If, 25 years ago, a group had approached Oregon Legislators promising their industry would produce 5,200 direct jobs and over 10,000 indirect jobs, if they promised their industry would be clean, green, popular with Oregonians and provide a uniquely Oregon attraction for visitors that would equal the states wineries, if they would forego any tax breaks plus agree to pay tens of millions of dollars for the privilege of doing business in Oregon – what would legislators have said?
That is the history of Oregon’s craft brewing industry. We’ve grown an iconic industry built on uniquely Oregon advantages in agriculture, people, place, lifestyle and tourism. Oregon legislators have encouraged the growth of the Oregon craft beer industry by keeping beer taxes here competitive with neighboring states. Only 1 of the top 50 Craft brewing companies in the U.S. in 2007 resides in a top 10 beer excise tax state. Oregon is home to 7 of the top 50 craft brewing companies in the U.S.
Raising Oregon beer tax rates would be bad for Oregonians and Oregon beer producers because…
Boosting beer taxes by nearly $50 per barrel – an increase of over 1900% – would make Oregon beer taxes the highest in the country.
Raising Oregon beer taxes by nearly $50 per barrel would be the largest single increase in beer taxes in American history.
Oregon Brewers Guild members already pay millions of dollars per year in beer excise taxes in addition to state corporate and income taxes, property taxes and fees all other Oregon businesses must pay.
Tax hikes on beer producers would raise prices for Oregon consumers, retailers and restaurants at the worst possible moment
Beer taxes are inherently regressive – more than half of the proposed increase would be paid by Oregonians earning less than $45,000 per year.
Restaurants and taverns are already experiencing major revenue losses from the economic downturn, and to tack a price increase on beer would only drive more price-sensitive customers away.
The proposed tax would increase beer prices significantly, which would encourage customers to purchase their beer from retailers in bordering states.
Higher beer taxes threaten Oregon’s growing beer industry and the $375 million in economic benefits the industry generates in Oregon every year.
The proposed beer tax increase will devastate a homegrown industry. Oregon’s beer industry directly provides over 5,200 jobs.
Increasing state taxes on beer by more than 1900% over the current tax could result in the loss of up to 3,400 jobs.
A huge beer tax hike will threaten the second-largest craft beer industry in the nation with higher costs and lost sales
Taxes already are the single most expensive ingredient in beer, costing more than the labor and raw materials.
Oregon’s beer tax rate is already higher than beer tax rates in Colorado, Missouri and Wisconsin.
The Oregon Legislature’s recognition of the economic development benefit from keeping Oregon beer tax rates competitive with other beer-producing states has nurtured the second largest craft brewing industry in the nation.
Raising Oregon beer taxes would make Oregon beer, already premium-priced, less competitive and stunt its growth.
Around 12% of beer consumed in Oregon is made here by Oregonians. That’s the highest craft beer market share of any state in the country – three times higher than the national average.
Only 5.09% of current Oregon beer, wine and liquor tax net revenues actually are earmarked for mental health, alcohol and drug treatment programs.
State and local governments have not been held accountable for the $155.8 million they collected in 2008 in net beer, wine and liquor revenues. They cannot tell you how they are spending most of the current alcohol taxes they collect because only a small percentage is specifically spent for treatment programs.
In 2008, only $7.9 million of the $155.8 million in total revenue collected was earmarked specifically for mental health, alcohol and drug treatment programs.
It’s unfair to ask beer drinkers to pay for prevention and treatment for all substance abuse in Oregon.
If policymakers want more money for alcohol and drug treatment programs, they should first consider reprioritizing the General Fund dollars we currently collect rather than boosting beer taxes.
Brewers would have to pay the higher tax whether or not they are profitable. To stay afloat, they will be forced to pass the tax increase on to consumers and suffer the sales losses rather than make too little margin per sale to keep their businesses viable.
