By Sam Brunson
Today and tomorrow are 7-Eleven’s annual Bring Your Own Cup Day. In case you’re not familiar with it (or your Facebook feeds aren’t filled with bizarre containers of florescent sugar-ice), on #BYOCupDay, you can bring any container in your house to a 7-Eleven and, as long as it fits in the Slurpee machine, you can fill it up for $1.50.
After my wife and kids spent the day on the beach watching the Air and Water Show rehearsal, they were ready for some Slurpee. So, when I got out of work, we walked the three blocks to the nearest 7-Eleven. (Last year, we took berry-picking buckets; this year, we were much more modest and just brought cups my father-in-law bought when we took him to a Cubs game a couple years ago.)
When we got to the store, we were greeted by this sign:
In case the print is too small to read, the sign says: “Due to the Cook County Sweetened Beverage Tax, this 7-Eleven will be unable to participate in Bring Your Own Cup Day.
“For you, our valued customers, this location will be offering a Medium SLURPEE for ONLY $1!
“For any complaints related to the sweetened beverage tax, please contact Cook County at email@example.com.”
And what is this sweetened beverage tax that ruined my kids’ fun?[fn1]
In November 2016, the Cook County Board of Commissioners adopted an ordinance that would impose a $0.01 per ounce tax on any “sweetened beverage.” The ordinance defines sweetened beverage to include most nonalcoholic beverages that are sweetened, either with sugar[fn2] or noncaloric sweeteners.[fn3] There are a handful of exceptions, including infant formula, drinks that are more than half milk, 100% fruit juice, and certain custom-sweetened drinks.
The CCSBT was originally scheduled to go into effect in March, but the Illinois Retail Merchants Association sued, arguing the tax was unconstitutional and too vague. The law was temporarily enjoined but, on July 28, a judge dismissed the suit and lifted the temporary restraining order. The tax went into effect on August 2.
Subsequently, the Department of Agriculture objected to the county’s implementation, telling Cook County that it couldn’t charge the tax to SNAP beneficiaries. On Thursday, August 16, the Illinois Department of Revenue issued a regulation that exempted drinks purchased with SNAP from the beverage tax.
And what was the impetus behind the CCSBT? If you believe the two pages of “Whereas” clauses, it’s all about health. The ordinance’s whereas clauses lay out the health risks of sugar and noncaloric sweeteners, the rate of obesity, correlation between obesity and sweetened drinks, rates of consumption of sweetened drinks, and even the disproportionate rates at which these sugar-related diseases affect the poor and minorities.
The four corners of the ordinance notwithstanding, it’s not clear that fighting obesity and other health problems is the principal—much less the only—purpose behind the ordinance. The vote was close, with the commissioners tied. The Cook County Board President had to step in to cast the tie-breaking vote in favor of the CCSBT. She explained that she needed the $224 million the tax was projected to raise to balance the county’s books.
The tax has vociferous opponents, including not only retailers, but the right-leaning Illinois Policy Institute. I mostly engage with them on Twitter, where they’ve been retweeting a lot of people talking about how they’re going to buy their soda outside of Cook County, hurting retailers here. (For one thoroughly excellent such retweet, check this out.)
I’ll admit that I’m mostly skeptical of that argument; it may be true on the borders between Cook County and other counties, but I live in Chicago, and, given traffic here, it would take me not less than 30 minutes each way to get out of Cook County; I’d eat up way more money in gas and time than I’d save by getting my soda elsewhere. So that argument strikes me as unconvincing.
On the other hand, I’m troubled by the sin tax/revenue-raiser dichotomy here. If we’re really concerned about the health consequences of drinking sweetened beverages, we need to set the tax at a rate that will discourage people from buying the sweetened beverages (and there’s some early anecdotal evidence that sales are declining, though the groups reporting the anecdotes are industry groups that oppose the tax). Declining sales, in turn, mean declining tax revenue.
If, on the other hand, we’re counting on the tax for revenue (and it’s clear that we are), we don’t want sales to decline, which means we don’t actually care about the whereas clauses.
Confession: SALT sin taxes aren’t really my area, so I’m not going to try to say whether this is good or bad. What I will say, though, is we can’t afford to want the tax to both raise revenue and reduce consumption, because those two goals are at cross-purposes from each other. And I realize that most state and local governments that impose sin taxes want both outcomes; it will be interesting to see how Cook County does on this.[fn4]
Though, to be fair, the CCSBT caused me and my family to drink a lot less Slurpee than we might otherwise have had. (It’s also worth noting that the CCSBT was probably a financial boon for Chicago-area 7-Elevens. The one we went to was out of three of its five flavors, so people had been coming in. But instead of paying $1.50 for all they could drink (seriously, check out some of the containers people brought in), people paid $1 for a medium that usually costs $1.59 or so. In other words, the promotion got people in the door, but 7-Eleven was able to limit the amount any given customer bought. So, for Cook County 7-Elevens, win-win.)
[fn1] J/k: they each still got a medium Slurpee for $1—plus tax—and that’s about the size of the Cubs cups we brought, anyway.
[fn4] FTR, I’m mostly indifferent. My family and I drink water almost exclusively, notwithstanding our twice-a-year Slurpees (BYOCupDay and Free Slurpee Day, which, if that gets cancelled in Chicago, my kids will probably be inconsolable), and our occasional purchase of root beer or ginger ale. We drink so little, though, that the extra penny per ounce won’t affect our behavior.