More on beer & taxes & cash-strapped states

At the risk of sounding like Chicken Little, here's more talk on the topic of state governments in serious financial holes and looking at whose pockets they can raid without voter backlash ...

Pennsylvania beer writer Lew Bryson noticed in the Philadelphia Inquirer recently a letter to the editor urging the Keystone State to "substantially" boost taxes on beer, wine and liquor to help keep Pa.'s fiscal house in order.

The letter writer hails from a Philly 'burb, and we're going to assume that the individual is one of the everyday people, not someone with a temperance league calling behind his urging a bump in the sin tax in the name of salvation. (Worth noting: Goodman Lew didn't take the suggestion lying down and fired off a rebuttal to the Inky's opinion page.)

Anyway, here's where things lean toward scary: Joe Street-level urges his lawmakers to ramp up beer taxes, 'cause that product and its relatives deserve it. Lawmakers, with less than seaworthy vessels in choppy financial straits, may be inclined to listen to such mumbo-jumbo because it's not about the sales tax, nor income tax.

More scary: New Jersey's in stormy seas, and its vessel has a $2.8 billion gash in it right now, and that's just the current budget we're sailing under, never mind the one that has to be christened July 1 with an even keel.

Cap'n Corzine says we're taking on water and we're hard-pressed to find a port in this perfect storm, which includes an election year for the Garden State. Sales tax and income tax are historically hands-off territory anyway (barring that one sales tax hike Corzine bet his political career on in 2006), and they'll be doubly so in 2009. Though we haven't seen a beer tax hike pitched for the Garden State yet, that's no reason to think it's not on the table.

Reminder: The fiscal 2010 budget proposal goes public March 10th.

Summary: One of the engines that has conked out on the $$ New Jersey is the sales tax. Collection has sunk like a lead weight, our ship, like others, has been battered on the rocks of this recession (and ours was listing to begin with).

To repeat past posts: Think not of raising beer taxes, like Oregon has pitched and that fellow in Pa. who seems to think it's a capital idea. Instead, overhaul the regulations for brewers, meaning get behind them and help grow the industry, instead of standing in the way. Allow brewpubs to diversify their brewing, grant production brewers the same freedoms as wineries to sell retail. In short, raise revenue by having more brewers selling more beer, not by burdening the few, and ultimately us, the consumer, with higher prices.

Anger in Oregon; keep an eye on NJ

PubScout Kurt Epps points out this extortionate tax increase on brewers proposed by four Oregon state legislators.

The lawmakers want to tax Oregon brewers at about 50 bucks per barrel. It’s no secret that states are feeling mortally wounded by the recession. California’s treasury is practically collapsing under the weight of a $41 billion deficit and a Democrat-Republican tug of war that The Governator himself, Ah-nuld Schwarzenegger , is too weak to bust up.

Oregon has just about the lowest tax on beer going, making it a sunny place for brewers. In fact, it’s been three decades since there was increase in their malt beverage tax. Hence, those four lawmakers think they see some daylight here (and not surprising, brewers there say this will jack up the price of an Oregon pint by a third, from $4.50 to 6 bucks.)

But really the vile part of the lawmakers' selling point is they’re trying to wrap this proposal in some social do-goodism, bringing up alcoholism and substance abuse, and tabbing the tax to funding treatment programs.

That’s a load of shit for several reasons, one being the overall generalization and broad-brush blame saddled upon drinking beverages like beer, wine and spirits. (People in government and related agencies need to accept the idea that availability of the beverages is not the sole cause of alcoholism. It's way more complex and the social catalysts are myriad. And honestly, you want to hit a bigger health issue, try pounding on cigarettes.)

But anyway ... Think Jersey, drink Jersey. And Kurt highlighted this story for good reason: Don’t think the folks in Trenton are above trying something similar.

Here’s why: Four years ago, Dick Codey, as our acting governor, told a joint session of the Legislature during the budget address: Good news, we’re not broke; bad news, we’re heading there.

Not much has changed, except we have the current recession that has washed away revenues like sand on the beach in a nor’easter to stir in with our year-to-year budget deficits that have to be covered. That is to say, with the recession boogeyman, us and other cash-starved states are nearing desperation (Obama bailout notwithstanding). And that’s a recipe for Trenton to bump up so-called sin taxes, thinking that it’s a palatable tax affecting fewer people. (It actually works, politically speaking. For example, the per-pack state tax on cigarettes has jumped a number of times since 2005, and people still buy their smokes, even remaining brand-loyal to their Newports, and not opting for Basics etc.)

Governor Corzine is scheduled to pitch his 2010 fiscal year budget on March 10th. The budget proposal should be on the governor’s Web site that day, too, so it’s worth a look at the document to tease out the anticipated revenues and see if the malt beverage industry or taverns are taking a hit.

But remember, the budget in March ain’t the same budget on June 30th, the date by which it must be passed. The Legislature usually grabs this thing and monkeys with it, sometimes disasterously.

So from spring to summer, be alert.

NOTE: This is an election year in the Garden State, so Jersey brewers, the taxes and fees they pay and why our regulations need some changing will be a recurring topic.