Solution to funding problems – the beer tax

Two and a half cents a can or bottle. Fifteen cents a six-pack. A whopping 30 cents a case. That’s what Bruce Elder would have you paying in a new beer tax that would provide localities in Virginia with funding long ago promised by the Virginia General Assembly for local law enforcement that rarely comes in the amounts promised.

“No one I’ve talked to has had an objection to it – not one consumer,” said Elder, a member of Staunton City Council, which earlier this year passed a resolution encouraging the state to double the current excise tax on beer from 26 cents per gallon to 53 cents per gallon, or about five cents per 12-ounce can or bottle. The extra money generated would then be earmarked to funding for what has become known over the years in Virginia as HB 599 funding, which goes to cities and a few counties with police departments to provide something of a balance to the monies that the state gives to counties for their local law-enforcement efforts.

“It’s a user tax, and people that don’t drink it aren’t going to pay it,” Staunton Mayor Lacy King said Thursday evening in a discussion of the excise-tax idea that came up in a meeting with area legislators Emmett Hanger and Chris Saxman.

“Bruce’s proposal is to dedicate that to law-enforcement funding. That kind of threads it back up a little bit all the way across the Commonwealth,” said King, noting that the city had to adjust its budget for the current fiscal year by $250,000 due to the state’s decision to yet again pull back on its commitment to HB 599 funding, “which is significant for a community this size,” King said, equating, Elder said, to six public-safety positions on the city payroll.

Well-intentioned though it may be, the effort would be sure to generate opposition among the beer-wholesaler industry in particular, even in spite of the relatively paltry amount of money per purchase that would be in the offing.

“I think at the right moment you can make that argument and do something. The problem that I have with this is that even with the governor’s tobacco tax, I think you can make some arguments for doing that this year, but we’re focusing on a huge economic shortfall here, and the political dynamic is such that if you attempt anything, even something minor, to enhance revenues, it’s going to get shot down. And you saw some of that with the reaction to the governor’s proposal on the tobacco tax,” said Sen. Hanger, R-Mount Solon, himself a proponent of tax reform who five years ago proposed, you guessed it, increases in the excise tax on beer and on cigarette sales in Virginia as part of his reform package.

Saxman offered a similar assessment of the political mood in the here and now, though it sounded as if he might think the issue could be worth revisiting down the road.

“Obviously I think society is moving more toward a user-fee societal-impact revenue orientation, and I think that’s what the governor was trying to get at with his proposal yesterday. So I think you’ll see more of this coming down the line, and it’ll be done in a more comprehensive manner rather than one at a time,” Saxman said.

– Story by Chris Graham