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Balancing the budget on beer

The Top Story by Chris Graham

Right now, you’re paying about two and a half cents a can in state excise taxes for every can or bottle of beer that you buy.

If Bruce Elder were to have his way, you’d pay another two and a half cents, and then cities like Staunton that have to make some tough public safety-sector choices when the Virginia General Assembly plays the HB 599 funding game to their disadvantage again would have a better time at it during their spring budget seasons.

“We got the short end in this last budget. This would be a way of restoring those funds and tying it to law enforcement,” said Elder, a member of Staunton City Council, who is talking up the idea of raising Virginia’s beer-excise tax from its current 26 cents per gallon to 53 cents per gallon, or about five cents per 12-ounce can or bottle. The tax would thus equate to 30 cents a six-pack or 60 cents a 12-pack on retail-store shelves. The extra money under the Elder plan would 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.

HB 599 funding seems to get caught up in the budget crosshairs every couple of years in Richmond, and the effects are felt in cities like Staunton, which struggled to account for an overall decrease in state aid in its 2008-2009 budget reviews this past spring. The impact on Staunton is the equivalent of six full-time emergency-services positions that could be funded under a fully-funded HB 599 program.

The beer industry would be expected to fight any proposed tax increase, as it has done and done well at the federal level since a 1990 adjustment to the federal excise tax was approved by Congress. Efforts have been made toward another increase in recent years, but the beer wholesalers lobby has been effective in blocking tax hikes by doling out campaign contributions and by having sympathetic legislators submit bills proposing a rollback to 1954 levels to serve as a sort of political litmus test.

“That’s actually a defensive measure. Having this legislation introduced every year getting legislators on record on the issue of a cut makes it harder for them to consider an increase. That’s the idea of it, that a strong offense is the best defense, I guess,” said Kim Crump, the manager of federal-government relations at the Washington, D.C.,-based Center for Science in the Public Interest, whose Alcohol Policies Project has been monitoring the beer-tax issue at the federal level.

National surveys have found strong support for increases in the excise tax on alcohol sales among nondrinkers and drinkers alike, Crump said, and Elder has an idea as to why that might be. “This makes sense because, one, this tax is a consumption tax, and two, because alcohol-related incidents make up 40 percent of a police officer’s day, and thus 40 percent of the budget of a police department,” Elder said.


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