Chicago’s Controversial Soda Tax Heading for Repeal

Cook County commissioners will likely vote to repeal the penny per ounce tax on sugary drinks.

October 10, 2017

CHICAGO – The Daily Northwestern reports that the Cook County Board of Commissioners will likely repeal a controversial beverage tax this week, noting that “enough commissioners have signed on to override a veto by Board President Toni Preckwinkle.”

Per the county’s Finance Committee agenda for the public hearing, it has become “increasingly clear” that the Sweetened Beverage Tax Ordinance, approved and adopted on November 10, 2016, “is a regressive tax which will cause immediate and irrevocable hardship to businesses in Cook County and put those businesses in competitive disadvantage to businesses nearby.”

The notice states that per U. S. Census Bureau data from July 2015 to June 2016, Cook County has lost more population than any other county in the United States, and that it “has been widely reported that one of the main reasons businesses and residents are moving out of Cook County is excessive tax regulations.”

A lawsuit has been filed questioning the constitutionality of the county’s beverage tax ordinance, and Cook County may again be forced “to spend huge sums to defend a potentially unconstitutional ordinance.” The agenda states that a poll “conducted by a credible organization shows that 87% of Cook County residents are not in favor of the sweetened beverage tax,” and although the tax has only been in effect a short time, “it appears that many consumers are crossing county borders to purchase items being taxed and are also buying other items leading to an ultimate loss of tax dollars to our neighboring counties and states.”

Sean Morrison, 17th District commissioner, said in a press release that after numerous negotiations last week, “an agreement has been reached with 11 of my fellow commissioners to sign onto the Sweetened Beverage Tax Repeal Ordinance, which will be called for a vote in the Finance Committee on Tuesday, October 10.”

On October 6, Morrison submitted a substitute amendment that calls for the elimination of the Cook County Sweetened Beverage Tax effective December 1, 2017. 

“I would like to thank my colleagues for working together so diligently to come to an agreement on such an important issue to our constituents and to Cook County. It has not been easy task but in the end, we have reached an agreement that will address the concerns of our residents and businesses and set forth a goal to chart a new fiscal course for Cook County,” he said.

The Daily Northwestern reports that 11 votes are required for a veto, and that 12 out of 17 commissioners have stated that they oppose the tax.

Leading up the vote, local retailers operating in Cook County and industry partners joined to educate the public and county commissioners about the harmful impact the beverage tax is having on their customers and businesses. In a Chicago Tribune op-ed, retailers explained how high property taxes, a minimum wage increase, a plastic bag tax and the beverage tax have combined to make Cook County and inhospitable climate for growing their businesses.

“I have three minimum wages to follow,” said Stephanie Dremonas, a second-generation owner of Pete’s Fresh Market while testifying against the beverage tax at a recent Cook County Board meeting. “I pay over $4 million in real-estate taxes. So you have to find a cheaper way of doing business and none of them have been in Cook County,” she said.

Other local business owners shared similar stories during the Sept. 13 board meeting, adding that addition of the beverage tax convinced them not to open new stores or restaurants, or to expand existing locations in Cook County.

Read more on how beverage taxes are percolating at the local level in the NACS Magazine cover story, “A Costly Pour.”