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To Temple University, it was a perhaps innocuous announcement — the city’s sweetened beverage tax would force a hike in board rates for the coming year.
The university quickly discovered it had stepped into perilous territory.
Within minutes, Mayor Kenney’s communications team was questioning Temple’s numbers, calling other universities, and responding with a statement that said the tax was being made a scapegoat. The university was not starved for cash, the city suggested, with plans in the works to build a multimillion dollar stadium.
The coalition fighting the tax also jumped in, calling Temple’s decision evidence that Kenney needed to “face the facts that this tax is hurting Philadelphia families and businesses.”
The university had found itself in the middle of what remains — even nine months after the tax passed — a politically-charged battleground. The school seemed shell-shocked. Within 24 hours the university backed off, saying it would take another look at its figures.
“These are high stakes,” said Duane Stanford, executive editor at Beverage Digest, who has been following beverage tax debates nationwide. “So I think both sides are going to fight vigorously and try to use any ammunition they have to make their case.”
For Kenney, an assault on the tax is also one on the initiatives it will pay for, including an expansion of pre-kindergarten and a $500 million revamp of city recreation centers and libraries. The soda industry, meanwhile, knows any evidence that Philadelphia’s tax is failing will deter other cities from considering similar levies. Among the most powerful ammunition in that industry-wide fight: job losses, public pressure on City Council to repeal the tax, or a Commonwealth Court panel striking it down when a pending lawsuit is heard in April.
To make its case, the beverage industry is aggressively painting the 1.5 cent per ounce levy as having a devastating impact on the poor, small businesses and beverage industry jobs. The American Beverage Association, which spent more than $10.6 million fighting the tax, spent another nearly $500,000 in the six months after it passed, much of it on an “Ax the Bev Tax” public relations campaign.
— AxTheBevTax (@AxTheBevTax) March 22, 2017
Philadelphians for a Fair Future, the pro-tax coalition funded mostly by former New York City Mayor Michael Bloomberg, disbanded after the tax passed. That has left the Kenney’s team, without the backing of an outside organization, alone to defend the levy, hammering every negative claim that comes its way while still trying to promote the programs the tax is already funding.
Some say Kenney is walking a fine line and running the risk of vilifying the wrong targets, such as Temple. Others argue he has no choice: until the industry, with its endless financial resources, backs down, he can’t either.
“You have to fight back with ten times what they do and you have to get right in their face and say, ‘No, it’s all crap,’ if you think it’s crap,” said longtime campaign strategist Neil Oxman. “Otherwise what they say in the end is what people will believe.”
The examples of the two sides going tit-for-tat are numerous.
The same day Pepsi announced layoffs, the administration shot off a news release saying the city pre-K program had created 251 jobs, though they pay on average $14 an hour, far below most Pepsi jobs. Kenney questioned whether the layoffs were necessary given the company’s multimillion-dollar global profits. (Asked how many people have been laid off thus far, a Pepsi spokesman said the company was still in discussions with the union and the layoffs would take a few months).
When the administration released early revenue numbers showing $5.7 million in returns for January, exceeding its expectations, the anti-tax coalition argued the city’s projections seemed low and challenged whether the tax would hit its marks in coming months. (It did again in February, bringing in an anticipated $6.4 million. )
On the day ShopRite owner Jeff Brown opened a new grocery store in the city, Kenney spokeswoman Lauren Hitt shot off a tweet. “[Brown] still says tax is forcing him to lay off? That adds up,” she said. (That grocery store was in the works before the beverage tax passed.)
In other news, Brown opening new Shop Rite today in Philly right near city line. But still says tax is forcing him to lay off? That adds up.
— Lauren Hitt (@LaurenHitt) March 2, 2017
All the while, Kenney has been skeptical of any purported negative impact his tax is causing. Confronted with the story of one Coca-Cola salesman who said his paychecks had been slashed in half, the mayor showed no sympathy.
“I don’t know who this guy is or what he does or who pays him or whether he’s being accurate or not,” Kenney said last month, after being told about the man’s story. “All I know is there are almost 2,000 kids today who are getting a pre-K experience that will lift them out of poverty.”
On Thursday Kenney called his responses over the past year appropriate. “I am not going to apologize for being passionate for our kids,” he said. He said he was heckled by members of the Teamsters union at the 2016 St. Patrick’s Day parade. “If it’s me that’s the whipping post, that’s fine and we’ll move forward and get our kids what they need to succeed.”
Anthony Campisi, a spokesman for the anti-tax coalition, said his group has “tried from the beginning to have a respectful debate” and that the administration’s responses have been unnecessarily icy. (He also sent an unsolicited 11-page dossier of tweets and news articles he said proved that point.)
Hitt defended the city’s pushback, saying she has a responsibility to get “the fairest story out there and the most accurate story out there.” As for Campisi’s statement, she pointed out the industry’s tactic of sending honking semi trucks circling City Hall – twice – is not what she would describe as “part of a respectful policy debate.”
The campaign rhetoric has even seeped into events focused more on the programs the tax funds.
At a meeting for pre-K providers with Kenney last month, the tax debate monopolized discussion.
“In many ways we are ourselves alone in this fight,” Kenney told the group. “They are gouging their own customers, creating fear and misinformation and we fight back every day.”
Before the crowd dispersed, Kenney staffers asked providers who were willing to stick around to give on-camera testimonials about their programs. The city plans to send photographers into pre-K classrooms in coming weeks.
More ammunition for the next round.
“The game is over. Yet players are still on the field and they’re still swinging for the fences and throwing pitches,” said Mark Nevins, a political strategist. “But I guess in some ways this is sort of a typically Philadelphia way of litigating a debate. Even after a winner’s been declared, sometimes there’s still fighting to be done.”
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