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Legislature 2001: Alcohol tax measure faces opposition

Chairman will propose lower tax

Posted: Wednesday, May 02, 2001

Three hours of public testimony Tuesday was enough to reinforce what Rep. Bill Williams already believed: That a bill to raise the excise tax on alcohol 300 percent goes too far.

The Saxman Republican said after the hearing he will introduce a new version of the bill proposing a lower tax hike - one the restaurant and bar industry supports.

"I don't know if I'd support it. I'd at least move it forward," said Williams, co-chairman of the House Finance Committee, which heard the bill for the first time Tuesday. "I don't think we need to tax any more."

Williams did not say how much of an increase he would propose, noting he wanted to hear more testimony first. However, the initial round of comments from anti-tax forces made an impression, he said.

Bar owners and others who buy alcohol wholesale showed up in force, outnumbering people who want the tax increase by 2-1. Those opposed accused lawmakers of trying to raise money and stop chronic drunken drivers by penalizing one industry and forcing responsible drinkers to pay for the misdeeds of a few.

Jack Manning, owner of Duck Creek Market in Juneau, said a 1997 tobacco tax hike drove his customers to larger retailers, prompting cigarette sales to drop 30 percent. Sales picked up 10 months later, but he's afraid

a large hike in the liquor tax would doom his Mendenhall Valley store.

"I can survive 10 months with reduced 30 percent cigarette sales. I don't know if I could survive 10 months with reduced 50 percent alcohol sales," Manning told the panel. "What I fear from the tax is real ... it scares me."

Many opponents repeated a common theme: Postpone the bill until next year.

Juneau activist Cindy Cashen urged the committee to ignore the industry's "delay tactics," saying more people will die if the measure fails now.

Bill sponsor Rep. Lisa Murkowski said the dime-a-drink tax would raise roughly $30 million annually for programs related to alcohol abuse, which costs more than $250 million a year. Consumers currently pay roughly 3 cents a drink.

Nelson Page of the Alaska Mental Health Trust Authority argued the tax would not hurt industry, saying a person who consumed five $4 drinks in one night would pay only 50 cents in taxes.

"That's not very much. I don't think it's going to have a substantial impact on this industry," Page said.

Some opponents of the bill said they were willing to go along with a moderate tax increase but called the dime-a-drink proposal "outrageous, unreasonable and punitive." Juneau bar owner Judy McDonald said she could handle a 35 percent increase phased in over three to four years.

"If it all comes at once it's actually going to be very devastating to a lot of people," said McDonald, owner of The Lucky Lady downtown.

The panel's other co-chairman, Rep. Eldon Mulder, said the industry needs to make a greater contribution toward covering alcohol-related costs and called a 35 percent increase "unreasonably low."

However, he did not endorse the dime-a-drink increase either.

"Is a 300 percent increase reasonable? Probably not," said Mulder, an Anchorage Republican.

Committee member Rep. Con Bunde - who championed the 1997 tobacco tax - also is opposed to the Murkowski bill.

"I think it's too high," said Bunde, an Anchorage Republican. "It appears to me it's just a tax to raise money. If we're out to raise money, we should do it on a broad basis."

With time running short, it appears unlikely an alcohol tax increase will pass the Legislature by the May 8 adjournment deadline. Mulder said it is not on his top-10 list of priorities this year.

Kathy Dye can be reached at kdye@juneauempire.com.



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