Soda Tax Repeal in Cook County Marks Major Win for Industry
By Hal Dardick
The Cook County pop tax is headed for repeal after commissioners overwhelmingly signaled their intent to do away with it, marking a big win for soda companies and store owners after both sides spent millions of dollars to sway public opinion on the issue.
A 15-1 test vote on Tuesday makes Wednesday's final consideration a mere formality. County Board President Toni Preckwinkle, who pushed hard to keep the pop tax, conceded defeat, even as she challenged commissioners to come up with a way to make up the estimated $200 million hole about to be blown in the 2018 budget.
That, however, is a struggle that will play out over the next month. On Tuesday, commissioners from both political parties who voted against the pop tax nearly a year ago got to proclaim victory.
"Our history is full of examples of what can happen when our leaders engage in taxation without representation. It's a story as old as our American Revolution," said Commissioner Richard Boykin, an Oak Park Democrat. "It doesn't matter whether you tax tea or tax sugar. Eventually people get fed up. Eventually people say enough is enough. That is what happened here."
Added Commissioner Sean Morrison, a Palos Park Republican who was the lead sponsor of the repeal: "The Cook County Board has heard you loud and clear ... Opposition has been strong and consistent across all segments of our county."
The pop tax won't go away until Dec. 1 under a deal reached to avoid more spending cuts during the county's current budget year. Even so, the penny-an-ounce soda tax stands to be one of the shortest-lived in Illinois history at only four months. Delayed by a month due to an Illinois Retail Merchants Association lawsuit, the tax didn't take effect until Aug. 2.
Big Soda's win here is remarkable, both because Cook County is by far the largest jurisdiction in the country where such a tax was enacted and that it comes after a series of defeats elsewhere.
Despite spending tens of millions of dollars to oppose soda taxes last November in three California locales -- San Francisco, Oakland and Albany -- each city won approval through voter referendums for penny-an-ounce taxes on sugar-sweetened beverages. That was a year after voters in Boulder, Colo., approved a 2 cents-an-ounce tax on sugar beverages.
The Philadelphia City Council approved a 1.5 cent-an-ounce tax on both sugary and diet beverages earlier in 2015. It's still in place, despite a concerted effort by the American Beverage Association to highlight what it calls an unfair, regressive tax that harms local store owners.
The industry group has won some battles, getting voters in Santa Fe, N.M., to reject a soda tax in a referendum earlier this year. Just last week, the Michigan legislature sent to the governor a measure aimed at preventing local governments from enacting soda taxes.
A similar opposition effort was launched in Cook County last November after Preckwinkle broke a rare 8-8 tie to approve the tax, which she maintains is needed to prevent harmful cuts to public health and criminal justice system programs. She called the tax the only option she could get the board to approve -- and one that also had the public health benefit of reducing consumption of sugar and the ailments like obesity, diabetes and heart disease that it can exacerbate.
Preckwinkle enlisted to her cause former New York Mayor Michael Bloomberg, a billionaire public health advocate. The media empire owner spent more than $10 million on TV and radio ads promoting the public health benefits of the tax -- an effort many observers felt may have backfired. That sentiment was voiced at Tuesday's committee meeting.
"That's to me very insulting to me, every time I see those commercials," Robert Ellis told commissioners during several hours of testimony before the vote. "I get more and more angry, because I don't need some Gotham City billionaire telling me how to live my life here in Cook County."
"Repeal this tax yesterday," Ellis said. "Whoever thought of this -- they need to think again."
Ellis' opinion was among 3,968 opinions expressed, through online forms, written statements or public testimony, in the lead-up to the committee vote, board Secretary Matthew DeLeon said. Of those, more than 79 percent were in favor of repeal.
Some were surely motivated by the Can the Tax campaign, which included more than $3.2 million spent on TV and radio ads urging repeal, not including what it paid to send out mailers, hire $11-an-hour neighborhood canvassers to get the message out and paid public affairs consultants to work the media.
Also playing a role, noted Commissioner John Fritchey, a Chicago Democrat who has opposed the tax from the start, was "tax fatigue." In recent years, city residents have been hit with a record city property tax increase, large boosts in the Chicago Public Schools property tax levy, higher water bills and a recent major state income tax hike. "Simply put, the financial health of too many of my constituents is in critical condition, and I cannot in good conscience add to their suffering," he said.
In the end, the strong opposition to the pop tax, combined with commissioners' fear that they'd be ripe targets for defeat in next year's elections, overcame any sway held by the tax's increasingly isolated backers, including public health advocates, unions representing county workers and county officials appointed by Preckwinkle.
"It looks like diabetes is the big winner here today," said Elissa Bassler, CEO of the Illinois Public Health Institute. "Congratulations."
Bassler called the pop tax "good public policy to ensure the health of children and families of Cook County and ensure vital health and public safety services."
Within hours of Preckwinkle's 2018 budget presentation last week, in which she warned of 11 percent across-the-board cuts to vital county services, influential Democratic Finance Committee Chairman John Daley, who voted for the tax last year, announced he would vote the will of the residents in his district and back repeal. Three other commissioners, including Jesus "Chuy" Garcia, a Chicago Democrat who is Preckwinkle's floor leader, joined him the next day.
That created a veto-proof majority of 12 -- it takes 11 votes to override -- making it a futile and politically risky vote for anyone who voted against repeal, especially given the pledges by pop sellers to put their money where their mouths were when it came to defeating pop tax supporters in next year's elections.
Countywide elected officials, many of whom on Tuesday decried the cuts that could result from a pop tax repeal, did not support the tax. That left Commissioner Timothy Schneider, a Bartlett resident and chairman of the Illinois Republican Party, to decry a "sky-is-falling" mentality and declare, "You can't have it both ways."
Only Treasurer Maria Pappas said it was no problem to repeal the tax, adding that she was prepared to cut 12 percent from her budget without harming services. "I'm opposed to the soda pop tax," she said.
Commissioner Larry Suffredin, an Evanston Democrat, cast the lone vote against repeal, calling the tax "essential" for the delivery of county services and saying he admired Preckwinkle for her efforts to fight for the tax and praising Bloomberg for his years of public health campaigns for gun control, tobacco taxes and soda taxes. Commissioner Jerry "Iceman" Butler, a Chicago Democrat, was absent.
Daley said the work of cutting 11 percent from Preckwinkle's proposed $5.4 billion budget was about to begin. Noting that the bureaucracy directly controlled by Preckwinkle accounts for less than 10 percent of county spending, Daley urged other countywide elected officials like the sheriff, state's attorney and circuit court clerk -- who he said were "extremely silent on this tax" -- to help balance the budget.
"Before we go to any tax whatsoever, we have to prove to the people of this county that our budget is in order," Daley said.
Longtime county Clerk David Orr, who pledged his cooperation, suggested that might not be so easy.
"I don't think people are trying to scare you," Orr said of his fellow elected officials, "but $200 million is a lot of money, and people will lose their jobs and some services may be cut."
Meanwhile, Democratic Commissioner Jeffrey Tobolski of McCook pushed back against the contention that county government cannot do without the money the pop tax generates.
"Our focus needs to change from the Cadillac plan to the one that we can afford," Tobolski said. "We gotta take the $200 million out of the budget. That's what we gotta do."
"This is not our money," added Tobolski, who said it was "being taken from the working families of Cook County."
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