The soda tax that Philadelphia City Council approved in June will go into effect on Jan. 1, which could hike up the cost of meal plans for the 2017-18 academic year.
The tax will increase the price of sugary drinks, like sodas and sports drinks, by 1.5 cents per ounce. According to the tax’s official website, the money from the tax will fund early childhood education in the public sector, with an emphasis on Pre-K education and recreational programs, as well as libraries and other community schools. PhillyVoice reported in June that the tax is expected to generate $91 million in revenue each year.
Ken Kaiser, the university’s CFO and Treasurer, said the cost of meal plans will not increase for Spring 2017.
“The university would absorb any added cost for the spring in its budget this year,” Kaiser said. “In no way would the cost for the spring then be added into the rates for future years. The cost would be covered by savings in other areas of the housing operation or through reserves housing has for one-time, unforeseen needs.”
Still, for the upcoming academic year, students may see an adjustment to their meal plans. Michael Scales, the associate vice president for business services, wrote in an email that the university is working with Aramark, soon to be the university’s food service provider, to figure out how meal plans would change after the tax.
“[We] will look at several variables such as price indexes and consumption to determine the rate for 2017-18 meal plans should the tax be implemented,” he wrote.
The tax also comes on the heels of Temple’s July agreement to replace Pepsi and name Coca-Cola as the university’s beverage distributor. The company now owns and operates all of Temple’s vending machines and soda fountains in residence and dining halls.
Coca-Cola, along with most other big names in the beverage industry, opposes the tax, and is a plaintiff in a lawsuit filed against the city contesting the legality of the tax. The Philadelphia Business Journal reported that the Pennsylvania Supreme Court denied requests to hear the case immediately, meaning the city’s Common Pleas Court must make a ruling before the case can be heard at a higher level.
“The Coca-Cola Company opposes the Philadelphia beverage tax proposal because it unfairly targets one product, disproportionately impacts low-income communities and hurts small businesses,” said Lauren Craig, a Coca-Cola spokeswoman. “Singling out one product category is an unreliable way to fund important local initiatives like Pre-K education.”
She added that the company will work with local businesses, restaurants, grocers and citizens as well as other large beverage companies to fight the tax.
Will Bacha can be reached at email@example.com.