New Chicago tax on bags will yield revenue, but maybe not environmental benefits

By Taryn Phaneuf | Nov 28, 2016

CHICAGO — The city of Chicago will begin charging people next year a tax for each bag they use to haul groceries and other items purchased at retailers in the city. But while the tax will produce income for the city, it remains to be seen how much the tax will actually do to reduce the number of plastic bags Chicagoans use - a major selling point for such taxes in Chicago and other locales.

Mayor Rahm Emanuel’s $8.2 billion budget passed with unanimous support of the Chicago City Council on Nov. 16, including a tax on consumers for paper and plastic bags.

The 7-cent bag tax on plastic and paper bags at the grocery store — or at any Chicago store without reusable bags — follows efforts around the country to change consumer behavior and reduce waste and harmful environmental impact. Consumers can avoid paying the tax by bringing their own reusable bags, thereby keeping plastic and paper substitutes out of landfills.

At the same time, retailers receive 2 cents every time the tax is levied and the rest goes to the city. The average Chicago resident uses 500 plastic bags a year, totaling 1.3 billion for the whole city, according to environmental experts.

The tax reverses a partial ban that went into effect more than a year ago. The ban required large retailers to replace thin plastic bags with thicker ones that are designed to be reused. But consumers weren’t reusing the bags, which are more expensive to make.

But some policy experts aren’t convinced the new measure will be any more effective than the last one.

Kevin Glass, policy director for the Franklin Center for Government and Public Integrity, told the Cook County Record that assessments of plastic bag taxes in other cities have shown they may not have the environmental impact public officials hope for.

“I have no doubt that they’re put forward with good intentions, but, you know, the numbers show that they’re largely ineffective on the environmental aspect of their justification,” Glass said, citing a Washington Post review of the Washington, D.C.’s 5-cent tax heralded as a way to clean up the Anacostia River. The review found that more of the money put in the Anacostia River Clean Up and Protection Fund was used for school field trips and worker salaries than for cleanup projects on the river.

Additionally, taxes that have been put in place on various levels in states like California, Texas and Virginia, among others, haven’t proven to change consumer behavior, Glass said. Another unexpected downside could be the reusable bags encouraged as substitutes, which public health experts have said could pose a risk because of the germs they carry.

Tax rates vary among those who have put them in place. Washington, D.C., charges less than the new rate in Chicago, but some charge much more. Some, like the Better Government Association, have publicly criticized the few cents the city of Chicago settled on because it’s unlikely to actually deter shoppers from using plastic bags, making the tax just another revenue stream for the city. The city expects to bring in $12.9 million from the tax next year.

Glass said he thinks the mayor’s intentions are genuine, but he said the few cents per bag will add up for low-income shoppers, who may be disproportionately affected by the charge. He said he believes neither a ban nor a tax has enough of an upside to be worthwhile.

“It’s a surprisingly complicated issue, but the downsides, I think, across the board, really outweigh the upsides,” Glass said. “This is an evolution of what Chicago has been trying to do. And they’ve obviously failed multiple times before at what they’re aiming for. I just worry that they’re going to try over and over again to restructure or reorient how they’re either taxing or prohibiting bags and none of it’s going to see the upside they’re really searching for.”

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City of Chicago Franklin Center for Government and Public Integrity

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