An effort to increase Wyoming’s lowest-in-the-nation beer tax was narrowly defeated by the Joint Revenue Committee during a meeting last week, much to the frustration of primary proponent Sen. Ray Peterson of Cowley.
Wyoming’s beer excise tax is only 2 cents per gallon, which ranks 50th in the nation, and it hasn’t been raised since being enacted in 1935, Peterson said.
Peterson, who chairs the Senate Revenue Committee, said he was tasked by the leadership of the Wyoming Legislature to study the issue during the interim between the 2013 general session and the 2014 budget session. He brought the increase to the table during the Joint Revenue Committee’s meeting last Thursday and Friday in Buffalo.
“The management council (leadership) dictates what they’d like us to discuss, and the beer tax was put on the interim calendar,” Peterson said. “I came up with the idea of revisiting the malt beverage tax increase, which had gone down in flames several times since Prohibition.”
The Wyoming Dept. of Revenue actually assesses the tax on a per-liter basis, and Wyoming’s beer tax is ½-cent per liter or $0.19 per gallon. Peterson’s draft bill called for an increase in the beer tax to 4½ cents per liter, or 17 cents per gallon.
His bill would have also earmarked a portion of the revenue for substance abuse treatment, he said, noting that Wyoming’s treatment centers are “struggling for money.” He said Wyoming matches a federal grant for the treatment centers, but with the current federal budget issues, he would like to see a more steady stream of revenue for the centers.
The beer tax currently generates about $265,000 annually in revenue, so increasing the tax eight fold would be “a sizable chunk of change,” he said, helping to pay for services for those who need treatment.
Peterson said he wanted the bill to advance to that it could be debated as a committee bill during next year’s budget session, which begins in February. He said he could live without the earmarking of the revenue, which some legislators on the joint committee objected to.
During Friday morning’s discussion, Peterson said he received support from Riverton Mayor Ron Warpness, who stated that 80 percent of the Riverton Police Dept.’s calls are related to alcohol in some way. Also testifying in favor of the bill was David Birney, director of the Peak Wellness Center in Cheyenne, who stated that the tax increase would provide a more stable funding source for Wyoming treatment centers.
Opponents speaking last week included Mike Moser, executive director of the Wyoming State Liquor Association, and Black Tooth Brewing Co. owner Tim Barnes of Sheridan. He said Wyoming Taxpayers Association Director Erin Taylor didn’t take an official stand on the issue but called the beer tax regressive and social engineering.
“What?” Peterson said. “Everything we do in the legislature is social engineering. The speed limit is social engineering.”
Peterson said he has seen the consequences of alcohol abuse and said the tax increase is a matter of “pay now or pay later.”
If enacted, Peterson’s beer tax increase to 17 cents per gallon would still leave Wyoming well below the national average of 28 cents per gallon and well below neighboring states Utah (41 cents/gallon), Nebraska (31/gal) and South Dakota (27/gal), slightly higher than neighbors Montana and Idaho (15 cents/gal each) and much higher than Colorado (8 cents/gal).
The draft bill failed on a 7-6 vote, Peterson said, and a motion to totally eliminate the tax by Sen. James Anderson (R-Casper) also failed. Sen. Cale Case (R-Lander) moved to delete the earmarks and the tax details but leave the bill in place as a placemark bill for future work. That motion initially failed 7-6, according to media reports, but members of the audience said that House Revenue Chairman Mike Madden (R-Buffalo) voted twice.
After a break, another vote was taken, and again the motion failed with six lawmakers voting in favor and seven against.
Peterson said he will now draft and sponsor the tax increase bill personally and take it to the budget session, though he said the bill will face a tough road as a non-budget bill, requiring a two-thirds majority to be introduced.
“It’s an uphill battle but a battle that needs to be fought,” Peterson said, noting that he will be looking for a strong co-sponsor to champion the bill in the House. “It’s a matter of cause and effect, and I’m trying to attack the cause.
“The legislature over the last 80 years has said they don’t want to deal with it. I don’t know if it’s a matter of pride – being the lowest tax in the nation – or what. We’re the highest consumptive state per capita and the lowest taxed…The liquor industry brags about putting $14 million into the general fund through beer and liquor sales, but nothing compares to the cost of the effects of alcohol abuse.”
Peterson said the argument by Moser and others that the tax increase would hurt small business and hurt beer-drinking consumers doesn’t make sense, noting that a 17-cent/gallon tax would only amount to well under 3 cents per 12-ounce can of beer (1.6 cents per 12 ounces).
by David Peck