Soda tax hearings bubble over with debate
When 12th Ward Ald. George Cardenas arrived on City Hall’s 2nd floor Wednesday, he met a lobby full of teamsters wearing shirts emblazoned with the words “Pepsi,” “Coca-Cola,” “7Up” and “Dr Pepper.”
They were there with Teamsters Local 727 President John Coli, an early supporter of Mayor Rahm Emanuel and an opponent of Cardenas’ proposed penny-per-ounce soda tax.
“This tax — the third tax in recent memory — would do nothing but harm the middle class,” Coli said in a press conference before Health Committee hearings on the proposal.
More opposition came from the soda lobbyists at the American Beverage Association. They enlisted former corporate counsel for Mayor Richard M. Daley, Mara Georges to take a look at the proposal. She predicted that, if passed, the tax would “not hold up to legal challenge” because the city already taxes soda at the maximum rate the state allows.
Also on board for the opposition is lobbyist Mike Kasper, the lawyer who helped Emanuel fight his 2011 residency challenge.
When asked if he was intimidated by these influential opponents, Cardenas, who also chairs the City Council’s Health Committee, was philosophical.
“We’re put in these positions of leadership to make decisions, unpopular as they may be,” he said. “At the end of the day, if you have passion for the right thing you say it and people are going to be complimentary sometimes and sometimes not complimentary.”
Those who were not complimentary to the proposal were representatives of the Illinois restaurant industry, bottlers and retailers. They noted that the city already imposes two taxes on soda (one on bottled soda and one on fountain drinks).
But supporters note that this is an excise tax — not a sales tax. That means it would be reflected in the shelf price (of about 68 cents more for a 2 liter), making it, theoretically, more effective in changing behavior than the current lower taxes that are noticeable only on receipts.
Opponents also claim the tax would cost Chicago revenue and jobs as consumers buy soda in nearby towns that don’t impose the tax.
Tanya Triche of the Illinois Retail Merchants Association warned that if stores near the edges of the city “don’t stay profitable they will close and we have seen lots of closings of grocers, convenience stores and gas stations near the edge of the city.”
University of Illinois at Chicago professor Lisa Powell, however, says that her predictive models don’t show statistically significant net job losses. Instead, the economist and health policy analyst says, the jobs lost in the beverage industry from lower soda sales would be made up in other areas.
In the past, Mayor Emanuel has resisted the kind of anti-soda proposals his counterparts have embraced in New York, Boston and Philadelphia. His previous strategies have stressed personal responsibility and partnerships with the soda industry to pay for health programs.
But speaking at an event after the hearings, the mayor did not rule out a tax completely.
“The notion of a sugary [drink] tax is all about curbing behavior in the same way that we’ve done certain things about reducing smoking in this city,” he said.
Emanuel says he wants to hear budget-balancing suggestions from all of the aldermen, and he sees the soda tax as one of them.
Cardenas stressed that Wednesday’s hearing was a subject hearing, not a budget hearing or an opportunity for a vote. But regardless of the final vote, he said, he wanted to start a conversation.
“I think we are going to come out of this with some consensus and at least some knowledge,” he said. “My whole point was to educate some people on obesity and diabetes…[the tax] is an option on the table from health advocates like myself.”
Some have floated the tax as a possible alternative to the garbage collection fees. Cardenas won’t speak directly to that possibility, saying only, “Could it replace something else? Well, surely when you get to the next phase of budget hearings, it could be an option as well.”
Monica Eng is WBEZ’s food and health reporter. Follow her at @monicaeng or write to her at email@example.com