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Beer lovers line up against hefty tax at Salem hearing

09:47 PM PST on Monday, February 23, 2009

By ERIC ADAMS, kgw.com Staff

SALEM, Ore. -- Addiction and recovery advocates were pitted against a cadre of brewmasters and Oregon’s microbrew industry Monday as the Legislature held public hearings over a proposed 1,900 percent beer tax increase.

Video: Brewers hopping mad over tax

The Oregon Partnership, a non-profit group that combats drug and alcohol abuse, strongly supports the proposed tax and wants the proceeds to go toward funding prevention and treatment programs.

The state sees the tax as a way to pump money into programs that are hurting for funds in light of the current budget deficit.

"Increasing the beer tax is one of the most logical steps that can be taken in the goal to stabilize addiction recovery services,” said Stephanie Soares Pump, who serves on the Governor’s Council on Alcohol and Drug Abuse Programs.

Restaurateurs, breweries and many Oregon microbrew enthusiasts oppose the legislation, claiming the state’s low beer tax encourages a thriving industry.

House Bill 2641 claims Oregon ranks 49th among states in its malt beverage taxation rate, which has not been raised in 32 years. Backers of the legislation claim it would increase the tax on a 12-ounce beer from one cent to 15 cents.

 More: Outrage brewing over 1,900% beer tax hike

Rep. Ben Cannon, D-Portland, said the bill would raise $300 million toward alcohol and drug addiction treatment.

However, opponents claimed those costs would be passed to beer drinkers and would raise the cost of a pint by up to $1.50. It would also cost jobs in the restaurant and brewing industries, they said.

“We could see a $2.50 to $4 a six-pack (price) increase,” said Kurt Widmer of Widmer Brewing Co., one of the state’s largest microbrewers. "Beer drinkers, whether you want to argue the math or not, will pay an increased amount at a time they are all suffering as we are."

Laurelwood Public House & Brewing Co. owner Mike De Falb said it was unfair that wineries and liquor distillers did not face a higher tax. He also said the tax should exempt smaller breweries like his own, as previous versions of the legislation have done.

The tax has not been raised since the 1970s but not for a lack of trying. The issue is a biennial one in Salem, but so far lobbyists and the beer industry have defeated every attempt at raising the tax.

National breweries would account for 88 percent of the tax, according to the state.

The tax bill is sponsored by five lawmakers, four from Portland and one from Springfield.

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