Preckwinkle mulling tax on sugary soft drinks
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County Board President Toni Preckwinkle is “looking hard” at a new tax on sugary soft drinks — anywhere from half a penny to a full penny an ounce — to close a $174.3 million budget shortfall without employee layoffs, sources said Tuesday.
Last year, Preckwinkle damaged her credibility by reinstating the penny sales tax she campaigned against to generate $474 million in annual revenue to help solve the county’s $6.5 billion pension crisis.
A few months later, Preckwinkle persuaded the Cook County County Board to slap a 1 percent tax on hotel rooms for county operations that brought the total tax on a Chicago hotel room tax to a whopping 17.4 percent.
Preckwinkle turned to the hotel tax after a mini-rebellion on the 17-member County Board forced her to abandon her preferred alternative: to extend the county’s 3 percent amusement tax to cable television and other recreational activities, such as bowling and golf.
Now, Preckwinkle is returning to another controversial revenue idea she considered last year: a tax on sugary soft drinks long championed by public health advocates to curb obesity and diabetes that drives burgeoning health care costs.
Weeks away from the unveiling of her 2017 county budget, sources said Preckwinkle has approached labor leaders in recent days and enlisted their help in lobbying for the new tax as an alternative to layoffs.
That has infuriated labor leaders, who helped Preckwinkle reinstate the penny sales tax increase she campaigned against — with no votes to spare — on the promise that future budgets would not harm workers.
Preckwinkle’s spokesman Frank Shuftan refused to confirm or deny that a tax on sugary soft drinks has floated to the top of Preckwinkle’s list of new revenues.
Shuftan would only reiterate what Preckwinkle said when she released her preliminary budget in early July: that 2017 would be an “extremely challenging year” that may require higher taxes.
“She said she could not rule out the need for additional revenue . . . and has repeated this on a number of occasions,” Shuftan wrote in an email to the Chicago Sun-Times.
“The preliminary budget forecast showed a $174.3 million gap, and we are closely looking at position and program eliminations to confront this gap. This will not be easy but we are having conversations with commissioners, independently elected officials and other stakeholders about the difficult choices that will need to be made. Specifying or commenting on a particular revenue source at this time would be premature.”
Tanya Triche, vice president and general counsel of the Illinois Retail Merchants Association, said she’s been told that a tax on sugary soft drinks of anywhere from a half a penny to a full penny per ounce has risen “to the top” of Preckwinkle’s list of revenue options.
If Preckwinkle forges ahead with the idea, she will live to regret it, Triche said.
It would come on the heels of the county sales tax hike, $838 million in Chicago property tax increases for police, fire, and teacher pensions and a new tax on water and sewer bills to save the largest of four city employee pension funds.
“If you live in Chicago, you’ve been hammered. It used to be that sin taxes were relegated to tobacco and alcohol. Now, we’re going to tax any beverage with added sugar? That hits every family,” Triche said.
“People will look at how much they’re spending in Cook County versus how much less they could spend in adjoining counties and take their money there.”
Sam Toia, president of the Illinois Restaurant Association, said he’s heard that Preckwinkle is homing in on a three-quarter of a penny tax that could add $2 to the cost of a 24-can case of soda pop and an extra dime to the price of a 12-ounce fountain drink sold at a restaurant or bar.
“We pay the highest sales tax in the nation. We just had our property taxes raised twice. We now have a new tax on water and sewer bills. Residents and businesses of Cook County have been nickeled and dimed so much, they have tax fatigue,” Toia said.
“The last think they need is policies that will slow growth, drive businesses out of the county and force businesses to raise prices where it hurts the most: in the wallets of Cook County families. Where do we go next? Do we start taxing the sodium in soup?”
Last year, the chairman of the City’s Council’s Health Committee resurrected his long-stalled plan to slap a so-called “fat tax” on sugary soft drinks as an alternative Mayor Rahm Emanuel’s wildly-unpopular garbage collection fee.
The plan championed by Ald. George Cardenas (12th) went nowhere amid fierce opposition from the Chicago Coalition Against Beverage Taxes co-chaired by Rob Karr, president of the Illinois Retail Merchants Association, and John Coli, president of Teamsters Joint Council 25, which represents unionized beverage delivery and warehouse employees.
At the time, aldermen were warned that Chicago needed authorization from the Illinois General Assembly to tax sugary soft drinks and that, if the City Council tried to do it alone, the American Beverage Association would file a lawsuit seeking to overturn it.
On Tuesday, Toia argued that the same legal caveat would apply to Cook County. He called the tax on sugary soft drinks a “regressive” job-killer that could reverse the growth of Chicago’s burgeoning restaurant scene.
At City Hall, the fight over a tax on sugary soft drinks became a full-employment program for lobbyists.
Former Mayor Richard M. Daley’s longtime corporation counsel Mara Georges and Victor Reyes, former chieftain of the Hispanic Democratic Organization at the center of the city hiring scandal, represent the American Beverage Association. Mike Kasper, who helped Mayor Rahm Emanuel survive a 2011 residence challenge, is a lobbyist for restaurant and hospitality giant Delaware North.