For the first time since the introduction of Philadelphia’s 1.5 cents-per-ounce tax on soda and other sweetened drinks 3 months ago, city officials are already lowering their revenue projection as the tax turned out to represent an unstainable revenue stream due to consumers shopping elsewhere.
According to city Controller Butkovitz, the chief accounting officer of the city: “While the city lowered its initial budget projections for the first two months and then reported better-than-expected revenues, the fact is the city’s initial budget projections indicated that the Beverage Tax needed to generate $7.7 million every month”. Instead, he has reported that the monthly average is $6.4 million. He warned that this could potentially create important difficulties for the city to fund new programs and initiatives. The press release from the city controller is available here.
What is more, it was reported that the tax had forced layoffs as a result of tanking sales of beverages in the city due to this onerous tax. More info on the devastating consequences of the tax can be found here and here.