The Philly fight

real fruit or vegetables.

But affected beverages account for more than 4000 grocery items, Grace says.

‘‘By adding the diet in, the effect of the tax became overwhelming.’’

Kenney says the tax was deliberately levied on distribution, not point-of-sale, with the expectation that the multibilliondollar beverage companies absorb some of the losses themselves.

‘‘Fact is, it is the industry that is not showing any sympathy toward their own retailers.

‘‘The soda companies, the bottlers and the beverage people ... they don’t have a need to pass this tax on.

‘‘They can pass a portion of it on, or they can eat it.’’

But most of it is being passed on, according to a study published in January in the American Medical Association Journal, Jama. Led by New York economists, the study looked at beverage prices before and after the tax took effect, and found 93 per cent of it was being passed on to consumers. Unlike Berkeley, California, this is a soda-loving city.

It will take Berkeley’s soda tax at least five years to bring in the revenue Philadelphia’s generates every month.

The industry has challenged the Philadelphia tax twice already, losing in both the Common Pleas court and the Commonwealth Court in Pittsburgh. The Supreme Court has agreed to hear the Philadelphia case, which hinges on the legality of the tax.

Pennsylvania state has a lot of taxes – inheritance tax, realty transfer tax, new tyre tax, sales tax, even a malt drinks tax. But it’s illegal to tax the same thing twice.

The beverage industry says this is what’s happening in Philadelphia because consumers already pay a sales tax.

Lawmakers at Philadelphia City Hall dispute that, because it’s a tax on distributors, not dealers or consumers.

Amid the uncertainty, officials have put the revenue in reserves, meaning the number of pre-K slots won’t increase from 2000 until they know they have the money to spend.

In turn, this is fuelling industry allegations the revenue isn’t being spent where it was promised.

Predictions for future revenue have also been peeled back, with city hall announcing this month that the tax is expected to fund 5500 pre-K slots over the next five years, not 6500 as originally predicted.

‘‘This bears out what we’ve said all along,’’ American Beverage Association spokeswoman Lauren Kane says.

‘‘Beverage taxes are an unsustainable source of revenue as people flee the city to purchase their beverages tax-free.’’

If they lose in the Supreme Court, ‘‘we’re going to take it to the streets,’’ Grace says. ‘‘The citizens of Philadelphia are sick of this.’’

Grace doesn’t drink soda because he’s a type 2 diabetic, but he is ‘‘fiercely against’’ beverage or soda taxes wherever they pop up.

And pop up they have. Since 2009 there have been 40 attempts to introduce sugar taxes across US cities.

‘‘It’s a cancer growing across the States right now,’’ Grace says.