Illinois Lawmakers Eye $600 Million Tax on Sugary Drinks

Published February 20, 2014

In Illinois it’s called everything from pop to soda to sodi, but the state’s Democrats are now calling soda pop a moneymaker.

State Sen. Mattie Hunter (D-Chicago) on Wednesday laid out a plan to add a penny-per-ounce tax to soda along with a handful of other sugary drinks.

Hunter justifies the proposed tax by saying kids (and adults) are getting chubby, and it costs a lot to treat people who get sick from weighing too much.

“This is one of the most progressive initiatives I have ever had the opportunity to sponsor,” Hunter said. “People will pay a little more, but that is just to offset the burden those beverages [cause] in terms of health and health care costs here in Illinois.”

$600 Million Tax Hike

Hunter and other state lawmakers know a penny-per-ounce tax on soda, which amounts to $3 a case or 67 cents per two-liter bottle, could raise a lot of money. That cash would supplement the $13 billion Illinois now spends on Medicaid.

“This legislation is projected to produce over $600 million each year for prevention, wellness, and Medicaid services in this state,” state Rep. Robyn Gabel (D-Evanston} said.

Illinois’ vast bureaucracy of public health groups and advocates are also jumping at the chance to get some new money.

“The monies and the revenue coming to local health departments for health education is greatly needed,” said Tom Hughes, executive director of the Illinois Public Health Association.

Not everyone is on board. Illinois’ business groups are chief among the opponents.

‘Failed Strategy for Reducing Obesity’

“Illinois taxpayers are tired of politicians raising taxes,” said Mark Denzler, vice president and chief operating officer of the Illinois Manufacturers’ Association. “More importantly, [the soda tax] is a failed strategy for reducing obesity.”

State Sen. Dave Syverson (R-Rockford) said no one who looks at this tax can believe it’s about making people healthy or fighting obesity.

“It’s clearly just another way to tax Illinois residents,” Syverson said. “It’s not going to have any impact on health outcomes. If they want to change health outcomes, they should deal with all of the foods and drinks.”

Syverson said Illinois should look at trimming the state’s Medicaid rolls before taxing anyone to spend more.

“There is more than enough waste, and we can save money if they were willing to take the fraud out of the system,” Syverson said.

Illinois has added 168,000 people to Medicaid since Jan. 1 due in large part to Obamacare. Syverson and other Republicans worry the state’s Medicaid rolls will swell from last year’s 2.7 million to 3 million by the end of the year.

The soda tax plan has yet to get a hearing in the statehouse.