Chicago Commissioners Vote to Repeal Soda Tax

Chicago has turned sour on its sugary drink tax.

Barely two months after going into effect, the finance committee of the Cook County, Ill. Board of Commissioners today voted 15-1 to repeal its controversial tax one-penny-per-ounce tax on sugar-sweetened beverages, known as the Sweetened Beverage Tax Ordinance. The repeal will now go to a full board vote on Wednesday, where it is expected to receive final approval.

Lawrence Suffredin, representing the 13th district, was the lone county commissioner to vote against the repeal. “I am proud to be the only person who will vote ‘no’ today,” he said, according to Hal Dardick, a City Hall reporter for the Chicago Tribune.

If approved, the tax will expire on December 1.

The decision marks a significant victory for the soda industry and local retailers who blamed the tariff for declining beverage sales, and is a blow to public health advocates who hoped to set an example by implementing a sugary drink tax in a region that includes Chicago, the nation’s third most populous city. Cook County has a population of over 5 million people, according to data from the U.S. Census Bureau.

The repeal is a heavy loss for the tax’s chief advocate, Cook County President Toni Preckwinkle, who cast the deciding vote that broke an 8-8 tie when the law was approved in November 2016. The law went into effect on August 2 after a judge dismissed a suit by the Illinois Retail Merchants Association (IRMA) alleging that the tax was unconstitutional.

Preckwinkle included the projected $200 million in revenue that the tax was expected to generate next year in the new $5.4 billion budget for 2018. In her annual budget address last week, she defended the bill and painted a grim scenario should the repeal succeed, forecasting 11 percent cuts across-the-board.

“The choice is simple: do we want Cook County to be healthier, safer and more efficient or do we want to go backwards,” Preckwinkle said in the speech, warning of layoffs in the public sector and shuttered health clinics.

The tax had been assailed by various groups since it was approved last year, but momentum against the law accelerated in recent weeks. Campaigners on both sides of the issue have backed their respective causes with considerable financial muscle. According to a report in the Chicago Tribune, the Can the Tax Coalition, an organization that includes local store owners and soda industry group the American Beverage Association, has spent at least $3.2 million in anti-tax TV and radio ads. The group also organized several public rallies to bolster support for their cause.

Meanwhile, former New York City mayor and staunch anti-soda advocate Michael Bloomberg pumped over $10 million into ads backing the law, just months after spending over $3 million in a failed effort to boost a proposed soda tax in Sante Fe, N.M.

Last Thursday Preckwinkle lost a key ally when Cook County Board finance chairman John Daley announced he would no longer support the tax. One day later, commissioner Sean Morrison announced that he and 11 colleagues had reached a deal to repeal the Ordinance, giving them a veto-proof majority that ultimately proved unnecessary on Tuesday.

In a statement posted to its website, Can the Tax praised the Board’s decision: “Today’s action by the Finance Committee is a critical step to ending Cook County’s unfair, over-reaching and unpopular beverage tax. Cook County working families and businesses have overwhelmingly rejected the county’s beverage tax. Their voices and opposition to the tax have been clear and consistent. Commissioners were listening and common sense has prevailed.”

IRMA also commented on its Facebook page, writing “Glad the Cook County Finance Committee voted to discontinue bad policy by passing the vote to repeal the Cook County Sweetened Beverage Tax. We look forward to tomorrow’s vote by the Cook County Board.”

Preckwinkle released a statement thanking supporters of the Ordinance, including the American Heart Association and the Illinois Public Health Institute, while sounding a conciliatory note. It read in part: “Today the board exercised its collective will and set in motion a repeal of the sweetened beverage tax we approved last year. As I outlined last week, it is up to the commissioners to choose our direction on revenue, and I respect their authority to do so. Now, together, we must chart a new course toward the eighth consecutive balanced budget of my tenure as board president.“

Following several years of gains for soda tax advocates in cities like Boulder, Colo., San Francisco and Philadelphia, the repeal of Chicago’s sugar tax could suggest a turning of the tide in the public attitude towards such measures. The nonpartisan Tax Foundation recently released a report critical of the efficacy of Philadelphia’s soda tax, noting that “despite constituent support for the programs funded by the tax, the actual revenue for programs remains unstable due to poor collection performance, with potential that those revenues will continue to fall.”

Cook County commissioner John Fritchey, a Democrat from Chicago, suggested taxing legalized recreational marijuana as an alternative revenue source in lieu of a soda tax, and is introducing a county board resolution to do so.