Here’s how high beer prices at Philly’s stadiums could get with new tax
City Council is just about out of options for the school-funding crisis this year. There have been a horde of ideas brought up by local politicians and activists, including expanding Medicaid, privatizing the liquor system, taxing mega-nonprofits, and a mess of other options. Next up: A proposal to increase the liquor tax from 10 percent to 15 percent and add a $2-per-pack cigarette tax.
Cigarettes are an easy target for politicians, who use them as a means for quick revenue when it’s desperately needed. City Council passed the cigarette bill 16-0. The liquor tax isn’t as easy, especially since bar owners—many of whom unsuccessfully fought against a smoking ban last decade—have been lobbying hard against it and the potential $22 million it’d bring in. Furthermore, both bills need to be approved by the state legislature in addition to City Council, because of a Pennsylvania law that says that unless a taxing ability is specifically granted to a municipality, then it has to be approved first by the state. (”The state has held onto that right to approve or veto a local municipality or local school district from imposing a new tax without their approval,” says Zach Stalberg, CEO of the good-government group Committee of Seventy.)
So political pressures mean a liquor-by-the-drink increase will be difficult to pass—and thus far, City Council hasn’t planned a vote—but let’s look at the hypothetical scenario:
If Mayor Nutter gets his way in Council and in Harrisburg, some potential spots where your beer tab would be likely to increase (even more so) are the South Philly stadiums, where the Phillies, Eagles, Flyers and 76ers spend a lot of time letting us down. The vending at the stadiums is run by Aramark, which did not provide a comment for this article, noting they have a policy of not commenting on legislation that’s still in the works. The company’s spokesperson also would not comment on whether the prices of beer would go up if the tax went from 10 percent to 15 percent, or on how their prices are determined.
The price of beer at Citizen’s Bank Park has already gone up 50 cents every other year, and now stands at $7.75 for a 16-oz. bottle of domestic beer. (The specialty beers are more expensive.) The current 10 percent liquor tax rate means you’re paying about 70 cents in Philly liquor taxes for each beer you buy. And you’re also paying the 8 percent Pennsylvania sales tax on that beer. So the base retail price of a stadium beer before the liquor tax and sales tax is $6.57. That means if the liquor tax were to go up to 15 percent, and if the retail price were raised to cover that extra cost, a Miller Lite or Bud Light would subsequently cost $8.08, give or take some rounding off to a nice, clean digit.
That could mean a world of pain for beer vendors. Vendors don’t earn a base salary—they make all their cash from commissions and tips. When they arrive at the stadium to work, they pay for a case out of their own pocket, then resell that case at a markup, collecting their cash and tips; once they’re out, they buy a new case. Much of their income, therefore, is based on factors outside their control—like whether people are willing to pay even $7.75 for a Bud Light in the first place, much less $8-and-change.
(Of course, in our hypothetical scenario, if the tax were to go through, Aramark could instead choose to eat the additional cost for the good of the consumer, vendor and schoolchildren rather than passing it on to the consumer.)