Bag tax plan would shield Chicago from paying into state budget

Capitol News

SPRINGFIELD, Ill. (WCIA) — Nearly three weeks after Governor J.B. Pritzker signaled support for a statewide tax on plastic bags, business groups and environmental advocates are digging in for a tug of war at the checkout lane.

A Senate plan backed by the Illinois Retail Merchants Association would charge Illinois consumers seven cents per bag at the grocery store. The tax would apply to all single-use bags at retail locations, including plastic, paper, and biodegradable bags. Under the current version filed by state Senator Terry Link, a Waukegan Democrat, the state would collect five cents and the store or the plastic bag manufacturer could pocket the rest.

“I don’t want to see money going to bag manufacturers, because the whole point of this is that they will be selling fewer bags,” said Jen Walling, the Executive Director of the Illinois Environmental Council.

Rob Karr, President of the Illinois Retail Merchants Association, says stores would not profit on the two-cent kickback “because there is additional carrying cost with the retailers,” he said. “You also have the administration fee for the funds, because the retailer is the one that is ultimately collecting and distributing that fund back to the state. They’re not making money on that deal. They’re not making money in the city of Chicago. They wouldn’t make it here.”

Chicago approved a seven-cent tax on plastic bags that went into effect in early 2017. Under Link’s proposal, cities like Chicago, Oak Park and Evanston, that already enacted a bag tax, would remain exempt from any new state bag fees, and would not have to pay any portion of the current city tax to the state’s General Revenue Fund, essentially forfeiting the state’s potential to collect tax revenue from roughly a quarter of the state’s consumers.

“That’s bullsh*t,” Senator Chapin Rose responded. The Mahomet Republican called the plan “typical for the Democrats.”

“Exempt Chicago and let everyone else pay,” Rose said sarcastically. “Why not when you have supermajorities like this? Make downstate and the suburbs pay so Chicago can take their skim off the top.”

“We are not saying that we are happy about a plastic bag tax,” Karr said, “but if you’re going to do it, this is the way to do it. And it’s modeled after the city of Chicago.”

Link’s plan, which easily cleared a Senate committee hurdle last week, would only generate somewhere between six and $12 million in new state revenue according to budget analysts at the Center of Forecasting and Government Accountability. Pritzker’s budget proposal banks on a range of $19 to $23 million.

Link’s measure would funnel three cents per bag back to the county where the transaction happened to assist with local government efforts to collect, recycle, and dispose of plastic and other hazardous waste.

A competing plan in the House, proposed by Representative Ann Williams, a Chicago Democrat, would charge a higher tax at the checkout lane, cut plastic bag manufacturers out of the revenue picture, and steer more money to environmental research and community clean up efforts.

“It’s a $.10 fee on plastic bags,” Walling explained. “What is important to us: two cents go to the retailers, eight cents go to other environmental programs, including county level environmental programs throughout Illinois. We think it is really important that this money be directed towards cleaning up environmental issues.”

Karr, whose group of restaurants and retailers got steamrolled in Pritzker’s recent move to raise the state’s minimum wage up to $15 per hour, is seeking leverage in hopes to secure a more favorable outcome for his members, which may include protections against future regulations.

“You might have a couple of municipalities that regulate to-go containers for restaurants, a couple that regulate or ban straws, or some that do a seven-cent plastic bag, or a $0.10 plastic bag, or go after all plastic wrap for example in some ways that we can’t even imagine yet,” he said.

Link’s bill, which is far more friendly to businesses than the House version, would also block local cities and towns from implementing future fines or bans on plastic straws, styrofoam, or other materials hazardous to the environment, a move that could frustrate environmentally conscious activists who have been successful at organizing local initiatives.

A statement from the governor’s office signals his public negotiating posture between the two House and Senate proposals may be nearly as pliable as a plastic bag itself.

“The administration is open to negotiating a bill that will protect the environment and raise revenue in a way that works best for the state of Illinois,” said Jordan Abudayyeh, a spokeswoman for Pritzker’s office.

“This plastic bag fee is not a revenue program, it is an environmental program,” Walling said, “So, this is a fee that is in place to reduce plastic bag usage, not to make money for the state.”

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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