Was Philadelphia's Soda Tax the Result of a Union-Versus-Union Political Fight?
Indicted union boss John "Johnny Doc" Dougherty ordered the soda tax passed to hurt the city's Teamsters union, federal prosecutors say.
Officially, Philadelphia's much loathed soda tax—the highest such tax in the country—was approved as a way to generate revenue for the city's new pre-K program.
Unofficially, like all vice taxes, it was intended to reduce Philadelphians' consumption of sugary beverages—though it has mostly just changed where people buy soda and hasn't improved public health at all.
But now there's a third possible explanation for the soda tax, and it's downright crazy: a political hit job executed by one of the city's most powerful union bosses against a rival union.
That's the theory starting to emerge in the wake of a federal indictment against John "Johnny Doc" Dougherty, the longtime business manager of the International Brotherhood of Electrical Workers Local 98 and one of—if not the—most powerful political operators in the city.
According to federal prosecutors, Dougherty pressed allies on the city council—including Councilman Bobby Henon, who is also charged as part of the 116-count indictment—to pass the soda tax as retribution against the city's Teamsters union, which had disagreed with IBEW Local 98 about which candidate to support during the city's 2015 mayoral election. Dougherty's preferred candidate, now-Mayor Jim Kenney, won that race.
In May 2015, according to the indictment, Dougherty was already planning to strike back at the Teamsters.
"Let me tell you what Bobby Henon's going to do," Dougherty told an unnamed IBEW Local 98 union official, according to the indictment. "They're going to start to put a tax on soda again, and that will cost the Teamsters 100 jobs in Philly."
Indeed, the Teamsters have opposed the soda tax since it was proposed in 2016—shortly after Kenney took office—and say the tax has cost jobs in Philadelphia.
Kenney tells Philly.com that he didn't know the soda tax was a revenge plot hatched by Local 98—though the paper wryly notes that the mayor "has known Dougherty since childhood, attended high school with him, and came up through the trenches in the city's political wars" with the IBEW union boss as his patron. Henon, who pushed the soda tax through the city council, is charged with having accepted more than $84,000 in cash and gifts from Local 98 in order to do the union's bidding on the city council.
Everyone involved is innocent until proven guilty, of course, but these new revelations about the possible origins of the Philly soda tax are likely to increase public opposition to the already-unpopular levy that adds 1.5 cents to every ounce of soda sold in the city.
By nearly every measure, the soda tax is a failure. The tax has been blamed for the closing of at least one grocery store, and has cost supermarkets about $80,000 a month per store in lost beverage sales. Another study found that soda sales outside city limits increased by 38 percent in the months after the tax passed. Philadelphia's poorest residents are most hurt by the tax, and are less likely to be able to dodge it by shopping in the suburbs. To top it all off, the tax produced about 15 percent less revenue than expected.
"The tax does not lead to a shift in consumption towards healthier products, it affects low income households more severely, and it is limited in its ability to raise revenue," concluded a recent study by three University of Minnesota researchers.
It's also a good warning about how well-intentioned but intrusive government policies can be co-opted by corrupt political forces. Even if you believe that soda taxes are good policy—because they nudge people to make healthier choices, or because pre-K needs funding and this is the best way to do it, or whatever—the idea that everyone in Philadelphia is getting taxed only because one politically powerful union wanted to kneecap another should give you pause. What happens when the next policy you want passed pisses off that union?
Union thuggery in Philadelphia politics is pretty common, but it's also costly. Before the soda tax, the best example was probably the construction of the Comcast Tower, a 57-story skyscraper built in the mid-2000s. When the local plumbers union objected to developer's plans to use environmentally friendly flush-less urinals in the building, the city required that redundant plumbing be installed in the building anyway—officially, that was to ensure the no-flush urinals could be replaced if they didn't work properly, but the real reason was just to make work for the union.
If federal prosecutors are right that Dougherty ordered the soda tax to be created as a political hit, there should be no remaining doubt that the tax ought to be repealed. In the meantime, Philadelphians are left to play their small part in another of the city's endless union-on-union civil wars, 1.5 cents per ounce at a time.