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Bottled water tax take falls far short 6/19/2008 9:32:00 AM
By Fran Spielman
-Chicago Sun-Times
Revenues from Chicago's new bottled water tax are continuing to trickle in -- at less than half of city projections -- despite claims that consumption would rise during warm-weather months.
City Hall predicted a summer surge after the Chicago Sun-Times reported that the first month of collections from the nickel-a-container tax had fallen far short of the city's projections.
Instead, the problem has gotten worse, exacerbating a budget crunch that has already prompted Mayor Daley to order $20 million in mid-year spending cuts and warn of a second round of cuts.
For the first five months of this year, the city collected slightly more than $2 million from the bottled water tax, including $606,286 in April and $472,838 in May.
At that rate, annual collections would be $4.8 million. That's less than 46 percent of the $10.5 million projection included in Daley's tax-laden 2008 budget.
David Vite, president of the Illinois Retail Merchants Association, responded by essentially saying, "I told you so."
Vite predicted the tax would fall far short as Chicagoans fled to the suburbs to buy cases of bottled water, along with the rest of their groceries.
"Single-bottle sales have not been dramatically hurt. It's the bulk purchase, the six-pack and the case that has just been killed. There's no reason someone is gonna pay $1.20 extra for a $4 dollar case of water when they can go to the suburbs to buy it without that," Vite said.
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