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Five Oregon state lawmakers want to impose a hefty tax on beer and have introduced a bill that brewers say would cripple them.
The new bill would impose a $49.61 tax on each barrel of beer produced by Oregon brewers. The tax would raise revenue for the state at a time when budgets are running in the red.
Specifically, the bill says it would fund prevention, treatment and recovery programs for those addicted to alcohol and other substances.
The bill's language defends the tax by arguing alcoholism and "untreated substance abuse" costs the state $4.15 billion in lost earnings as well as more than $8 million for health care and nearly $1 billion in law enforcement-related expenditures.
Oregon ranks 49th among states in its malt beverage taxation rate, which has not been raised in 32 years.
Brewers say Oregon's low beverage taxation rate is what makes the state such an attractive place for crafting beers. The state's brewery guild claims it would also amount to the single largest beer tax hike in the nation's history.
Laurelwood Public House & Brewing Co. owner Mike De Kalb said the tax may sound like a good idea in this economic climate, but he believes it would cost jobs and not raise enough new tax revenue to justify the increase. "We're a family-owned, local Portland business. We don't want to see something cost taxpayers more than the revenue it would bring in," De Kalb said.
De Kalb said Oregon would potentially lose its prominence as a craft-brew destination and that some small breweries could potentially go out of business. He said Laurelwood could possibly face job cuts as well.
Prior versions of the beer tax bill have exempted small breweries but this one does not, he added. "If that tax is passed it would mean consumers would pay $315 million more in 2009 to buy the same amount of beer they bought in 2008," De Kalb claimed. "A pint of beer would go from $4.50 to $6."
Rep. Ben Cannon, one of the bill's sponsors, questions whether the true hit to consumers would be as high as beer makers claim. -He told says his office measured the increase at 15 cents per glass not $1.50.
But Kurt Widmer of Widmer brewing says that in order to keep profit margins constant, he'd increase his price to distributors, who in turn would likely increase prices to retailers, making the 15 cent per class estimate unrealistic.