While Cook County battles in court to impose a tax on sweetened beverages, so-called soda taxes are popping up across the country.
Cook County would be the biggest place to impose the tax, following in the footsteps of Albany, Berkeley and Oakland in California, Philadelphia, and Boulder, Colorado. San Francisco and Seattle are set to begin taxing sweetened beverages on Jan. 1, 2018.
Berkeley was first, assessing a penny an ounce on sweetened beverages beginning March 1, 2015. Philadelphia — with about 1.56 million residents, is the closest in size to Cook County — started collecting 1.5 cents an ounce on Jan. 1, 2017.
Some merchants and the beverage industry have declared the Philadelphia soda tax a failure, while city officials disagree.
“It’s hitting the very communities that the mayor claims [the tax] will help,” said Anthony Campisi, a spokesman for the Ax the Bev Tax coalition. “Supermarkets have seen a tremendous sales decline. We have seen sales increase in cities around us.”
Philadelphia city spokesman Mike Dunn said the soda tax has created 250 jobs, and the city council isn’t concerned that the tax brought in $40 million in its first six months, short of the projected $46.2 million.
“What we’re seeing is all a normal part of a new tax, and that’s been verified by independent, outside experts,” Dunn said.
Cook County expects to raise $68 million through the end of this fiscal year from the soda tax, which will go toward closing a $174.3 million budget shortfall. The county anticipates collecting $200 million from the tax in future years.
The Cook County tax most closely resembles the Berkeley ordinance in which items are taxed. Both target distributors of drinks sweetened with sugar such as sodas and sweetened iced teas.
The success of soda taxes in California contrasts with Philadelphia’s struggles.
Berkeley had collected about $2.5 million from the tax as of January 2017. That money, according to a group of supporters called Berkeley vs. Big Soda, funds many health and nutrition efforts.
“It’s different in every city, but the revenue here has made it possible for the city to invest in health promotion,” said Jennifer Falbe, who partnered with the University of California-Berkeley to evaluate the health effects of the tax.
Soda consumption in Berkeley has dropped by 21 percent, and schools have received money to maintain cooking and gardening programs, Falbe said.
Staunch supporters of the soda tax in Cook County, including doctors and teachers from the American Heart Association, spoke about its health benefits when the ordinance was approved in November.
“Excessive sugar consumption has been linked to some of the nation’s most debilitating diseases, and limiting the consumption of sugar-sweetened beverages will go a long way toward helping people prevent the onset of these diseases, improve health outcomes, and rein in health costs associated with chronic diseases,” said William E. Kobler, a board member of the American Medical Association.
Albany, a small town in northern California, has had more success than it expected after its tax went into effect on April 1. Finance Director David Glasser said he has not received any complaints from businesses about it being a “burden.” Two months after it went into effect, Albany had raised $45,000 and was on track to reach its yearly goal of $225,000.
Many health organizations, along with New York billionaire Michael Bloomberg, supported the California soda tax ordinances last November against the “No Grocery Tax” campaign, said Adam Simons, chief of staff for Oakland council member Annie Campbell Washington. Bloomberg also contributed $1 million to Cook County’s soda tax support effort.
The “No Grocery Tax” campaign represented bodegas, local grocers, as well as larger grocers and corporations, said San Francisco-based Joe Arellano, who headed the “No Grocery Tax” campaign in Albany, Oakland and San Francisco.
Opponents to the San Francisco tax contended it would put a strain on mom-and-pop operations by requiring the labor of counting inventory and submitting expenses.
Like the San Francisco campaign, Illinois retailers voiced concerns about how to carry out the complexity of the regulation and its purpose.
Judge Daniel Kubasiak suspended Cook County’s tax on June 30, the day before it was supposed to take effect. Another hearing is scheduled for Friday, July 28.
David Goldenberg, who represents Can the Tax Illinois, said he believes it’s time for the county to “let it go” and that the tax is about raising revenue “on the backs of families.”
“The best correlation is Philly,” he said. “They haven’t seen a change in how much people are drinking, but where they’re buying it.”
Who has a soda tax?
City/county, Effective date, Tax per ounce
Cook County, pending court challenge, 1 cent
Berkeley (Calif.), March 1, 2015, 1 cent
Philadelphia, January 1, 2017, 1.5 cents
Albany (Calif.), April 1, 2017, 1 cent
Boulder (Colo.), July 1, 2017, 2 cents
Oakland (Calif.), July 1, 2017, 1 cent
San Francisco, January 1, 2018, 1 cent
Seattle, January 1, 2018, 1.75 cents
Places that have considered soda tax
- New York
- New York City
- Washington, D.C.
Countries with sugary drink tax
- United Kingdom