Feb 15, 2017
The State Supreme Court of Pennsylvania has denied an unusual legal motion called a King’s Bench petition from the City of Philadelphia, which has been sued over its proposed beverage tax. A King’s Bench petition is a direct appeal to the state Supreme Court, and Philadelphia insists that it needs an immediate ruling in order to avoid what it claims is significant harm that would result if the lawsuit proceeded through normal channels.
Last December, Court of Common Pleas Judge Gary Glazer dismissed a civil complaint filed by a group of food and beverage retailers and distributors insisting that the proposed surcharge on soft drinks is unlawful. That ruling was immediately challenged in court. This complicated matters for the city, which – in the familiar fashion of political bodies – had already spent the money it had planned to collect through the soda tax.
In its filing, the city recalled that it had already implemented an expanded pre-kindergarten program but that it depends on the “anticipated revenues” to be collected through the tax. It is also preparing a $500 million infrastructure program, but its “ability to afford bond financing for that initiative is premised on a final decision concerning the legal challenge” to the soda tax.
The ongoing legal challenge actually places the city’s fiscal stability in question, since “The money from the tax goes into the general fund, which is allocated however the city has chosen to allocate it,” explained the municipal government’s filing. The tax is expected to bring in $92 million annually.