PHILADELPHIA — Philadelphia became the first major American city with a soda tax on Thursday despite a multimillion-dollar campaign by the beverage industry to block it.
The City Council gave final approval to a 1.5 cent-per-ounce tax on sugary and diet beverages. The tax is set to take effect Jan. 1.
Only Berkeley, Calif., has a similar law. Soda tax proposals have failed in more than 30 cities and states, including twice in Philadelphia, in recent years. Such plans are typically criticized as disproportionately affecting the poor, who are more likely to consume sugary drinks.
Democratic Mayor Jim Kenney sold the council on the idea with a plan to spend most of the estimated $90 million in new tax revenue next year to pay for prekindergarten, community schools and recreation centers.
"Thanks to the tireless advocacy of educators, parents, rec center volunteers and so many others, Philadelphia made a historic investment in our neighborhoods and in our education system today," the mayor said.
The tax, which passed 13-4, was a hard-fought win for the city. The soda industry spent millions of dollars in advertising against the proposal, arguing the tax would be costly to consumers. The plan also attracted national attention and dollars, with former New York Mayor Michael Bloomberg and Texas billionaires John and Laura Arnold, advocates for less consumption of sugary drinks, funding ads in support.
The American Beverage Association called the tax "discriminatory and highly unpopular."
"The tax passed today is a regressive tax that unfairly singles out beverages, including low- and no-calorie choices," it said a statement. Though the tax won't start being collected until 2017, it will be included in the fiscal budget that starts July 1.