Chicago to Tax Water Bottles

From the Chicago Tribune, December 24th, 2007:

Chicago is set to impose a 5-cent tax on bottled water on Jan. 1, becoming the first major U.S. city to demand such a surcharge. The move -- which officials predict will secure an extra $10.5 million annually -- will help the city plug a budget hole by building on the growing disdain for environmentally suspect bottles.

In the last year, the tide has turned on bottled water, once admired as a healthy alternative to soft drinks. Now, as environmentalists take aim at the clear plastic bottles, politicians can take their own potshots.

Critics of the tax warn it could create a black market for water and spur consumers to shop in neighboring towns where a case of water will cost significantly less. While convenience store or vending machine water may only increase from $1.25 to $1.30 per bottle, the average cost of a 24-pack will go from $3.99 to $5.19, a 30 percent hike.

With 90 percent of bottled water sales consisting of cases sold at supermarkets, retail experts predict the tax will hurt local grocers as customers go outside the city to save money on water. The bottled water industry expects a 50 percent drop in Chicago sales, putting a dent in anticipated revenue from the tax...

Businesses in neighboring communities are preparing themselves for the border crossings...In an effort to promote city tap water -- which consistently earns high marks for its taste and cleanliness -- city officials acknowledge they want to curb the bottled variety's use. Illinois residents consumed 270 million gallons of bottled water in 2005, making it the seventh-biggest bottled water consumer in the United States, according to New York-based Beverage Marketing.

Consumers can avoid the tax by purchasing enhanced or sparkling water such as Perrier, Water Joe, Smart Water or Vitamin Water. The additives, supplements or carbonation in those beverages differentiate themselves enough from kitchen sink variety to evade the surcharge, according to the new law.

"It has to be like tap water [to be subjected to the tax] because that's the alterative you have to plain bottled water," said Ed Walsh, spokesman for the city's Revenue Department. "You can't go to the tap and get flavored water or enhanced water."

Once touted as the gateway to a healthier lifestyle, bottled water has quickly transformed into a symbol of American wastefulness. U.S. sales of bottled water topped 11.9 billion in 2006, a 10 percent increase over the previous year.

Americans drink more bottled water than any other beverage with the exception of carbonated soft drinks, according to the International Bottled Water Association. To meet the demand, the Earth Policy Institute estimates manufacturers use more than 17 million barrels of oil -- enough fuel to run 1 million U.S. cars for a full year -- in making polyethylene terephthalate plastic bottles.

Only 23 percent of those bottles, however, are recycled, according to the Container Recycling Institute. The rest are tossed in to landfills, many of which already grapple with space shortages.

As bottled water consumption nearly doubled over the past five years, conservationists launched an aggressive campaign against the industry..."Bottled water is an easy way to get people involved in protecting the environment," said local activist Rachael Albers, a Lakeview resident who has worked to get bottled water banned from social functions at her church. "Not everyone can buy a Prius or hybrid car. But everyone can stop drinking bottled water."

I always enjoy reading the comments section of articles regarding environmental laws that will impact people's lives in some way. For the most part, the Chicagoans' comments are nuanced and thought-provoking, such as this one from Scott Free: "Recycling" plastic water bottles does not turn them into new plastic water bottles; it turns them into a lower grade of plastic that's used for things like replacing wood in outdoor furniture. New water bottles are still made of petroleum, and all the plastic that went into your water bottle is still there in the environment, waiting for its ultimate disposal. This may take hundreds of thousands of years, until nature evolves a bacterium capable of digesting plastic. Bottom line: recycling these things is a feel-good activity that does little to reduce trash in the environment and nothing to reduce our consumption of oil.

In the end, the tax is likely to be worse for the environment, as people burn more gasoline and emit more pollution driving to the 'burbs to stock up. Of course, it's not about the environment; it's about money. As is everything in Chicago.

Many of the comments bring up the interesting issue of driving out of your way to save a few cents on gas or a product at a store. Are you ultimately saving any money? I guess you'd have to do the math of how much you save on a gallon x the number of gallons/ how many miles you can go on a gallon and compare it to the number of extra miles you have to drive. Just something to think about!