Philadelphia may legally impose a tax on sweetened beverages to fund services to low-income residents.
The Issue: The City of Philadelphia enacted a tax on sweetened beverages to fund the provision of desperately needed services – including early childhood education – to low-income residents of the City. The soda industry sued, challenging the new law on several grounds, including that it in effect imposed a second sales tax on certain products, thereby violating a Pennsylvania statute prohibiting double taxation.
Why It Matters:In addition to the importance of cities’ ability to raise revenues to provide services to low-income children and other constituents who are often left out, the case sets a significant precedent for cities’ ability to protect public health when federal and state government fail to do so. Because the increasing prevalence of obesity and diabetes constitutes a major public health crisis throughout the United States, and consumption of sweetened beverages is a significant contributor to both conditions, various cities are experimenting with or considering beverage taxes in order to reduce consumption. As Forbes noted, “You can bet that the ruling … will have consequences beyond the City of Brotherly Love.” Finally, this litigation is part of a wider trend of litigation by deep-pocketed business groups seeking to undermine legislation that serves the public interest but threatens their profits. The support of public interest litigators such as Public Good can be crucial as industry litigators often have far greater resources available to make their case than do local governments.
Public Good’s Contribution: When the case reached the Pennsylvania Supreme Court, Public Good filed a brief explaining to the Court the importance of early childhood education to the long-term health and well-being of the City’s youngest and most vulnerable residents. Public Good’s brief was filed on behalf of its co-counsel on the case, ChangeLab Solutions, as well as an array of nonprofit organizations dedicated to the development and provision of high-quality preschool for all children.
Amici represented by Public Good: Public Good’s brief in the Pennsylvania Supreme Court was filed on behalf of ChangeLab Solutions, the Children’s Defense Fund, the Highscope Educational Research Foundation, the Pennsylvania Association for the Education of Young Children, and the Pennsylvania Child Care Association.
Outcome: The Pennsylvania Supreme Court, like the two lower courts that had previously considered the case, upheld the tax as a legal exercise of Philadelphia’s taxing authority.
164 A.3d 576 (Pa. Commw. Ct. 2017), and affirmed, 188 A.3d 421 (Pa. 2018).