Groundbreaking Bottled Water Tax Raises Dustup in Chicago
In 2007, the image of bottled water in the public consciousness underwent a huge shift. What had been largely seen as a healthy lifestyle choice had, in just a matter of months, become recognized by many consumers as an eco-sin. (Click here for a Green Options post detailing the ways bottled water is costly, wasteful, and bad for public health.) Now, a controversial new eco-sin tax, the first of its kind, has shined an even bigger spotlight on the ubiquitous bottled water.
As the New Year begins, Chicagoans are getting some direct encouragement to forgo buying disposable bottled water and switch to reusable bottles filled with fresh, clean water from the tap. In November, Chicago became the first city in the U.S. to pass a tax on bottled water sold within the city limits. The 5 cents per bottle tax went into effect on Jan. 1, and is expected to raise $10.5 million for the city this year.
In addition to producing revenue that can be used to maintain the city’s water infrastructure, the tax is designed to encourage citizens to shift their hydration habits from bottled to tap water, which is essentially the same thing you get when you buy most bottled water brands. (Filtration with a charcoal filter such as Brita or Pur is a common step taken to remove any chlorine aftertaste, though it I think it tastes fine straight from the faucet.) The tax will also help reduce the number of the plastic containers that wind up in landfills (less than 20% of plastic water bottles in this country are ever recycled) and reduce the greenhouse gas and other pollution created by trucking all that water to retail sites.
Of course, the new tax is meeting some resistance from businesses with an interest in the wasteful status quo. In addition to news reports of grumbling from some consumers who are used to buying their water bottles by the case, the tax now faces a legal challenge from some industry trade groups. Yep, it turns out that a lot of the folks who profit from selling tap water are willing to sue to protect their share of this huge-margin business. Real shocker, right? Actually, the lawsuit isn’t really surprising when you consider the racket that bottled water has become. The fact is, consumers regularly pay more per ounce for bottled water than they do for gasoline—and it’s much easier to manufacture.
The city has responded to the suit by saying it is prepared to defend the tax in court. One argument that the suit makes is that the new tax is unfair because it doesn’t apply to other non-carbonated bottled beverages, such as milk, teas, coffees, and sports drinks. Chicago Law Department spokesman Jenny Hoyle responded by pointing out that, “unlike these other beverages, tap water is a generally available, safe alternative in the city of Chicago.” That’s a crucial difference, and one that makes intuitive sense. In other words, the taxing rules don’t need to be the same for Gatorade and water because the city isn’t already in the business of providing an alternative to Gatorade through its infrastructure. Essentially, the city is taxing consumers for the convenience of the bottle, because the same thing is available in every working faucet in town.
Time will tell if Chicago’s bottled water tax survives this legal challenge, but I sure hope it does. This kind of eco-sin tax seems like a smart way to spread the true economic costs to those who benefit from them. Sure, it’s convenient to buy a chilled bottle of water sometimes, and I’ll gladly pay a nickel extra for those times when I forget to bring my refillable bottle or it’s not immediately convenient to find tap water or I just really want an ice-cold bottle of Evian with my lunch. What’s good about this tax is that it creates a concrete financial incentive to switch your everyday, habitual water consumption to the sustainable model of refillable bottles rather than throwaway plastics. It gets people to take another look at that plastic bottle and assess the relative merits of its convenience versus the real economic price of its disposability.
My guess is that the bottled water tax will be upheld and that after a few months of trying to get around the tax by driving outside the city limits to buy in bulk, many consumers here in Chicago will just make the switch to refillable bottles. In a year, the tax will go unnoticed by most people, just like the most people have no idea how much taxes increase the price of cigarettes. If other communities follow suit with their own bottled water taxes (and it seems this may be a trend), they’ll probably be smart to charge 10 cents a bottle and really send a strong signal that provides the most revenue buck for the taxation bang.
A related side effect of Chicago’s tax on bottled water that I like is that it makes you take a second look at those often-neglected public water fountains (or “bubblers” as we used to call them growing up in Wisconsin). In the light of a law that says essentially, “Hey, you can get this item for free if you just walk over to the faucet,” water fountains don’t appear to be quite such outdated relics of another era. In fact, these underappreciated appliances that tend to remind many of us of elementary school start to take on a more noble appearance as a valued civic service, dispensing life-giving nourishment, free for the asking. In a world in which water resources are becoming more valuable every year, maybe the once-ubiquitous bubbler will make a comback rather than going the way of the all-but-extinct public telephone booth.
Photo credit: Keetsa