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Mayor Kenney says he will seek a three cents per ounce soda tax to fund a broad array of initiatives including his plan for access for pre-k education for all city children.
In all, he believes the tax - similar to lesser soda levies twice thwarted by council - could bring in $400 million over five years.
Beyond supporting universal Pre-K, the sugary drinks tax - which Kenney opposed when it was proposed during the Nutter administration - would help fund community schools, Council President Darrell Clarke's jobs plan as well as pay back a bond for rebuilding parks and recreation centers over five years. Additionally, $26 million would go into the city's starved pension system which has a $5.7 billion deficit.
Kenney is briefing Council members today on the ambitious plan. He will publicly announce the details in a budget address March 3.
The tax will exceed the two-cent-per-ounce levy Nutter twice pushed for, which never made it to a vote on Council.
"This will be successful this time," Kenney said in an interview Friday in his office, sipping from a Diet Pepsi - which would not be taxed.
"There's more evidence the funds will be used for things that people can clearly identify and Council members can clearly identify with. Before, there was no identifiable project or projects tied to it. It was first about obesity, which none of us thought was real, and then it was about filling a budget gap and it didn't work."
Council President Darrell Clarke declined to comment, Monday. Clarke's spokeswoman, Jane Roh said he is waiting until the plan is presented at the budget address.
The levy would be on any beverage manufactured with added sugar, including sports drinks and sweetened teas. Diet drinks or those where sugar is added at a customer's request, such as coffees or teas, would not be included.
The tax would come to 36 cents on a 12 oz can of soda but would be levied on distributors, not point of sale such as restaurants and markets. The soda lobbyists and the Teamsters union are expected to fight the proposal tooth and nail as they did last time.
Nationwide, soda taxes have failed in New York State and San Francisco. Only Berkeley California has successfully passed a sugary drinks tax. The city taxes one cent per ounce.
Kenney's policy director Jim Engler said it's the best and last option to raise funds for city projects.
"All the levers have been pulled," Engler said. "It's an untapped resource that is still out there and eligible to fund a lot of key initiatives and it's different from other resources we've tried for the past few years."
Kenney's new Health Commissioner, Dr. Thomas A. Farley attempted to ban soda drinks larger than 16-ounces in New York City.
Kenney dismissed a common argument that a soda tax targets the poor, who tend to buy soda at higher rates.
"That's fallacious because the money stays in the neighborhood," Kenney said. "So if it's a quarter, 30 cents more, that doesn't go to the manufacturer. That stays in the neighborhood by creating Pre-K, community schools and improving recreational infrastructure."
NAACP President Rodney Muhammed supports the initiative, largely because of his support for Pre-K. "We're saying, look, let's take the bite and let's set up Pre-K," Muhammed said. "Let's do something so the biggest city with the worst poverty doesn't suffer any more."
Here is a breakdown of what Kenney's soda tax proposal would fund:
- Universal Pre-K
The biggest slice of the tax - $256 million over five years - would go toward expanding Pre-k. Kenney is looking to add 10,000 quality pre-k seats through local and state funding by 2020.
The tax money would pay primarily for additional pre-k slots leaving the bulk of improvements to facilities and teacher training to the non-profit sector.
- Community schools
The tax would invest $39 million in 25 community schools over five years. The schools coordinate existing services such as medical and social services
- Repaying the "Rebuild" Bond
Kenney's other big initiative, announced last week, is a plan to use $600 million - $300 million raised by a bond sale - to improve parks, libraries and rec centers citywide.
The soda tax would put $56 million toward the bond debt service over five years, finance director Rob Dubow said.
- Clarke's jobs plan
Another $23 million would go toward Council President Clarke's green jobs plan over five years. Clarke has proposed bringing in 10,000 jobs by investing $1 billion in public and private green energy projects. Kenney says the $23 million would be used to pay back a bond issue to energy retrofit and improve infrastructure for city facilities.
- The pension
The city's starved pension system would get $26 million over five years if the tax goes through. Dubow recognized $26 million is a drop in the bucket for a system underfunded by $5.6 billion but said every bit helps.
"It's a message that whenever we can, we're going to do something for the pension. It's important for the pensioners, it's important for the markets for them to see we understand what a big problem this is," Dubow said.
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Staff writers Tricia L. Nadolny and Claudia Vargas contributed to this article.