Thursday, July 17, 2008

Beer-tax debate isn't going stale

SACRAMENTO — Among things that stir people's passions, taxes and alcohol rank fairly high in the pecking order. So San Jose Assemblyman Jim Beall has learned since he proposed a large tax on beer three months ago.

The beer levy faces extremely long odds to become law, but it has generated huge publicity for Beall — more than anything he's done in his 18 months in Sacramento — though much of it has not been flattering.

The controversy surrounding the first-term assemblyman's plan continued when he abruptly canceled a news conference last week to formally announce the introduction of the beer-tax measure. The event was scheduled to occur the day after Democrats unveiled a package of taxes to balance the state budget — beer tax not included — and word in the Capitol was that Beall's announcement was seen as interfering with the party's message.

Beall now plans to introduce his proposal in the next week or two.

The Democratic leadership has not taken a position on the beer tax. Initially, Beall proposed to raise the current 2-cents-per-can-or-bottle levy by 30 cents, but he has since scaled it back to 15 cents per can. Put differently, a six-pack would cost nearly a dollar more.

Additionally, the assemblyman now says the tax should apply only to brewers that produce more than 60,000 barrels annually, thus excluding small craft brewers. He estimates it would generate $500 million annually for programs Advertisementto curb alcoholism and underage drinking, causes to which Beall has devoted years of work. The money would be set aside in a "lockbox" and could not be spent for other purposes.

If the saying is true about any publicity being good publicity, the proposal has been a bonanza for Beall, a former Santa Clara County supervisor and San Jose councilman. He has appeared on MSNBC and Fox Business News to defend the proposal, in addition to doing countless radio interviews.

Of course, much of the reaction has been critical. A sampling of e-mails responding to a MediaNews article about the proposal described Beall alternately as a "clown," a person with "absolutely no brains" and "another liberal jerk."

Beall shrugs off those remarks as the sentiments of a vocal minority, saying the feedback he has received has been more balanced. "I got some people who were angry and hated the idea, but others said, 'Keep up the good work,'" said Beall, who notes that the state's beer tax hasn't gone up since 1991.

Still, Beall faces stiff opposition from people like Dan Gordon, co-founder of San Jose-based Gordon Biersch Brewing. He called even the scaled-back proposal "crazy" and "outrageous."

"I'd still go belly up," Gordon said.

Beall, who rarely drinks beer, says he chose to target beer because it is the favored alcohol of underage drinkers. Gordon disputes that contention.

"I challenge him to prove that," Gordon said.

Despite such resistance, Beall said he plans to push ahead with the beer tax, which needs a two-thirds vote in both houses of the Legislature, and then approval from voters, to take effect. He's aiming to get a constitutional amendment to enact his idea on the November 2010 ballot.

"I think I might get some Republicans to vote for it," he said, "because we're not taxing the general population. We're taxing users of the product."

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