How Kenney and Council hammered out the soda-tax deal

Consensus was close, but fragile.

On the day Philadelphia City Council would vote on Mayor Kenney's proposed tax on sugary drinks, freshman Councilman Allan Domb found he had become a crucial swing vote. A numbers man who, as partner in a high-end restaurant chain had a personal stake in the outcome, Domb was on board - but at 1.25 cents per ounce.

Kenney wanted higher.

The mayor sent his financial team to Domb's office. After poring over the math, Domb locked in his vote - for 1.5 cents - and held to it in the hours to come, even as beverage lobbyists did their best to undo it.

"We were having individual conversations" during the final hours before the vote, Kenney said Friday. "Trying to convince and continue to bolster Council members who were on our side, those on the fence. Trying to explain why it was important."

It worked.

Assuming that, as expected, the 1.5-cent-per-ounce tax on sugary and diet beverages backed by Council on Wednesday receives final approval this week, it will be a momentous political and potentially career-making win for Kenney.

In Philadelphia, it would affect the prices of thousands of products from soda to sports drinks, including all sweetened beverages, whether sugar-based or diet, while paying for sweeping programs including an expansion of prekindergarten.

But its significance is farther-reaching. Kenney, where his predecessor twice failed, is poised to make Philadelphia the nation's first big city with a soda tax, something other municipalities might duplicate.

It is clear that the mayor's success came as much because of what he did - tie the tax to inspiring initiatives, secure big-name financial backing, work directly with Council members, as his staff did in Domb's office - as for what he did not.

He did not preach to Council. He did not dictate. He did not grow impatient.

Even when Council President Darrell L. Clarke called Kenney's 3-cent-per-ounce ask "ridiculous," Kenney kept an even keel, a trait he was not known for as an often short-tempered councilman.

"That was the point where I think observers of this like myself said, 'Well, let's just see how Jimmy reacts to this one,' " said Ken Smukler, one of the few Philadelphia political strategists not working on one side or the other in a debate that gripped the city for months. "What you saw after that was a very muted administration. They weren't lashing out."

Kenney's pitch was unusual, and for that reason and others, the scales seemed tipped slightly in his favor from the start.

He tied the tax not to the health benefits it would reap by reducing Philadelphians' sugar intake, but to the programs it would pay for - expansion of prekindergarten, creation of community schools, and improvements to parks, recreation centers, and libraries.

The tax, which won Council's initial stamp of approval on a voice vote Wednesday and will be up for a final vote this Thursday, would raise a projected $91 million annually. That is just $4 million shy of Kenney's original target, though the tax is half the rate Kenney wanted, because it will be levied on diet beverages as well.

His timing, too, was ideal. Kenney made the pitch in his honeymoon phase with Council and with four years before members would have to answer to disapproving voters.

Kenney's opening 3-cent bid never seemed to receive serious consideration from most on Council. But there was enough of an appetite to keep the negotiations going, as Council members suggested lower numbers. Adding diet beverages to the mix seemed to solidify a few who had been on the fence over concerns that a tax would disproportionately affect poor neighborhoods where soda consumption is high.

In interviews since the Wednesday night vote, many Council members said Kenney prevailed largely because the programs he tied the revenue to resonated with them as former Mayor Michael Nutter's health initiatives never did.

In the nitty-gritty of negotiations, of course, it got more complicated.

Domb, for one, said he only considered voting for the tax after Kenney staff pledged to act on two issues upon which Domb had campaigned - increasing delinquent tax collections and reforming the city's property assessment process. Domb, who is a partner in Starr Restaurants, said he was pulled up to 1.5 cents Wednesday when the Kenney staffers in his office said the extra revenue would bolster the city's dangerously low fund balance, the difference between what the city takes in and what it spends.

Councilwoman Cindy Bass said she decided to support the mayor when an alternative real-estate tax she proposed fell flat.

Councilwoman Jannie Blackwell, one of three members to oppose the tax at a rally hosted by the coalition fighting it, became a surprise "aye" vote after Kenney was seen ducking into her office twice Wednesday - a throwback for those who remembered how a previous mayor, Ed Rendell, met with Council members on their turf, not his.

Blackwell said she switched sides because the fight seemed over.

"What changed my mind was that we were there," Blackwell said. "And when the majority of people were there, you've got to settle it and move on."

Clarke ultimately voted in support as well. But City Hall sources say the timing of Council's vote - not until 8 p.m., six hours after the scheduled time - was due in large part to Clarke's attempt to delay it.

Those sources said he was not trying to kill the proposal. But the Council president, who has been staunchly against soda taxes before, is known not to commit himself until the last possible moment. Clarke also puts a premium on Council unity, especially on big votes.

Sources said Clarke got behind 1.5 cents only when he realized the votes were there to pass it, with or without him.

On Friday, Clarke's spokeswoman, Jane Roh, insisted it was he who brokered the 1.5-cent compromise. She said the delay was due in part to technical concerns about whether adding diet beverages to the existing bill was legal, or if a new bill would have had to be introduced the next day.

Roh said Kenney's team favored "risking a legal challenge" and voting on the existing bill Wednesday, out of concern they would lose support.

"Council President Clarke looks forward to a decisive, historic vote for Philadelphia's children, public spaces, and workforce next Thursday," Roh said.

Kenney also overcame a powerful lobbying effort that has killed numerous proposed soda taxes across the country. The American Beverage Association spent $1.5 million fighting the tax in just the first month after the measure was introduced, and that was before it took its message to television.

It helped that former New York Mayor Michael Bloomberg, who had supported the effort to enact a soda tax in Berkeley, Calif., the only U.S. city to do so, opened his wallet here. So did Houston billionaires John and Laura Arnold, who fund a nonprofit focused on antiobesity and education issues.

The pro-tax side has declined to say how much money it has spent. And totals spent thus far by both sides in the battle will not be known until they file updated financial disclosures, due July 30.

It is clear those fighting the tax are persistent and have deep pockets.

Billionaire bottler Harold Honickman told the Inquirer last week that the American Beverage Association, whose funders include him, offered to give the city $10 million for its pre-K expansion.

In exchange, the association wanted a "one-year hiatus" from talk of a soda tax.

That deal is still out there for the taking, though Honickman said Kenney rejected it last week.

"They can have it any time they want it," Honickman said outside Council chambers during the body's weekly Thursday meeting, which was swarming with lobbyists and advocates still fighting the tax. "It's a lot of money."

tnadolny@phillynews.com

215-854-2730@TriciaNadolny

Staff writers Claudia Vargas and Chris Brennan contributed to this article.