E-Malt.com News article: USA: Beer tax to be raised in Oregon

Oregon’s beer tax increase idea resurfaces in Legislature, The Associated Press reported April 19. The idea of raising Oregon's beer tax – among the lowest in the nation, at 8 cents per gallon and unchanged since the 1970s – has been bandied around the state Capitol for years but never gained much ground amid unified industry opposition.

But lawmakers from both parties are casting about for money to dedicate to Oregon's depleted state highway patrol, and see the beer tax as a possible solution.

Several bills are on the table; some focus solely on the beer tax, others would include higher taxes on wine and ciders. Some proposals would dedicate all the money raised to state police; others split the funding between state police and programs to treat and prevent drug and alcohol abuse.

Negotiations about combining the proposals into a single bill are ongoing. At stake is how much to raise the tax, whether to phase in any increase and just how the money could be divvied up, lawmakers said Wednesday.

A staff member for state Sen. Bill Morrisette, D-Eugene, said raising the alcohol tax by 10 cents per drink would bring in $121.6 million – enough to set aside $24 million to hire 139 new state troopers, reinstituting 24/7 coverage of the state's highways, and leaving nearly $100 million for addiction prevention and treatment programs.

Most of the proposals contain some kind of exemption for the state's thriving microbrewery industry, but craft brewers said the exemptions were the equivalent of an empty promise: wholesale distributors and retailers would simply raise the price on their product, they said, pricing some customers out of the market.

Taxing beer, said Jamie Floyd, the co-owner and brewer for startup Ninkasi Brewing in Eugene, is unfairly singling out one industry, and forcing it to pay for a service used by all Oregonians.

"Nobody is here to tax marionberries. Nobody is here to tax gourmet coffee. Craft brewing is just as important to the identity of this great state." Floyd said. "Taxing beer will reduce the choices Oregonians have with respect to drinking high quality local products."

Brewers say their industry already operates on thin margins, and has had to cope with such as the rise in prices of stainless steel for brewing tanks and more expensive hops production.

Still, the beer tax is picking up some high-profile allies, including Democratic Gov. Ted Kulongoski, who sent a note of support to members of the House Revenue Committee after Wednesday's hearing. Kulongoski had proposed an auto insurance tax to fund state police, but that idea went nowhere, even among lawmakers of his own party.


20 April, 2007