Alcoholism & Addiction

Lawmaker’s Proposed Alcohol Tax Shot Down Again

A California lawmaker’s plan to charge a 10-cent fee for every drink served in California was officially shot down Tuesday, failing for the second time in a year to win support from his colleagues.

Denis C. Theriault of the San Jose Mercury News writes that the charge, sought by Assemblyman Jim Beall, D-San Jose, would have raised $1.44 billion a year to help pay for some of the billions in criminal justice and public health costs associated with alcohol abuse.

But the Assembly Health Committee crushed the proposal, just as it did last April. Only five of 19 members voted in support this time. Six members, mostly Democrats, chose not to vote at all, and one was absent. Last year, only three members signed off and some didn’t even show up for the hearing.

The vote marked another defeat on alcohol levies for Beall, who also proposed a steep beer tax hike in 2008. "They’ve given me a bloody nose," Beall said after the vote. "But I’m going to wipe it off and come back in a few weeks with something different." Next time, he said, any proposed fee may be "more modest."

Theriault writes that alcohol taxes and fees have traditionally faced a tough road in California, where beer and wine production are major industries and spend heavily on political campaigns.

The state’s excise tax was last raised in 1992 by a penny. A plan by Gov. Arnold Schwarzenegger to hike it by 5 cents a drink last year, to help close the state’s budget deficit, was shot down in Legislature.

Even if Beall’s bill had made it past the Health Committee, it likely faced even steeper odds in its next planned destination, the Governmental Organization Committee, the panel that actually oversees California’s alcohol industry.

Led by the Marin Institute, an alcohol industry watchdog, advocates from labor, religious, and health groups rallied outside the Capitol before and after the vote on Tuesday, with some 100 people wearing red hats that read “Charge for Harm.”

"When you cause a problem, you pay for it," Tom Renfree, of the County Alcohol and Drug Program Administrators’ Association of California, said during the rally. "We’re not going to stand aside and watch people be destroyed."

The Marin Institute estimates that alcohol abuse costs California about $38 billion a year, from lost wages, hospital costs, counseling expenses, and prison costs.

The state Department of Alcohol and Drug Programs estimates the annual cost of alcohol abuse at $22.5 billion.
But the American Beverage Institute, an alcohol industry lobbying group, offered its own statistics Tuesday, arguing that more than half of the cost of a typical bottle of spirits already goes to the state and federal governments and that new fees—as much as $1 for an average bottle of wine—would be an undue burden on the industry, costing about 38,000 jobs.

"The hospitality industry is already paying its fair share," the institute’s managing director, Sarah Longwell, said in a statement.

Beall disagreed and cited surveys showing widespread public support for increasing levies on alcohol. A Public Policy Institute of California poll found 85 percent of respondents supported the governor’s tax plan last year.

"The Legislature and the alcohol industry," Beall said, "need to sober up."

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