Senator pitches higher taxes on wine, beer, booze in Montana

Bozeman Daily Chronicle – March 18, 2017

A Montana legislator wants to raise the state taxes on beer, wine, liquor and hard cider by 10 percent to find some additional money to fill holes in the state budget.

Sen. Lea Whitford, D-Cut Bank, introduced Senate Bill 328 after her earlier bill to double the tax on wine only was tabled by the Senate Taxation Committee.

She told the same committee Friday she heeded the advice of opponents of her earlier bill who questioned why she was targeting only wine and wondered why she wasn’t looking at all alcoholic beverages.

“My reason for doing that has not changed,” Whitford said. “We’re seeing a decrease in revenue.”

If enacted, her bill would raise $2.7 million in general fund revenue in fiscal 2018, $2.9 million in 2019 and about $3 million a year in 2020 and 2021 and slightly more than $1 million annually in state special revenue.

“It could help our schools, it could help our children, it could help our prevention programs,” Whitford said.

State Revenue Director Mike Kadas supported the bill on behalf of the Bullock administration, saying some of these taxes hadn’t been raised in years.

“We think, given the fact that there have not been inflationary adjustments in a number of years, it’s not unreasonable to include those in an overall revenue package,” he said.

Heather O’Loughlin of the Montana Budget and Policy Center supported the bill, calling it a modest tax increase.

“At a time when we’re facing considerable budget constraints, we should not be asking Montana families and our most vulnerable neighbors to shoulder the entire burden of those cuts,” she said, saying SB 328 is part of the solution to find more general fund money

Andy Bixler of the Montana Associated Students, representing 40,000 college students, said the group backed the bill because the state faces some hard budget decisions and it could help stave off some of the cuts. He conceded it might seem counterintuitive for a representative of college students to support a higher tax on beer, wine and liquor but did so anyway.

Other supporters included representatives of the Montana Tavern Association, two unions, Montana Women Vote, Opportunity Resources, Montana Public Interest Research Group and Montana Primary Care Association.

Bob Story of the Montana Taxpayers Association opposed the bill, questioning why it picks on one segment of the economy and raises taxes on them, even small ones.

Montana has a temporary revenue problem, Story said, asking: “Why would the Legislature want to pass a permanent tax to take care of a temporary problem?”

Mona Jamison, representing the Wine Institute, said the proposed tax increase on wine would make Montana’s excise tax $1.14 a gallon, which would rank 10th or 11th highest nationally. She said the national average excise tax is 72 cents a gallon.

“We appreciate there is a budget crisis,” Jamison said. “We think the net should be broader, rather than single out a single industry.”

Kristi Blazer of the Montana Beer and Wine Distributors Association said she opposes the bill because it is not only a selective tax but also a regressive tax.

Other opponents included representatives of the Montana Liquor Store Owners Association, Anheuser-Busch, Americans for Prosperity-Montana, Montana Restaurant Association and Montana Chamber of Commerce.

The committee took no immediate action on the bill.

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