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Chicago's county plugs budget hole from repealed soda tax
November 21, 2017 / 10:41 PM / 24 days ago

Chicago's county plugs budget hole from repealed soda tax

CHICAGO, Nov 21 (Reuters) - Illinois’ Cook County, which includes Chicago, will fill a budget gap caused by last month’s repeal of a sugary drink tax through hundreds of layoffs and other measures, under a $5.2 billion fiscal 2018 spending plan approved by county commissioners on Tuesday.

The county faced intense opposition from beverage companies, retailers and residents to a penny-per-ounce tax on soda, sports and energy drinks and other beverages, which took effect in August.

Action by the county board to terminate the tax beginning Dec. 1 left the budget proposed by Board President Toni Preckwinkle more than $200.6 million short on revenue.

To balance the budget, the board voted to lay off 321 workers and eliminate more than 1,000 currently vacant positions, while also counting on revenue growth and increased tax collections.

“We have had to make exceedingly difficult but necessary choices, but we have met our fiscal obligation to the people of Cook County,” Preckwinkle said in a statement, adding that the budget protects “key public health and public safety services.”

In October, Moody’s Investors Service, which rates Cook County A2 with a stable outlook, called the tax repeal a credit negative “because the county loses revenue and it reflects practical constraints on revenue raising.”

The American Beverage Association, which represents soda manufacturers, has said the county’s decision to end the tax signaled a momentum shift against taxing soda consumers.

Reporting by Karen Pierog; Editing by Matthew Lewis

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