Alex Baloga, vice president of external relations, answered questions about the Philadelphia Grocery Tax on Hudson Valley Focus Live on WKIP Radio in New York. Host Tom Sipos asked Baloga about the impact the tax will have on Philadelphia retailers.
Pennsylvania Food Merchants Association President and CEO David McCorkle issued the following statement in response to Mayor Kenney’s outrageous attacks on Philadelphia grocery stores who have been forced to pass the mayor’s regressive tax onto consumers:
“The mayor’s regressive tax is gouging families and small businesses across Philadelphia. Working families and seniors living on fixed incomes aren’t just being “cranky” — they are rightfully angry because the mayor’s new 1.5 cents per ounce levy have dramatically increased prices on thousands of common beverages across Philadelphia. This tax is having a damaging impact on families as businesses are forced to pass the increased cost onto consumers — which is precisely what we predicted and what the city projected in its budget presentation to City Council. And the mayor’s flippant comment that families should switch their shopping to the suburbs has the potential to further devastate thousands of businesses across Philadelphia — from corner stores to supermarkets that provide family-sustaining jobs to thousands Philadelphians. Rather than encouraging the decimation of an entire Philadelphia industry, the mayor should take a close look at the negative impact of his tax.”
David McCorkle, PFMA president & CEO, spoke about the Philadelphia Beverage Tax with Rich Zeoli of WPHT radio on Wednesday, January 11. In the interview McCorkle said our members have worked hard and have spent thousands of dollars to comply with the new tax. Listen to the interview below.
Meagan Thorpe recently joined the Pennsylvania Food Merchants Association (PFMA) as association services manager.
Thorpe will research legislative and regulatory issues, serve as a liaison to communicate emergency planning issues, manage the association’s committees and provide government relations coverage in the monthly newsletter and weekly e-newsletter communications. In addition, she will assist with the planning and educational programming for the PFMA Annual Conference, Fall Legislative Conference and webinars.
Thorpe joins PFMA following five years with the Pennsylvania General Assembly. Most recently, she worked as a district director for former Senator Rob Teplitz and as a constituent outreach specialist for former state Representative Glen Grell. Prior to that, she worked on event and fundraising planning for the Pennsylvania Senate Republican Campaign Committee and the Pennsylvania Republican Party.
“We are pleased to welcome Meagan to the PFMA team,” said Alex Baloga, vice president of external relations. “Her experience and contacts with the Pennsylvania General Assembly will be essential to assisting PFMA members with their legislative and regulatory questions, and her event planning experience will be valuable as we plan our upcoming committee meetings and conferences.”
Thorpe earned her bachelor’s degree in Public Administration from Shippensburg University. She serves on the board of directors and communications committee for the Tri-County Community Action.
The Food and Drug Administration (FDA) published revised guidelines this month for civil penalties for tobacco retailers. The updates reflect the final deeming rule from the Federal Civil Penalties Inflation Adjustment Act Improvement of 2015 (Public Law 114-74).
As of August 8, 2016, the following rules apply to all covered tobacco products:
• Check photo ID of everyone under age 27 who attempts to purchase any tobacco product. • Only sell tobacco products to customers age 18 or older. • Do NOT sell tobacco products in a vending machine or self-service display unless in an adult-only facility. • Do NOT give away free samples of newly-regulated tobacco products, including any of their components or parts.
A retailer, with an approved training program who violates the regulations issued for the first time, is issued a warning letter. The maximum civil money penalty amounts for such retailers range from $250 (for a second violation in a 12-month period) to $10,000 (for a sixth or each subsequent violation at the same retail location within a 48-month period).
Penalties for violating other Food Drug and Cosmetic Act (FD&C) requirements relating to tobacco products may not exceed $15,000 for each violation or $1 million for all violations adjudicated in a single proceeding. Violations of certain provisions may be subject to enhanced penalties.
The Tobacco Control Act allows the FDA to impose a no tobacco sale order against a person found to have committed repeated violations, which is defined as at least five violations over a 36-month period. The duration of the no tobacco sale order will undergo the same considerations as the civil money penalties, and also determine whether employers have taken certain steps to promote compliance with the FD&C Act.
PFMA recommends all retailers have their associates ask if the purchaser is 18. Have a policy in place to card all tobacco sales and use age verification equipment. Also, be sure to document your training program.
Starting January 1, motorists will pay more for gasoline as the third phase of the gradual gas tax increases goes into effect. The tax is part of a 2013 law that’s earmarked to raise money to improve bridges, highways and other transportation infrastructure.
The tax will increase by 8 cents per gallon, bringing the total tax to nearly 76 cents per gallon in state and federal taxes. Pennsylvania has the nation’s highest gas tax. Governor Tom Corbett implemented the tax in 2013 along with other fees to motorists.
The Philadelphia Department of Health (DOH) approved limits on tobacco sales within the city on December 9. Thanks to feedback from PFMA and its members, the DOH did modify its restrictions limiting the number of retail tobacco permits in an area based on population. U.S. census figures for “commuter and adjusted daytime” population will be used rather than residential population. Starting February 15, the city will limit tobacco permits to one seller per 1,000 people. The change will allow more retailers in center city to sell tobacco products as workers commute into the area, while fewer retailers will be able sell in the residential areas where more people live.
The city also prohibited new permits within 500 feet of a school starting January 1. Businesses currently selling tobacco in those areas will be grandfathered to continue their sales, but will not be able to transfer their permits to a new retailer. Tobacco specialty retailers, such as cigar shops, received an exception where they can apply within the first 180 days of 2017 for a one-time transfer of their permit to sell their business. That exception applies to no more than six businesses.
Permit fees will increase from $50 to $300, starting January 1, to fund tobacco sales enforcement. Retailers receiving more than three violations in two years for underage tobacco sales will lose their permits for a year. According to city officials, compliance checks conducted last year found 23 percent of tobacco retailers sold to underage buyers. They believe these new restrictions will help prevent children from being the “next generation of smokers.”
Under a new ordinance passed by Philadelphia City Council this month, job applicants will not have to reveal their salary history.
The amendment to Title IX of the Philadelphia code prohibits prospective employers from inquiring about an applicant’s salary history throughout the hiring process. Councilman Bill Greenlee sponsored the ordinance to narrow the wage gap for women and minorities.
U.S. Census data in 2015 found that women make an average of 79 cents to every dollar earned by men. Minority women fare worse with African-American women making 68 cents, Latina women make 56 cents and Asian women are paid 81 cents for every dollar earned by white men. Councilman Greenlee said the new ordinance does not remove negotiation from the hiring process. He notes that employers can compare the job to similar positions to determine salary and review the applicant’s skills and experience.
Philadelphia’s Human Relations Commission would impose a penalty on employers, who violate the ordinance, within 300 calendar days of the alleged infraction. Penalties could include the commission ordering the company to cease and desist the practice; provide injunctive or equitable relief; order payment of compensatory damages and reasonable attorney fees, and order punitive damages payment of up to $2,000 per violation. Mayor Jim Kenney has publicly announced his support of the ordinance and has said that he plans to sign it. Once signed, the ordinance will take effect after 120 days.
PFMA and its members are opposed to Philadelphia Councilwoman Cindy Bass’s bill (Bill No. 16070) limiting the use of restrictive covenants for grocery stores with more than 15,000 square feet of space, located in a food dessert. The bill targets stores that put covenants in place to prevent another purchaser from using the property as a supermarket. It would refuse a commercial license for any grocery store that had a restrictive covenant in place. PFMA President and CEO David McCorkle sent council a letter expressing members’ concern that it would stifle small business development and fears that it could create food desserts. He testified before the city’s Committee on Rules on November 30 in Philadelphia.
McCorkle noted that as it is currently written, the bill could be construed to prohibit restrictive covenants that apply when a food store is still operating in the vicinity, not just when the space previously occupied by a store is vacant. Food store lessees often restrict landlords from leasing property to a competitor within a certain distance from their site or within the same shopping center. This protects the supermarket and helps it survive, especially in its early years. McCorkle says a covenant prohibition will jeopardize the store’s future in that neighborhood and disenfranchise store owners from making the initial investment into developed properties out of concern that a competitor with deeper pockets will move in and drive out any surrounding businesses.
An unintentional consequence of the bill is that larger format stores could drive out smaller creating food desserts in some areas of the city, which this bill is attempting to address. PFMA’s Philadelphia members have committed to addressing the food dessert problem and through city government and private foundations have made great strides in reducing the number of food desserts in the city. PFMA continues to meet with council members and the Mayor’s administration to express our opposition to the bill. We encourage members to contact council members and the Mayor’s office to oppose the bill.
The 2015-2016 Pennsylvania Legislative session was both very challenging and very productive for PFMA and its members. The session included a number of firsts, which began even before its official start with the election of political newcomer, Tom Wolf, as Governor in November of 2014 and his swearing in January 2015. This was the first time since Pennsylvania allowed governors to serve two consecutive terms that the incumbent governor lost re-election. At the same time this was occurring, two new leaders who emerged out of the Pennsylvania House and Senate. Senator Jake Corman and Representative Dave Reed were elected as Senate and House Majority Leaders respectively. This change meant that a newly elected Governor would be working with two new Majority Leaders in the legislature. PFMA and its members would need to work closely with these officials and their teams to help move its priorities forward. Twenty-fifteen legislative action centered around three major policy issues; passage of a state budget, liquor privatization and pension reform. PFMA was a strong advocate for its membership on all three issues and was successful in moving the issues forward in 2015. Specifically, PFMA was successful in preventing passage of new taxes on cigarettes and other tobacco products, the elimination of the vendor’s sales tax allowance and increases in the personal income tax, sales tax and sales tax expansion. However, even with the successful defense of these harmful taxes, PFMA and our members knew that difficult times would lie ahead with the state facing a more than $2 billion budget deficit carrying over into 2016.
On the liquor privatization front, PFMA helped champion legislation that would allow its members to sell beer, wine and spirits in their stores in any quantity. The association also promoted passage of pension reform to help curb the growth and increased payments and risk to the Commonwealth and taxpayers. All three issues saw action, but ultimately failed to pass. Although HB 466 (which would have privatized wine and spirits sales in Pennsylvania) was passed by the House and Senate, it was eventually vetoed by the Governor along with SB 1, which would have reformed the pension system in Pennsylvania to move all new hires from a defined benefit plan to a defined contribution plan. PFMA supported both bills and was disappointed they did not receive the Governor’s signature and become law.
PFMA successfully advanced and helped to secure passage of other priority legislation pieces in 2015. Those included: HB 182 (Grove), which allows pharmacists and pharmacy interns to administer the influenza immunization to children ages nine and up with parental consent, and HB 75 (Kauffman), which amends the Pharmacy Act adding a new section requiring pharmacies outside of Pennsylvania to register with the State Board of Pharmacy if they fill prescription orders for residents of the Commonwealth. The year would end without the enactment of a full state budget, which is mandated to be completed before the start of a new fiscal year on July 1, 2015. The Governor vetoed part of the legislature’s budget bills near the end of 2015. The 2016 calendar year started with the state budget battle still looming and taking up most of the air in the State Capitol.
After more than a year of debate and discussion over the 2015-2016 fiscal year budget, a final budget bill was passed by the House and Senate and it became law without the Governor’s signature in April 2016. This brought the 2015-2016 budget to a close. However, during this debate and final passage of the budget, the 2016/17 budget proposal was introduced by the Governor and hearings were held by the House and Senate appropriations committees on that plan. Like the 2015/16 plan, the Governor’s 2016/17 budget proposal included taxes on cigarettes, the elimination of the vendor’s sales tax allowance and new taxes on other tobacco products. PFMA and its members were strongly opposed to these ideas.
Almost immediately following the completion of the 2015/16 fiscal year budget, legislators, staff and the Governor began to try and find an agreed-to budget plan for 2016/17 which would end June 30, 2016.
This was a very difficult process, but with a number of proposals and plans going back and forth between the chambers and the Governor, they finally reached a budget deal and passed legislation to enact the budget plan in July 2016. This plan included taxes on cigarettes, other tobacco products and the elimination of the vendor’s sales tax allowance. PFMA aggressively fought these parts of the budget plan, but the desire to find new revenue to help plug the states sizable budget deficit won out. However, even with these revenue ideas included in the budget, PFMA was successful in making sure there was no increase to the state’s personal income tax or sales and use tax. In difficult budget and fiscal time, this was a major victory in and of itself.
While the budget debate was raging in 2016, PFMA was able to successfully advocate for passage of several highly important priority items for our membership. Those included:
1.HB 1690 (Turzai) - would allow restaurant license holders the ability to sell up to four bottles of wine for off-premise consumption. The legislation would also make it easier for convenience stores to acquire a restaurant license for the sale of beer and wine off-premises consumption. This was an historic piece of legislation that was more than 80 years in the making following prohibition. 2. SB 489 (Yaw) - lowers the fees customers pay for cashing government and government assistance checks, and clarifies that retail food stores are not required by the Department of Banking and Securities to register with the nationwide multi-state licensing system and registry.
Continued from page 3 3. HB 1605 (Lee) - This legislation contained language from SB 691 (Mensch) which provided for an increase in the minimum mark-up on cigarettes for retailers from 6% to 7%. This change in the minimum mark-up was the first time since the mark-up was in place in Pennsylvania that retailers saw an increase. The legislation also included a prompt payment and retention of records provisions for CSA’s along with tobacco sales preemption language. This was another historic piece of legislation passed to benefit PFMA members.
4. HB 1196 (Petri) - This bill made corrections to the historic liquor reform bill (HB 1690) passed earlier in 2016. Some of those changes were allowing holders of wine-expanded permits to submit for a credit on the sales tax they pay to the PLCB, allowing for staffing of registers in the license premises only when a patron is present, which removes an unofficial Pennsylvania Liquor Control Board (PLCB) requirement for license-holders to have a separate entrance for their license premises, and changes the interlocking business standard by increasing the financial interest threshold from 5% to 10%.
5. HB 946 (Baker) - helps to standardize procedures for pharmacy audits. HB 946 also requires PBM’s to register and comply with the Department of Insurance, and places restrictions on PBM’s placing of drugs on the multiple-source generics list. This legislation was nearly five years in the making and another priority for PFMA members.
In addition to the legislative activity in 2015/16, the association experienced a very positive change with the merger of PFMA and the Pennsylvania Distributors Association (PDA). This merger officially took place in May of 2016 with many PDA members joining the PFMA board. The merger of the two organizations has helped to strengthen PFMA’s and PDA’s ability to advocate and advance association priorities. We look forward to continuing these efforts within the new and improved organization.
For the upcoming legislative session PFMA will focus on a number of areas to advance our members priorities. Those include, but are not limited to, changes to the alcohol sales and distribution system, efforts to increase the retailer’s lottery commission rate, extend the SNAP distribution schedule from 10 to 25 days, adjust the vape/e-cigarette tax formula (or eliminate the tax altogether) and make changes to the underground storage tank indemnification board.
The 2015/16 legislative session was a very difficult, but very productive one. PFMA and our members saw a number of historic pieces of legislation passed and were able to prevent many bad ideas and unfavorable pieces of legislation from passing. We could not have achieved these things without the help of members and staff in the General Assembly as well as the Governor and his staff. Most important, the selfless and tireless assistance from our members, their employees and their customers contributed to our overall success. We look forward to what the coming legislative sessions will bring in allowing the possibility of further advancing our members’ priorities.