Tuesday, January 12, 2010

Another Defeat for California's Alcohol Fee

Mercury News

A South Bay lawmaker's plan to chase every alcoholic drink served in California with a 10-cent fee was officially put on ice Tuesday, failing for the second time in a year to win support from his colleagues.

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 amid an all-out push from alcohol industry groups, the Assembly Health Committee, just as it did last April, crushed the proposal like an empty beer can.

Only five of 19 members voted in support this time. Six members, mostly Democrats, chose not to vote at all, and one was absent. That was better than last year, when only three members signed off and some didn't even show up for the hearing, but far short of the 10 needed to advance from the committee.

The vote marked another defeat on alcohol levies for Beall, who also proposed a steep beer tax hike in 2008. Sounding like a bar brawler, the lawmaker has vowed to get up and take yet another swing.

"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."

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 dead on arrival in the Legislature.

And 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.

Not that supporters of the doomed bill didn't try hard to make their case this week. Led by the Marin Institute, an alcohol industry watchdog, advocates from labor, religious and health groups stalked the Capitol on Tuesday in hopes of drumming up support.

They also rallied outside the building before Tuesday's vote — with some 100-plus people wearing red hats saying "Charge for Harm" — and they jammed the hearing room before the vote.

"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 some $38 billion a year, from lost wages, hospital costs, counseling expenses such as alcoholics anonymous and prison costs — a number seized on by supporters of Beall's bill.

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.

It argued 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, however, 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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