A judge just dismissed a soda tax lawsuit against Philly

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Update: The soda industry tried to kill Philadelphia's soda tax with a lawsuit against the city, alleging the tax amounted to double taxation and that it would duplicate the sales tax in the city. A judge just dismissed the suit, filed by the American Beverage Association, and the city's soda tax will proceed as planed. This could set a precedent for other lawsuits filed by the industry to try and block soda taxes.

In June, the mayor of Philadelphia managed to do what no other leader in a major US city had accomplished: He got his city council to pass a sugary drinks tax. It’s a win public health advocates say will help curb the consumption of these beverages that are directly linked to obesity and diabetes.

Now, three major US cities — San Francisco, Oakland, and Boulder (as well as Albany, California) — head to vote on soda taxes of their own on November 8.

I reached out to Philly’s mayor, Jim Kenney, to learn about how he managed to get the 1.5 cent levy per ounce passed amid a fierce opposition campaign bankrolled by the beverage industry.

One aspect of his success seemed obvious: Instead of framing it as a win for public health and a loss for the soda companies, he repeatedly argued that the tax would be an economic boon for the city, bringing in millions of dollars in annual revenue. (The tax is expected to raise about $90 million a year.)

But Kenney told me that this battle against Big Soda was among the fiercest he has ever fought in his 23 years in politics. And it’s also not over yet: The industry has filed a lawsuit to try to shut him down again.

Julia Belluz

The soda industry spent millions of dollars fighting your effort to get this soda tax passed. What did that opposition feel like and how does it compare to other political battles you’ve fought during your career?

Javier Zarracina/Vox

Jim Kenney

It surprised me the scale of the money they’re willing to spend to keep a soda tax from happening. They are relentless.

I saw more negative ads about me during this campaign than I did during the mayor’s race. I’d get up and dressed every morning and first thing I’d see [on TV] is "Jim Kenney wants to tax your groceries." [Update, Nov. 4: The Philadelphians Against the Grocery Tax Coalition say this mischaracterized their ad campaign, and that they only mentioned the Mayor once. The Mayor's office stands by their characterization of the campaign.]

There were preliminary meetings we had with [soda industry representatives]. They were looking down their nose and sniffing, acting like they were going to kick our butts, and that we should take a contribution from them and let them pay for a program here and there. But we said the way to fairly do this is to impose the tax on the distributors. And they were offering a pittance compared to what we were going to raise in revenue.

It might not have been the most brutal fight of my career. But it was definitely in the top 10.

Julia Belluz

Why do you think you managed to prevail where so many other public health officials and political leaders have failed?

Jim Kenney

First of all, we prevailed, I didn’t prevail.

[Big soda] hired everybody they could find — public relations people, lobbyists.

But we had pre-K advocates, parks and recreation advocates, library advocates, religious folks — we had a cross section of people who were not paid to be lobbyists. It was truly a grassroots effort backed by an extremely competent staff.

Julia Belluz

But surely your framing of this tax campaign — moving away from the nanny-state frame of government and toward a revenue focus — was a deliberate choice?

Jim Kenney

I was watching the prior administration on two occasions try to make the health argument, which was rejected. [In both 2010 and 2011, Philly tried and failed to pass a soda tax.] Not that it wasn’t valid — but I think there’s something about Americans, and especially Philadelphians, that they don’t like being told what to drink, smoke, or eat.

But if you can identify specific improvements in neighborhoods and districts, I think you can more readily identify the value of the tax dollars, because it’s going to directly affect your life.

Julia Belluz

Unlike the votes in California and Colorado now, yours was not a ballot measure put to the voters. You still had to get a majority of your city council members on side to win and you won in a landslide (14 to 3). How did you do it?

Jim Kenney

I’ve been in council for 24 years. I knew we needed nine votes to pass anything. We appealed to each one of those folks individually. I knew them all — I knew the things they were motivated by — and I tried to frame the tax based on what I thought their motivation was.

Julia Belluz

Do you think you would have won if this was put to a popular vote?

Jim Kenney

Yes. Pew just did a poll on city attitudes, and the majority think the city is going in the right direction. The majority of people in every community think the soda tax is the right thing to do.

Julia Belluz

Some opponents of soda taxes have argued soda taxes are regressive, that they disproportionately punish poor people. Bernie Sanders even came out saying as much. What do you say to that?

Jim Kenney

I am disappointed. I generally agree with most of what he has to say. In this case, he didn’t know what he was taking about. We cannot tax people in Philadelphia at different levels. There’s a uniformity clause [in our tax code]. So Bernie’s argument that we should tax rich people more than poor people was not accurate because we can’t do that.

It’s also disingenuous to say poor people will bear the burden of the tax. It’s a tax on distributors. They can choose not to pass it on. If they chose to — that’s a decision they make as an industry. The other issue is that soda-makers market more soda in poor neighborhoods.

Julia Belluz

The soda industry has filed a lawsuit against your city, saying that since soda is already subject to Pennsylvania sales tax, and this soda levy will amount to double taxation. What is your defense? What if the industry wins?

Jim Kenney

We’re responding to their complaint … we’re in discovery. I can’t talk about our defense.

But we’re moving ahead. We are starting our pre-K enrollment [which is funded with the help of the soda tax revenue]. We are getting our documents together on our borrowings for our parks, recreation centers, and libraries. We’re working with council to come up with a community benefits program for employment … We have not stopped to wait to see what happens with this lawsuit.

Julia Belluz

What advice do you have for health advocates in other cities eyeing soda taxes?

Jim Kenney

Tie the revenue to specific improvements in the community — classrooms, streets, whatever it is they want to use the revenue for. They need to clearly identify the improvements that need to happen and sell it that way. People vote in their self-interest — I don’t mean it in pejorative way — but [voters think about what a tax will mean] when it comes to their kids.

Don’t be afraid of big soda. They are not that tough. They were very, very arrogant, rude, and they just think they have a right to these kinds of profits. I have nothing against them personally. But they were so dismissive and entitled, it was really kind of shocking.

This conversation has been edited for brevity and clarity.

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