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Chicago Coalition Against Beverage Taxes Rallies to Oppose Proposed Regressive Beverage Tax at City Hall

Legal opinion concludes city of Chicago doesn’t have authority to impose tax

CHICAGO—The Chicago Coalition Against Beverage Taxes was joined by beverage industry employees, business organizations, small business owners and hundreds of other industry supporters at City Hall to rally in opposition to Alderman George Cardenas’ proposed discriminatory beverage tax, which proposes a new, penny-per-ounce tax on syrup, powders, canned and bottled drinks, including juices, teas and sodas. The proposed regressive tax would be the third beverage tax on Chicagoans, raising the prices of hundreds of common grocery store items for working families and destroying local jobs.

“Let’s work together to find real solutions that address the Chicago’s public health challenges while ensuring that important industries in the city – and the families they support – are not stunted by this regressive and ineffective tax,” said Jim Soreng, executive director of the Illinois Beverage Association.

A recently commissioned legal opinion issued by Mara Georges, the city of Chicago’s former corporation counsel, concluded the city does not have the statutory authority to raise taxes as proposed in the ordinance.

“Following my legal analysis of the proposed beverage tax, I’ve found the proposed ordinance fails to fall squarely within any of the exceptions to the General Assembly’s ban on soft drink taxes and the proposed ordinance lacks statutory authority, exceeds the City’s home rule powers, and is likely to be held invalid should it be legally challenged,” wrote Mara Georges, of Daley & Georges, Ltd., in a legal opinion commissioned by the American Beverage Association.

Beyond the regressive nature of the proposal and the shaky legal ground on which it stands, it could severely hurt local economic growth and job creation. The non-alcoholic beverage industry has a significant impact 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. That’s a direct economic impact of $5.2 billion.

“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.”

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 whom will be hurt by this discriminatory tax.

“As President and CEO of the largest association of Hispanic business owners in Illinois and the Midwest, we represent thousands of Hispanic business owners who employ more than 50,000 Chicago residents,” said Omar Duque, president and CEO of the Illinois Hispanic Chamber of Commerce. “The regressive beverage tax being proposed by the Chicago City Council will hit many of these minority-owned businesses and their hard-working employees right where it hurts – their bottom lines. 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.”

“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 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,” said Sam Toia, president & CEO of the Illinois Restaurant Association and coalition member.

The Chicago Coalition Against Beverage Taxes is asking aldermen to stand up for Chicago families and businesses by opposing the new discriminatory tax.

“There are 1,400 union employees in Chicago whose livelihoods are directly or indirectly dependent upon the non-alcoholic beverage industry. 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,” said John Coli, president of Teamsters Joint Council 25 and honorary co-chairman of the Chicago Coalition Against Beverage Taxes. “Our union stands strongly opposed to this hurtful tax.”

“The non-alcoholic beverage industry is vital to the economic growth and prosperity of Roseland,” said Andrea Reed, Executive Director of the Greater Roseland Chamber of Commerce. “Let’s stand for Roseland, and neighborhoods like it all across Chicago, by saying no to another beverage tax.”

Taxes on beverages do not improve public health. 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.

Cities across America are recognizing that education – not taxes and regulation – is the meaningful solution to the complex challenge of obesity. Educating people about balance is key to helping change the behaviors that can lead to obesity.

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The Chicago Coalition Against Beverage Taxes is a group of concerned citizens, families, businesses and community organizations who want to send a strong message to our elected officials that we reject any discriminatory tax proposals on common grocery items like beverages.  For more information, please visit:  www.noillinoisbeveragetax.com

 

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