Philadelphia’s soda tax money goes to three city programs: PHLpreK, which pays for free pre-kindergarten seats; Community Schools, which brings health, food, and family services into 20 public schools; and Rebuild, which renovates neighborhood parks, libraries, and recreation centers. All collections flow into the city’s General Fund first, then get allocated to those three initiatives. Since taking effect on January 1, 2017, the tax has generated more than $518 million, averaging roughly $73.8 million a year.1Office of the City Controller. March 2024 – Municipal Money Matters
PHLpreK: Free Pre-Kindergarten
The largest share supports PHLpreK, which offers free pre-K seats to Philadelphia children regardless of family income. Any child who will be three or four by September 1 of the school year qualifies, as long as the family lives in the city. Enrollment requires only two documents: proof of the child’s age and proof of Philadelphia residency, such as a state ID, lease, or voter registration card.2City of Philadelphia. Enroll in PHLpreK
The city contracts with local childcare providers and pays them a monthly rate per seat. Participating centers generally have to meet quality benchmarks tied to Pennsylvania’s Keystone STARS rating system, which looks at staff qualifications, learning environment, and family engagement. The steady payments let providers hire more teachers, upgrade classrooms, and raise wages in a sector that has long run on tight margins and high turnover.
Community Schools
Twenty public schools are currently designated as Community Schools, serving close to 13,000 students.3City of Philadelphia. Community Schools Beverage tax dollars pay for medical screenings, nutritional support, expanded after-school programming, and adult education classes inside those buildings.
Every Community School has a full-time coordinator who assesses what the surrounding neighborhood needs and brings in city agencies and nonprofits to deliver it. One school might set up a food pantry; another might focus on mental health counseling or immigration legal aid. Putting those services inside a school building, where families already come and go, removes a logistical barrier that keeps many people from seeking help elsewhere.
Rebuild: Parks, Libraries, and Rec Centers
Rebuild, formally called Rebuilding Community Infrastructure, has directed more than $500 million into renovations at 72 neighborhood parks, recreation centers, and libraries.4City of Philadelphia. Rebuild Many of these sites had gone decades without major work and carried deteriorating roofs, outdated HVAC, and inaccessible entrances.
Instead of paying contractors year by year, the city issued municipal bonds to raise construction money upfront. Beverage tax revenue covers the debt service on those bonds, so the annual collections largely go toward principal and interest rather than directly to job sites. That structure let the city start dozens of projects at once. Typical work includes structural repairs, HVAC replacement, playground overhauls, athletic field upgrades, and accessibility features like ramps and elevators.
How Much the Tax Brings In
Collections have slipped modestly from early-year highs. The city brought in $68.2 million in fiscal year 2025 and projects about $66.8 million for fiscal year 2026.5Pennsylvania Intergovernmental Cooperation Authority. Revenue Fact Sheet: Philadelphia Beverage Tax The lifetime average sits around $73.8 million per year, with the lowest totals in fiscal years 2020 and 2021 when pandemic disruptions cut beverage sales across the city.1Office of the City Controller. March 2024 – Municipal Money Matters
Every dollar runs through the General Fund before being disbursed to the three programs.5Pennsylvania Intergovernmental Cooperation Authority. Revenue Fact Sheet: Philadelphia Beverage Tax The PICA fact sheet notes the money was routed that way with the understanding that this single revenue stream would not sustain all three programs indefinitely. The City Controller publishes periodic reports showing collections and allocations. If the gradual decline continues, the city will eventually need to find supplemental funding for programs residents have come to rely on.
Who Actually Pays the Tax
The tax is imposed on distributors at 1.5 cents per ounce of sweetened beverage sold to Philadelphia retailers, not directly on shoppers at checkout, though distributors generally pass the cost through to retail prices.6City of Philadelphia. Philadelphia Beverage Tax (PBT) It covers sodas, sports drinks, sweetened teas and coffees, flavored waters, non-100% fruit drinks, and energy drinks, including diet and zero-calorie versions. Alcoholic beverages, 100% fruit juices with no added sweeteners, and drinks sold for consumption outside the city are not covered. Nonprofit status does not create an exemption: hospitals, schools, and charities that sell sweetened drinks are treated like any other retailer.