New Chicago tax leaves shoppers holding the bag

The classic checkout question — paper or plastic — will soon pose a new dilemma for cost-conscious Chicago shoppers, who face a new tax on either choice.

Beginning Jan. 1, a checkout tax of 7 cents per bag will be added at all Chicago retailers — from massive chain stores to mom-and-pops — in the city's latest bid to curb disposable bag use.

Chicago is following the lead of several other cities in adopting the checkout tax, which has shown promise in reducing consumers' appetite for the formerly free store-supplied bags. Americans use more than 100 billion disposable plastic bags each year. Most end up in landfills, with some invariably littering the landscape in highly visible ways.

While the city and retailers gear up to administer the new tax, consumers need to get ready to bring their own bags or foot the bill. Either way, experts expect disposable bag use will drop significantly come January.

"The disposable bag taxes are incredibly effective," said Tatiana Homonoff, an assistant professor of economics and public service at New York University. "It's a low economic burden, but a big environmental and behavioral shift."

A similar tax in suburban Washington, D.C., cut the likelihood of a customer using a disposable bag in half within the first two months, Homonoff said.

Under the new tax, unanimously approved this month, the city will keep 5 cents per bag, while the retailer will keep 2 cents — essentially the cost of a plastic bag. The charge will show up on store receipts, right next to other municipal sales tax items such as the Chicago bottled water tax.

The tax does not apply to restaurants and families in the federal Supplemental Nutrition Assistance Program, often called food stamps.

The city projects the tax on disposable bags will generate $12.9 million in revenue next year — $3.7 million for retailers and $9.2 million for Chicago, which will flow into the operating budget. The long-term goal is not to create revenue, but to reduce the number of bags that end up in landfills, blow down the street and dangle from tree limbs, said Molly Poppe, Office of Budget and Management spokeswoman.

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