Why Chicago’s soda tax fizzled after two months — and what it means for the anti-soda movement

 In Business

A sign sponsored by opponents of the new Cook County tax on sweetened beverages is posted in the soda aisle of Tischler Finer Foods in Brookfield, Ill. (Sara Burnett/AP)

About two months after the country’s largest soda tax went into effect, embattled lawmakers in Cook County, Ill. — the home of Chicago — have decided to repeal it.

The tax has been plagued, in its very short life, by legal challenges, implementation glitches and a screeching, multimillion-dollar media battle between the soda industry and public health groups. On Tuesday, in recognition of growing public pressure, the Cook County Board of Commissioners voted 15-1 to roll back the tax, effective as soon as Dec. 1.

It’s a major victory for Big Soda, which has spent millions on ad buys, lobbyists and political contributions in the county. It’s also the second blow this year to the soda tax movement, which suffered a defeat in Santa Fe, N.M., in early May.

Advocates of that movement — which include a number of top public health groups and former New York City mayor Michael Bloomberg — have advanced the taxes as a means to fight obesity while also raising revenue for local jurisdictions.

But critics say the collapse of the Cook County tax is proof the national soda tax movement is losing its momentum.

“It doesn’t matter if you tax tea or sugar,” said Commissioner Richard Boykin, who represents the West Side of Chicago, referencing the run-up to the Revolutionary War. “Eventually people say ‘enough is enough.’”

Unlike other cities and counties that have passed soda taxes in recent years, Cook County was arguably cursed from the start.

The county of 5.2 million people was already contending with budgetary woes and widespread voter frustration with state and local government when the board voted in November 2016 to levy a 1-cent-per-ounce tax on soda and other sugary drinks.

The measure was pitched largely as a means to plug a $1.8 billion budget gap, and secondarily as a means to improve public health by discouraging the consumption of beverages linked to obesity and other conditions.

In an Oct. 5 budget address, Cook County President Toni Preckwinkle, the most stalwart defender of the soda tax, argued that county services — including hospitals, clinics and community intervention programs — would suffer without the tax.

“A vote to repeal is a vote to reduce vital community investments,” she said. A spokesman for her office declined to comment on the likely repeal of the tax.

But there were early signs that the soda tax might not raise the revenue advocates hoped, and certainly not on the intended schedule. The policy’s rollout was dogged by implementation errors and legal challenges.

An early version of the tax, for instance, was aimed at distributors, who would then pass the cost on to consumers. But the county was forced to revise that plan when it realized that it would make the soda tax subject to an additional sales tax, which is illegal in Illinois.

Shortly after that, the county proposed making the tax a line item at the point of sale, much like sales taxes are assessed currently. But local governments are not allowed to tax transactions that are paid for using federal nutrition benefits, which meant the county had to exempt more than 870,000 people from paying the tax — a last-minute change that dented revenue expectations.

When the tax finally did go into effect on Aug. 2, following a lawsuit by the Illinois Retail Merchants Association, it was met with staunch public opposition: Consumers have organized highly visible boycotts, driving to nearby Indiana for groceries, and flooded their representatives with complaints.

Several Cook County commissioners who switched their votes in favor of repeal have cited that outrage.

“I have heard from the people of my district, overwhelmingly,” said Commissioner John Daley during the Tuesday hearing, which stretched on for hours as proponents and opponents of the tax testified to the board’s finance committee.

The question now — for soda tax critics and supporters alike — is whether Cook County’s failed soda tax is a sign of things to come in other jurisdictions. While the battle was ostensibly fought by state and country groups, it’s well-acknowledged on both sides that local soda tax skirmishes are essentially proxy wars between the national soda industry and well-monied public health groups.

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