Gulp! Chicago imposes tax on bottled water
Chicago's new and unprecedented 5-cent tax on each container of bottled water sold in the city appears destined for a legal fight.
The Chicago City Council on Tuesday approved what is believed to be the nation's first special tax on bottled water. Effective Jan. 1, each container will be taxed a flat 5 cents; a six-pack of water bottles would carry an additional 30 cents, and so on. The measure was approved as part of a much larger package of tax-and-fee increases that is supposed to balance the 2008 city budget.
Opponents are "strongly moving toward" filing a lawsuit and are considering several potential legal arguments, said Nicole Julal, staff attorney for the Illinois Retail Merchants Association, which joined other state and national commercial groups in lobbying against the bottled-water tax.
She said it is unfair to tax bottled water and not other drinks, such as juice and soda, that also are sold in plastic containers. Also in question is whether Chicago can levy an additional sales tax on grocery items, Julal said.
"We believe that Illinois statutes pre-empt certain home-rule powers, and that casts certain doubts on the city of Chicago imposing this tax," she said.
Sponsoring Ald. George Cardenas, who first proposed an even bigger tax of 25 cents per bottle, has said the tax would steer people to the city's excellent and cheap Lake Michigan water supply while reducing plastic waste that goes into landfills. But even environmentalists note that the $10.5 million in estimated new tax revenue from the bottled-water tax is destined for the city's corporate fund, rather being earmarked for an ecological purpose such as recycling. Some of them still see it as a positive, though.
"I think it's great that people are starting to make the connection between bottled water and an unnecessary item," Elizabeth Martin-Craig, Chicago field organizer for Corporate Accountability International.
The Chicago tax comes at a bad time for the bottled water industry. Other municipal governments, such as those in San Francisco and Boston, have ordered or encouraged departments to stop spending money on bottled water.
Joe Doss, president and CEO of the International Bottled Water Association in Alexandria, Va., said local governments should not be pitting store-bought water against tap-water supplies. He said most bottled-water consumers drink tap water, too, but opt for packaged product in certain circumstances.
Banning or criticizing bottled water "would discourage consumers from drinking a healthy product," Doss said. "They may turn to less healthy alternatives. They may not stay as well-hydrated."
He said the industry promotes recycling and has turned to lighter plastics to reduce the amount of packaging.
Environmental advocates argue that tap water has higher safety standards to meet and is thus better for consumers. Chicago is among seven cities targeted in a national campaign to get local governments to end their bottled water contracts and encourage the general public to drink tap water, said Martin-Craig, the field organizer for Corporate Accountability International.
The Chicago Sun-Times reported Friday that the city will begin a public-awareness campaign early next year to get residents to switch to tap water. The city will give away or sell special stainless-steel drinking canisters, which could generate additional water revenue, the paper said.
About 56 percent of bottled water came from spring or ground-water supplies in 2006, Doss, the industry representative said, citing statistics from the Beverage Marketing Corp. The balance of product comes from public water sources but is purified further, he said.
Mike Ramsey can be reached at (312) 857-2323 or ghns-ramsey@sbcglobal.net. <mailto:ghns-ramsey@sbcglobal.net.>
DROPS IN THE BUCKET: 2006 WATER STATISTICS
*8.2 billion gallons - the total consumption of bottled water in the U.S.
*270 million gallons - consumption level in Illinois, which ranks seventh in the nation.
*$11 billion - sales in the U.S. (wholesale)
*27.6 gallons - per capita consumption in the U.S.
*21.1 gallons - per capita consumption in Illinois.
(Source: International Bottled Water Association, citing Beverage Marketing Corp.)