Preckwinkle to propose Cook County tax on pop, lemonade, sports drinks – Chicago Tribune
Cook County Board President Toni Preckwinkle on Thursday will propose a penny-an-ounce tax on sweetened beverages including pop, lemonade and sports drinks to help close a 2017 budget shortfall, a move that comes just 15 months after she pushed through a penny-on-the-dollar sales tax increase, commissioners said.
On the eve of her budget speech, Preckwinkle spent much of the afternoon briefing commissioners on her plans for bridging a $174 million gap that her staff first identified in late June. The new tax would be combined with about 300 layoffs and elimination of 297 vacant positions, commissioners said. In addition, Preckwinkle would reduce salary increases for nonunion workers, they said.
The beverage tax would boost the cost of pop and the like by 72 cents for a six pack of soda or 68 cents for a two-liter bottle. The tax also would be imposed on fountain drinks. And it would be applied to drinks with sugar and artificial sweeteners, commissioners said. In its first year, it would raise an estimated $74.6 million.
It could be a tough sell, with the American Beverage Association running TV and radio ads against the proposal before it was even announced and County Board members wary of imposing yet another tax on the voters who elect them.
But Preckwinkle is offering commissioners a bit of a political lifeline, saying she won’t propose any more new taxes in the following two budgets, which would spare them from more difficult votes until after the 2018 campaign cycle, commissioners said.
Five commissioners briefed Wednesday spoke to the Chicago Tribune to confirm the details of private discussions. In response to Tribune inquiries, a Preckwinkle budget spokesman would not confirm the details relayed by commissioners, but did seek to justify the administration’s approach.
“We have been forthright about the need to make decisions to close our preliminary gap while not kicking the problems we inherited to future generations,” an administration statement read. “We are committed to balancing our budget over a three-year planning horizon and do not believe it serves our taxpaying public and residents to address a new fiscal crisis each budget cycle.”
If commissioners approve the new sweetened beverage tax, it would exacerbate the county’s reputation as a high-tax zone, said Tanya Triche of the Illinois Retail Merchants Association that is part of the No Cook County Beverage Tax Coalition.
“The County Board has created that understanding that when people buy things in Cook County they are going to pay more,” Triche said. “It’s not just in sales tax, but it’s in the gas tax, it’s in the tobacco tax, it’s in all those things.”
That image, she said, encourages shoppers to cross county borders to buy their goods.
“It’s just the reputation that the county is really creating for itself, that there are always new things to tax, and taxes can always be increased,” Triche said. “And you don’t get that sense in Will, you don’t get that sense in Lake and you certainly don’t get that sense in DuPage.”
Preckwinkle on Thursday is expected to make the argument that the tax, in addition to bringing in needed money, would help in the public health battle against obesity and diabetes.
“The president wanted us to consider a sugary drink tax to fight obesity,” said Commissioner Stanley Moore, D-Chicago, who said he is evaluating the proposal. “The World Health Organization has issued a report on sugary beverages causing obesity and diabetes at an alarming rate, so that’s one of the reasons she wanted us to consider a beverage tax.”
Similar arguments were used in Philadelphia, which earlier this year became the largest U.S. city to vote to impose such a tax — a move that is being challenged in court by the American Beverage Association, which spent millions of dollars in a failed effort to defeat the measure.
San Francisco also has a sweetened beverage tax proposal on the November ballot. New York, under former Mayor Michael Bloomberg, enacted a ban on large sugary beverages, such as Big Gulps at 7-Eleven, but courts struck it down.
The World Health Organization has called for taxes on sweetened beverages, saying in a 2016 pamphlet that “evidence shows that a tax of 20 percent on sugary drinks can lead to a reduction in consumption of around 20 percent, thus preventing obesity and diabetes.” That pamphlet goes on to say that a penny-an-ounce tax across the U.S. would result in $17 billion in health care savings over 10 years while generating $13 billion a year.
Many U.S. cities have increased taxes on tobacco, justifying it as a way to cut down on its use. Chicago has the highest cigarette taxes in the nation, which public health advocates have credited for helping reduce tobacco use. It also has led to steadily decreasing tax revenue for the city and county because fewer people are smoking and smokers are crossing borders to buy their cigarettes.
The beverage tax would apply throughout the county, including Chicago, where there’s already a 3 percent tax on retail sales of soft drinks in cans or bottles and a 9 percent tax on the wholesale price of fountain drink syrup. An effort by aldermen to push a sweetened beverage tax on top of that fizzled a year ago amid opposition from industry and Mayor Rahm Emanuel, who had his own ideas about bringing in more money.
Voting on yet another tax could be particularly difficult for commissioners who live in Chicago. The city in the past year has approved a record-high property tax increase and a new tax on city water and sewer service to increase contributions to its deteriorating government worker pension funds. And suburban commissioners are likely to worry about cross-border shoppers hurting local businesses.
“We’ve been adding tax upon tax. We need to cut our costs,” said Commissioner Gregg Goslin, R-Glenview, who is opposed. “We increase taxes every year — I mean huge amounts of money.”
Claudia Rodriguez, acting executive director of the Illinois Beverage Association, said in a statement: “Now is not the time for Illinois families to endure a tax on their groceries. Enough is enough. Nearly 90,000 jobs in restaurants, grocery stores, convenience stores, movie theaters and more rely on the industry — all of which could be hurt by a proposed tax.”
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