PHILADELPHIA – In case you missed it, the Laura and John Arnold Foundation is donating $500,000 toward the cost of the City’s legal defense of the Philadelphia Beverage Tax.
Texas nonprofit backs city’s soda tax fight with $500K grant
Philadelphia Business Journal // Allison Burdo
While soda drinkers across the city are feeling lighter in their wallets this week, the city of Philadelphia has more wiggle room in its $1.6 million financial allotment for its legal defense of the sweetened beverage tax.
The Laura and John Arnold Foundation exclusively told the Philadelphia Business Journal Wednesday that it gifted the city with $500,000 in early November to be put towards the legal defense of what has become known as the soda tax.
“We don’t think the citizens of Philadelphia should be forced to abandon an intervention… that could benefit their city because of litigation,” said Kelli Rhee, executive vice president and chief strategy officer of the Houston-based Arnold Foundation.
The most recent figures from the Mayor’s Office show the lawsuit has cost $828,000 through the end of November. The expense represents more than half the $1.6 million cap on the costs of litigation, according to current contracts. With the newly announced $500,000, the Arnold Foundation has bought the city some extra time in its legal battle against the deep-pocketed beverage industry.
While the Arnold Foundation’s grant brings a slight sigh of relief, Kenney can’t breathe easy just yet – since litigation over the soda tax does not appear to be ending any time soon.
A week after a judge dismissed the the initial complaint “in its entirety,” the beverage industry filed an appeal.
“The Arnold Foundation’s support will go a long way towards easing the City’s financial cost of defending against this lawsuit by the American Beverage Association,” City Solicitor Sozi Pedro Tulante said in a statement. “Philadelphia should not be penalized for doing what we know is right for our children or for doing what is legally sound – a view upheld by the Common Pleas Court last month.”
The city did not solicit the grant, the mayor’s office said. Instead, the Arnolds – who have slowly became know for supporting anti-sugar policies, contacted local officials to express their willingness to help.
The couple behind the Texas-based nonprofit, Laura and John Arnold, have contributed to campaigns in favor of the soda tax in Philadelphia before, as well as other municipalities.
Through a separate 501(c)(4) they fund, the Action Now Initiative, the Arnolds contributed $475,000 towards the passage of the soda tax in the city, with most of the funds going to the Philadelphians for a Fair Future coalition. Aside from the Bloomberg Foundation’s $1.6 million in funding, Action Now provided one of the largest donations in support of the tax.
Action Now, a nonprofit social welfare organization, also gave another $2.2 million towards soda tax efforts elsewhere, including in San Francisco, Oakland, Berkeley and Richmond, California; and Telluride and Boulder, Colorado.
Big soda has yet to file lawsuits in the other municipalities around the country – including Boulder, Colorado; and San Francisco and Oakland. Kenney previously pointed out the industry’s focus on Philadelphia, saying he hoped the fight would be dropped here.
A spokesman for the Mayor’s Office reiterated his plea to the beverage industry.
“By choosing to appeal even after Judge Glazer soundly dismissed all parts of their case, the beverage industry is clearly trying to signal to other cities that they will be caught up in long, costly legal battle if they chose to pursue a soda tax – regardless of how strong their legal footing is,” Mike Dunn, a city spokesman, said in a statement. “The Arnold Foundation’s support serves as an important, just counterbalance to that intimidation.”
Action Now confirmed its $475,000 gift after Mayor Jim Kenney signed the tax into law last summer. This time around, the Arnold Foundation said it was ready to come forward with the $500,000 grant ahead of its next quarterly disclosure update because of repeated press inquiries into the administration’s spending on the litigation.
John Arnold, a former Enron trader who left the company before it was wrought with scandal, began the Arnold Foundation in 2008 with his wife Laura.
The Arnold Foundation is also responsible for another $2.4 million in funding to support Berkeley, the American Heart Association and Healthy Food America in their sugar-reduction related policy work.