CHICAGO — The Chicago Coalition Against Beverage Taxes has come out against alderman George Cardenas’ proposed sugary-beverage tax, which would impose a 1-penny-per-ounce tax on syrup, powders and canned and bottled drinks, including juices, teas and sodas.
“We all understand the critical importance of helping children and families make informed choices about their diet and exercise,” said Rob Karr, president of the Illinois Retail Merchants Association and honorary co-chairman of the Chicago Coalition Against Beverage Taxes. “The only way we will truly make a meaningful impact in this area is by educating families on how to lead a balanced lifestyle by developing partnerships that pursue real solutions. Burdening struggling businesses and working-class employees with additional taxes that kill jobs will do little to address the issue.”
The coalition includes more than 1,000 concerned Chicago families, small businesses—including many convenience stores and quick-service restaurants—labor unions, chambers of commerce and community organizations.
The nonalcohol-beverage industry has a significant effect on the Illinois economy, providing more than 7,500 high-paying jobs, $610 million in wages and $1.5 billion in state and federal taxes every year, the coalition pointed out. That’s a direct economic impact of $5.2 billion.
Other business sectors and their employees benefit from the industry to the tune of more than 114,000 jobs in restaurants, grocery stores, convenience stores, movie theaters and more—“all of which will be hurt by this discriminatory tax,” the coalition said.
“The regressive beverage tax being proposed by the Chicago City Council will hit many … minority-owned businesses and their hard-working employees right where it hurts: their bottom lines,” said Omar Duque, president and CEO of the Illinois Hispanic Chamber of Commerce. “My members already face enough headwinds while striving to build and maintain successful businesses and meet payroll for their employees. The last thing they need is the government piling on with another job-killing tax.”
The Chicago Coalition Against Beverage Taxes is asking aldermen to stand up for Chicago families and businesses by opposing the new discriminatory tax. The City of Chicago already taxes soft drinks twice. Another tax on these beverages will put many Chicago jobs at risk and unfairly penalize consumers, according to the coalition.
“Chicago restaurants and small businesses, like consumers, are once again starting to thrive after experiencing one of the worst economic downturns in our nation’s history. The last thing we need is to implement discriminatory policies that will slow growth, drive business out of the city and force businesses to raise prices where it hurts the most: in Chicago families’ wallets,” said Sam Toia, president & CEO of the Illinois Restaurant Association and a coalition member. “Adding a third tax on these products will have disastrous unintended consequences, including higher prices at neighborhood grocers and restaurants, and job losses across several industries.”
Cardenas proposed the tax in July, saying it could mean $134 million in new annual revenue for the city while also aiding in the battle against obesity. In his proposal, 75% of the revenue generated by the tax would go into a “Chicago Wellness Fund” used to pay for city and Chicago Public Schools health initiatives.
Opponents say there are too many negative factors to consider.
“There are 1,400 union employees in Chicago whose livelihoods are directly or indirectly dependent upon the non-alcoholic beverage industry,” said John Coli, president of Teamsters Joint Council 25 and honorary co-chairman of the Chicago Coalition Against Beverage Taxes. “Additionally, there are nearly 40,000 small business owners and their hard-working employees who could face layoffs should our aldermen add another tax to the cost of these products. Our union stands strongly opposed to this hurtful tax.”
Taxes on beverages do not improve public health, the coalition said. States that have an excise tax on soft drinks, such as West Virginia and Arkansas, rank among the top 10 most obese states in the country, according to the Centers for Disease Control and Prevention. States with no soda tax, such as Colorado and Vermont, continue to rank among the least obese states.
Educating people about balance is key to helping change the behaviors that can lead to obesity, the coalition said.