Last month we looked at the state of the Cook County, Illinois soda tax, passed into law in December of last year. They had barely gotten the sin tax (which affects Chicago primarily) into motion before realizing that it probably violates the state constitution. They have a workaround in progress which seems dodgy enough as it is, and for the time being they are collecting it. The county executives insisted that it would work out for the best, improving everyone’s health and raising tons of money.
Long before it went to effect we were warning the county that this experiment has been tried in cities around the nation and it’s almost uniformly failed in spectacular fashion. So it would be a real shocker to see it be a big success in the Windy City, right? Fear not. Local retailers are already screaming because their sales are down by nearly fifty percent and they’re predicting that they’ll need to cut back on workers. (CBS Chicago)
In the latest salvo over Cook County’s controversial sweetened beverage tax, retailers trotted out numbers to back up their demand to repeal the tax.
Joseph Butera, owner of the supermarket chain bearing his family’s name, said ever since the soft drink tax went into effect, beverage sales have dropped.
“At our store in Norridge, for example, our beverage sales are down 47 percent,” he said.
Illinois Food Retailers Association President Brian Jordan said stores like Leamington Foods in the Lawndale neighborhood have seen customers leave to shop elsewhere, because of the tax.
The local retailers report that more than 4 in 10 local stores have seen a drop in beverage sales of at least 30%. And it’s affecting overall sales traffic as well. The common sense explanation as expressed by some of the owners is that nobody is going to go all the way out of the county just for soda and then return to buy the rest of their groceries from them. If you’re making the trip anyway you’ll buy almost all your groceries in a place where the taxes on everything are lower. And with gas prices way down from a couple of years ago, it’s more practical to do so.
This has been tried more times than I can count now. They’ve passed these massive sin taxes on soda and other sweetened beverages in New York City, Philadelphia, Los Angeles, Berkeley and beyond. And the result is pretty much uniform. People don’t drink appreciably less soda. They just drive a bit further to buy it. And back home, stores begin bleeding revenue and jobs are lost. The predicted windfall for the city or county coffers never comes anywhere near the amounts being promised and consumers are given one more reason to distrust and dislike their local government.
There is a proposal to repeal the tax currently under consideration by the county board. Unfortunately, they would need eleven votes to override the predicted veto by Board President Toni Preckwinkle and there are simply too many Democrats running the show.
Well played, Cook County. You’ve really latched into a winner here. If only someone had warned you…