Only a quarter of soda tax revenue has actually been spent: Controller

Mayor Jim Kenney’s soda tax (a 1.5 cent-per-ounce tax on sweetened drinks) was advertised in 2016 as going to fund a panoply of badly needed infrastructure and educational investments.

But since it took effect at the start of 2017, only about 25 percent of the $84 million so far collected in soda tax revenue actually went to any projects, City Controller Rebecca Rhynhart found in a report released this week. The rest went into the city’s general fund.

“The data shows that the majority of revenue generated by the beverage tax is not being spent on pre-K, community schools and debt service for Rebuilding Community Infrastructure (Rebuild), as originally intended,” Rhynhart’s office said. “About 74 percent of the nearly $85 million generated by the beverage tax since its inception has gone to the City’s General Fund.”

Mayor Kenney’s office says revenues are being held in the General Fund while a soda industry-backed lawsuit to overturn the tax remains pending in the courts.

“It is extremely disappointing that the controller chose to issue such misleading and inaccurate information,” a Kenney spokesman said via email. “All of the money that is in reserve is going to be spent on the programs.”

Rhynhart’s office said funds intended for those programs should be held “in a segregated reserve account.” The report’s written purpose was “to increase transparency and show the public how the city spends taxpayer money.”

But Kenny’s office said the controller’s report is “nothing new,” pointing to previous reports that, after the American Beverage Association sued Philly, City Hall started stockpiling some soda tax revenues to continue funding services like pre-K in the event the courts blocked the tax. They also said she didn’t account for $6.6 million in other costs, including Parks & Rec funding for Rebuild.

“One of the reasons the controller specifically wanted to release this data set was it was an issue that came to her repeatedly on the campaign trail,” said Jolene Nieves Byzon. “She heard neighborhood after neighborhood, community after community, ask, ‘How do you feel about the soda tax? Where is the tax going? Is it going where we’re told its going?'”

According to the Controller’s Office, out of $39.5 million collected in 2017, $8.4 million went to pre-K, and $1.2 million to community schools. Out of $45.2 million collected in 2018 as of March 2, $11.3 million went to pre-K and less than $981,000 went to community schools, they found.

Currently, there are about 2,000 free pre-K seats, out of a projected 5,500 (down from 6,500), and nine Community Schools, out of a projected 20 (down from 25), the Controller’s Office reported.