Cook County, Home of Chicago, Becomes Largest Locale With a Soda Tax
By Hal Dardick
Cook County Board President Toni Preckwinkle personally ensured her controversial new penny-an-ounce pop tax passed Thursday by breaking a rare tie vote among commissioners.
The two-term board president stepped further into the glare of a spotlight because she's counting on the $224 million a year the beverage tax is expected to bring in to balance the books for a while.
"Raising revenue was never my first choice," Preckwinkle said. "This measure provides important revenue, not only to avoid damaging cuts for public health and public safety systems, but also to expand our community-based interventions in both arenas. It also puts us on a stable financial footing for the next three fiscal years, during which we will not have to approve any additional tax increases."
Asked after the vote why the county could not make further spending cuts, Preckwinkle defended her six-year record, saying she had reduced the workforce by 10 percent and overall debt by a slightly greater percentage.
Preckwinkle also pointed to 300 layoffs included in next year's $4.9 billion budget proposal that's scheduled for a vote Tuesday. "We've tried very hard to be as efficient and effective as we possibly can in our budgeting process," she said.
Along with the new beverage tax, the county also passed an ordinance barring further sales tax increases, or property tax increases beyond the rate of inflation, before 2020 -- a measure proposed by Commissioner John Fritchey, D-Chicago, who voted against the beverage tax. That has the political advantage of pushing off further major tax increases until after the 2018 elections, when Preckwinkle's office and those of all 17 commissioners are on the ballot.
The new tax on sugary and artificially sweetened beverages goes into effect July 1. Cook County, with its 5.2 million residents, will become the largest locale in the nation to put in place a pop tax. Philadelphia approved a tax earlier this year, and voters in Oakland, Calif., San Francisco and Denver on Tuesday approved referendums to enact such a tax.
In all those places, TV viewers and radio listeners were bombarded with ads against the tax financed largely by the American Beverage Association and spots supporting it bankrolled by former New York Mayor Michael Bloomberg, a longtime advocate of reduced sugar consumption.
The tax will apply to all sugar and artificially sweetened drinks, including pop, sports drinks, lemonade and iced tea, adding 72 cents to the cost of a six-pack of soda or 68 cents for a 2-liter bottle. The tax also will be imposed on fountain drinks at a penny an ounce, bringing the tax on a 7-Eleven Gulp to 32 cents and on a Double Gulp to 50 cents. It won't apply to drinks bought with a Link card issued to families in the Supplemental Nutrition Assistance Program because additional consumer taxes can't be added under the federal program.
It's the latest tax increase Preckwinkle pushed through a divided County Board. Last year, Preckwinkle won approval of a 1-percentage-point sales tax increase. The moves further erode Preckwinkle's onetime reputation as a tax-lowering, cost-cutting leader of county government.
She was initially elected in 2010 on a pledge to eliminate the remaining portion of the sales tax increase enacted under her one-term predecessor, Todd Stroger. Now, in the past 16 months, she's restored the Stroger tax, slapped a new tax on sweetened beverages and approved a new 1 percent tax on hotel stays.
The pop tax vote came after nearly three hours of public testimony, with retailers saying it will harm their bottom lines and health advocates saying it would help reduce rates of diabetes, obesity, heart disease and tooth decay.
Representatives from the beverage industry said it was a regressive tax that would hit low-income people hardest and worsen already declining sales of products that create many well-paying union jobs in the Chicago region.
Tanya Triche of the Illinois Retail Merchants Association suggested a legal challenge could be coming on the basis of double taxation, given that sales taxes already are applied to beverage purchases.
"This is a tax on a tax, what is being imposed today," Triche said. "We don't even think that's lawful to do in the state of Illinois."
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.
Commissioner Jesus "Chuy" Garcia, D-Chicago, chafed at suggestions from some opponents that the tax was needed because of county mismanagement, noting that under Preckwinkle the county had increased the sales tax to shore up a long underfunded worker pension system and significantly reduced the size of the jail population.
"The revenue measure that we're considering today is endorsed by groups like the Civic Federation, certainly not a liberal or a progressive think tank," said Garcia, who argued it was the best option to keep the county in the black financially without harming services.
And Commissioner Deborah Sims, D-Chicago, characterized it as "a choice tax. They can choose not to buy the beverage, or they can choose to buy it."
Countering those arguments was Commissioner Timothy Schneider, R-Bartlett, whose northwest suburban district borders DuPage and Lake counties. Businesses just over the border in those counties are thriving, he said, with "signs that are prominently displayed all over the place: 'No Cook County taxes.'"
"When will they learn that people have choices and they're choosing to leave?" Schneider asked before voting against the tax. "I'm proud to be considered 'Commissioner No.'"
Voting for the tax were Luis Arroyo Jr., D-Chicago; Jerry "Iceman" Butler, D-Chicago; John Daley, D-Chicago; Garcia; Edward Moody, D-Chicago Ridge; Stanley Moore, D-Chicago; Sims; and Larry Suffredin, D-Chicago.
Voting against the tax were Richard Boykin, D-Oak Park; John Fritchey, D-Chicago; Bridget Gainer, D-Chicago; Gregg Goslin, R-Glenview; Sean Morrison, R-Palos Park; Schneider; Peter Silvestri, R-Elmwood Park; and Jeffrey Tobolski, D-McCook.
Absent was Commissioner Robert Steele, D-Chicago, a Preckwinkle ally who was hospitalized earlier in the week.
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