UPDATE: Chicago area soda tax repealed
Editor's note: This story has been updated with the results of Wednesday's commission vote.
- Cook County, Illinois, has repealed its controversial penny-per-ounce tax on sweetened beverages, which has been in effect since Aug. 2. The county's board of commissioners voted 15-2 on Wednesday to end the tax, according to the Chicago Tribune, so it will no longer be collected after Nov. 30.
- Some of the approximately 5.2 million residents of Cook County, which includes Chicago and is the second most populous county in the U.S., have reportedly been buying soda and other sweetened beverages outside the area rather than pay the tax in Chicago or elsewhere within the county.
- Cook County will now have to find other sources to replace the estimated $200 million the soda tax was projected to raise during its first full year of operation. A spokesperson for County Board President Toni Preckwinkle told the Daily Herald it has brought in $16 million so far.
While Cook County isn't the only local jurisdiction to have passed a tax on sweetened beverages, it's the largest in terms of population and has been the most politically contentious. The proposal passed last fall by a 9-8 vote of the Cook County Board of Commissioners — and only because Preckwinkle broke the tie.
Opposition to the county's soda tax continued before, during and after its passage, with critics claiming the whole thing was merely a ploy to raise tax revenue by citing public health concerns. A poll conducted in early August for the Illinois Manufacturers' Association found that nearly 87% of county residents disapproved of the tax, and more than 80% said they believed it was created primarily to raise money.
Most polls and surveys show that people support soda taxes as long as the money goes toward programs like preschools and children's health programs, or help address obesity. Cook County's tax goes into the county's general operating coffers. Preckwinkle has said that the county would need to reduce next year's spending by 11% if the tax is repealed — even though it amounts to only 5.8% of all funds.
According to a recent Politico-Harvard poll, the most support for soda taxes comes from Democrats (63%), followed by independents (57%) and then Republicans (44%). Since Cook County is one of the bluest in the country — all but four of the 17 elected county commissioners are Democrats — it bucks that trend as well.
Soda manufacturers and retailers can't wait to see the end of this tax in Cook County, or in any other local jurisdiction where it exists. PepsiCo, Coca-Cola and Dr Pepper Snapple say they have millions of dollars of revenue on the line and call soda taxes a money grab by municipalities unfairly singling out sweetened beverages. If the intent was to push consumers to curtail sugar consumption, they say, other sweet treats such as candy and ice cream would be included.
Retailers in Philadelphia, which has had a 1.5-cent-per-ounce soda tax since the beginning of this year, say they are suffering devastating losses. PepsiCo said it would lay off 80 to 100 workers there after sales dropped 40%. In Berkeley, a recent study revealed sales of all sugar-sweetened beverages decreased approximately 9.6% during the first year of its penny-per-ounce tax.
Meanwhile, Cook County faces continuing budget problems that will only get worse without additional revenue from the soda tax. When the tax was put on hold this past summer pending an ultimately unsuccessful legal challenge by the Illinois Retail Merchants Association, Board President Preckwinkle sent out 300 layoff notices to county employees.
Cook County Commissioner John Fritchey, a Democrat, has an idea for raising more revenue than a soda tax. He recently called for the Illinois Assembly to pass a recreational marijuana law, which he said would bring in $350 million to $700 million per year, and he claims 70% of county voters support legalization.
- Beverage Daily Cook County Sweetened Beverage Tax could be gone by December
- Chicago Tribune Cook County Board repeals pop tax