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Sides rally for and against booze tax

Alcohol tax would rise from 3 to 5 cents on the dollar under tentative proposal

Posted: Friday, August 20, 2004

Proponents and opponents of a liquor tax increase are ready to have their first match in the Assembly meeting next Monday.

The Assembly will have a public hearing on whether to put a proposal on the October ballot to increase the sales tax of alcoholic beverages from 3 cents to 5 cents on the dollar, effective Jan. 1, 2005. That is in addition to the current 5 percent city sales tax.

Jack Tripp Jr., owner of the Viking Lounge, said he will be there to protest.

"It's unfair any business should be subjected to double tax," Tripp said. "They call it a sin tax. It's easy to pick on the liquor industry."

About 28 bars, 16 package stores and 22 restaurants sell alcohol in Juneau.

Gina Callister, owner of North Lender Grill, said if the proposal is passed, the city will have even more serious alcohol-related problems.

"People are not going to drink less. They will just get their beers from liquor stores, go home and get drunk," said Callister while sipping a Budweiser at the Imperial Saloon. "You will have more domestic violence cases."

Matt Felix, a proponent of the increase, has made about 300 buttons that say, "What's your two cents worth? Vote YES on the Alcohol Tax!"

"I am going to wear the button in the Monday meeting so people know which side I am on," said Felix, executive director of National Council on Alcoholism and Drug Dependence in Juneau.

He stood at the intersection of Second and Seward streets earlier this week to distribute the buttons and has received many phone calls to ask for more.

"The alcohol tax should be called a user tax," he said. "The more you drink, the more you should pay. The consequences of abuse of alcohol are high. It causes great damage to the community."

The Assembly uses the same justification Felix uses in raising the liquor tax.

"The city and borough spends a significant percentage of its annual budget combating the effects of alcohol," said an ordinance proposing to put the tax increase on the October ballot. "Alcohol should pay its own way in the community."

The ordinance also quoted a study to show the evils of alcohol. "Nationwide, alcohol is implicated in 42 percent of fatal crashes, 45 percent of fatal fires, 50 percent of hospital emergency room visits and 100 percent of fetal alcohol syndrome cases," the ordinance said.

City Finance Director Craig Duncan said if voters approve the proposal, the city will garner about $1.16 million a year just from the 5 percent alcohol sales tax.

However, City Attorney John Hartle said he will recommend the Assembly set the money aside if residents vote in favor of the increase.

"State law says a municipality may not impose taxes on alcoholic beverages, except if sales taxes are imposed on other sales within the municipality," Hartle said. "The law is ambiguous and there is a case pending in the Alaska Supreme Court. It's safer to set the money aside than to spend it."

The case Hartle mentioned is one between the Fairbanks North Star Borough and its local businesses selling alcohol.

Last October, about 57 percent of voters in the Fairbanks North Star Borough approved imposing a 5 percent liquor tax, effective July 1, 2004. Local businesses challenged the result, claiming that it is illegal. A trial court upheld the tax against the challenge this spring. But it is appealed to the Alaska Supreme Court.

"If the Alaska Supreme Court throws out the tax, I will recommend the Assembly repeal its decision immediately," Hartle said.

• I-Chun Che can be reached at ichun.che@juneauempire.com.



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