico. The findings are helpful in addressing concerns regarding the potential for job loss or higher consumer grocery costs, which are frequently raised by the soda industry. In Berkeley, a study covering the first year of tax implementation found – after analyzing 15.5 million grocery transactions – that there was no significant change in consumer grocery bills. People simply purchased different and healthier beverage products that are taxed. This is good news for consumers – especially those with lower incomes – as well as business owners concerned about how a tax on sugary drinks would impact their store revenues. Additional data from the City of Berkeley shows that food sector jobs have increased by 7% and food sector revenue has increased by 15% since the tax was implemented. Data out of Philadelphia’s Department of Revenue shows that wage-tax collections from beverage-related businesses actually rose in the first six months of 2017 after the tax began, compared with a year earlier, even outpacing the overall six-month growth for all industries. Findings just published in September 2017 concluded that Mexico’s tax on sugary drinks and junk food had no impact on food and beverage sector jobs, or on overall national unemployment rates.”

Donna Cooper, Public Citizens for Children and Youth: “None of the minority or women owned pre-k businesses are testifying today about their improved profitability, 14 of these businesses are in Senator Williams’ district, alone.  None of the nearly 300 new pre-k employees are at this table sharing the impact of being employed and being paid a reasonable wage.  There are no low-income families here today to tell you about how the expansion of pre-K for nearly 2000 children already has made it possible for them to go to work or college and in either case has made it possible for them to support their families.  And, for all the talk about lowering the cost of government, no school finance professionals are here to share the dramatic impact that this pre-K expansion is certain to have on reducing spending for special education.  The absence of these voices speaks legions ….. Isn’t this the biggest complaint about Philadelphia in Harrisburg: that we always have our hand out to the state asking for more?  This time Philly did it with its own money and now you question our authority to do all these great things for our kids.  We didn’t ask Harrisburg for a dime and somehow that still doesn’t sit well with upper chamber…All told there were more than 43 hours of City Council hearings where hundreds of experts and interested Philadelphians testified.…I’ve been around the halls of power for nearly 30 years and I have never seen elected officials more appropriately discharge their duty as these Philadelphians did when deliberating and enacting the soda tax.”