Alcohol tax increase on the table

April 21, 2009 9:57:57 PM PDT
It could be called a tax or it could be called a fee, but either way it is likely to have a tough time finding votes in Sacramento.

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On Tuesday one legislator's plan to get some revenue from liquor sales stalled out in the Assembly Health Committee, but he is not done battling.

The dime tacked on to every alcoholic drink served or bought in a California restaurant, bar or store, would raise about $1.5 billion a year and help the state pay for treatment programs, DUI enforcement and hospitalization.

Author Assemblyman Jim Beall (D) of Silicon Valley, who is leading the drive, says booze fees were last raised in 1991 and need to keep up with the rising costs associated with alcohol abuse.

"It hasn't been raised since then. So guess what? Our property taxes, our sales taxes and our income taxes have picked up the slack, of the lack of increasing fees on alcohol," he said.

But the plan did not get enough votes to pass out of committee Tuesday, so Beall will try again next week to round up the remaining votes. He says because the money will go for a specific purpose, he is allowed to call the new charge a "fee," needing just a simple majority to pass and eliminating the need for Republican votes.

"All they're doing is a legal distinction, calling what's a tax, a fee, so they can avoid a two-thirds vote requirement on the floor of the legislature," said Assemblyman Chuck DeVore of Irvine.

"Tax" and "fee" arguments aside, research by an alcohol industry watchdog group found alcohol-related problems cost Californians more than $38 billion a year in injury, lost productivity, as well as taxpayer-funded welfare programs.

The Marin Institute says less than $1 billion is collected in alcohol fees.

"It's really important as a way to hold the alcohol industry accountable for all the harm alcohol causes in the state of California," said Michelle Simon, researcher with the Marin Institute.

Over at the MVP Sports Bar the extra dime per drink is unpopular. Not only would it cost more at the bars, but it would cost more at the store as well.

Jordan Hale and his roommates throw parties often. He typically buys four 30-packs on those weekends.

"And, if you add up 30, 60, 90... 120 beers at 10 cents a shot? That's a lot of money," he said.

California's signature wine industry is also worried. Some feel that 300,000 jobs will be at stake if the fee on a gallon of wine jumps from 20-cents to nearly $3.00 at the wholesale level. That would in turn be passed on to consumers.

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