LOOP — Cook County's "pop tax" — which had been set to add a penny per ounce to the cost of sweetened drinks — will remain blocked until at least Friday, a Cook County judge has ruled.
Judge Daniel Kubasiak, who blocked the tax from going into effect July 1, asked sharp questions of both sides about whether the tax should be allowed to take effect. He said he will rule on the county's request to allow the tax to go into effect at 1:30 p.m. on July 28.
Much of the hearing at the Daley Center revolved around the fact that sweetened drinks sold in a bottle are taxed, while sweetened drinks prepared to order are not.
David Ruskin, attorney for the Illinois Retail Merchants Association, said it violated the law to tax a Starbucks Frappucino sold at a convenience store, but not one prepared by a barista at a Starbucks store.
"If the goal is to reduce obesity, then these drinks should be treated the same," Ruskin said.
However, attorney Kent Ray, who represented the county, said the ordinance imposing the tax was written that way to simplify transactions and ease the burden on businesses. In addition, "ready-made" drinks have a bigger impact on the health of county residents because they are cheaper and more widely available.
Ray argued that the county's sweetened beverage tax was no different than Chicago's bottled water tax, which was imposed in an effort to keep plastic bottles from polluting the environment. The tax does not apply to carbonated water or mineral water.
Kubasiak questioned whether it would be appropriate for the government to "regulate the salt in french fries" or the fat in hamburgers."
Ray responded that the sweetened beverage tax was appropriate.
Kubasiak said he understood that other courts — including in Pennsylvania and California — have ruled that such taxes are legal but the question never has been decided in Illinois.
Ruskin said the tax would be impossible to properly levy because it also applies to self-serve drinks, like Slurpees. Since the customer decides how much sweetened drink to dispense — and whether to take advantage of an offer for a free refill, the retailer could be in legal jeopardy for not levying the proper amount of tax.
However, Ray said businesses could just levy the tax on the maximum amount of fluid the cups they sell are able to contain to be sure to comply with the tax.
Ruskin also argued that the tax would be difficult to comply with because the law requires retailers to pass along the tax to customers. That could pose a problem for stores that accept the Supplemental Nutrition Assistance Program, Ruskin said. Drinks bought with those benefits can't be slapped with the additional tax, as it violates federal law.
Ray said retailers would be able to figure out how to handle those purchases, since similar issues come up on some food purchases.
"The regulations are so confusing as to be unconstitutional," Ruskin said.
Kubasiak asked officials on both sides of the issue to be patient as he considers the issue, saying it was fraught with "difficultly."
While the legal wrangling continues, county officials have been scrambling to make up for the $68 million the tax was expected to bring in through the end of 2017 and the $200 million it was expected to bring in next year.
Cook County Commissioner Richard Boykin said he expected Kubasiak to uphold the temporary order keeping the tax from going into effect.
Boykin repeated his claim that Cook County Board President Toni Preckwinkle has used the judge's order stopping the tax to create a "manufactured crisis," and said she was being "dishonest" that the tax was designed to help Cook County residents make healthier decisions and ease the burden on the county health system, which is strained by the number of residents suffering from diabetes.
"This is a good day for taxpayers," said Boykin, who said county officials could eliminate vacant positions to fill the budget gap.