During the past year of Governor Brown’s endless Executive Orders and constant rule changes by State Agencies, unintended consequences may have occurred. As the Governor shut down bars and restaurants, the Oregon Liquor Control Commission began allowing liquor stores to do curbside pickup, and distillers to take remote orders and deliver. The agency also expedited the regulatory process for takeout and delivery of wine, beer and cider. Delivery was already legal, but many restaurants and bars weren't licensed to do it. In a June 17, 2020 article in the Portland Business Journal, OLCC said “835 businesses added the off-premises license to their operations”. Oregon’s public alcohol consumption went behind closed doors.

The Governor’s stay at home orders placed citizens under a significant amount of stress, added to that a rapid increase in adults telecommuting with little to no oversight, many more adults unemployed altogether, and it was a cocktail for disaster. However, Representatives Tawna Sanchez (D-Portland) and Rachel Prusak (D-West Linn) think they have a solution and in true Oregon fashion, the solution is to tax our way out of alcohol use and addiction. They have introduced the “Addiction Crisis Recovery Act”, HB 3296.

HB 3296 increases the tax imposed on manufacturer or importer of malt beverages, wine or cider. The tax is not a new tax. What it is, however, is a major hike in the rate. The tax on beer and cider would rise from $2.60 to $72.60 per 31-gallon container (Keg) and for wine it would go from $0.65 to $10.65 per gallon. The tax would trickle down to the customer with an estimated increase of $2 per bottle of wine, and $0.28 per pint of beer and cider.

Almost immediately, representatives from the beer and wine industry spoke out against the pending legislation. The Oregon Beverage Alliance told Fox News that “Oregon's large beer and wine industry, is an essential part of the state's economy and is already struggling due to the pandemic. If this legislation passes, Oregon would have the highest beer, wine and spirits taxes in the nation”.

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In an interview with KVAL13, Deschutes Brewery President & CEO, Michael LaLonde echoed those concerns saying, "It's pretty shocking that somebody would propose, particularly at this time, an increase of that amount of money when we're already struggling to pay our bills”.

The sponsors of the bill, however, are hoping that the additional revenue generated by the tax increase will generate revenues for the Oregon Health Authority for the purpose of funding behavioral health and substance use programs. The bill would require revenue from the increased taxes to be set aside in a fund used at the direction of the Alcohol and Drug Policy Commission for prevention and substance use treatment. All told, the bill would generate $746 million in new revenue per biennium. It would fund 1,010 more resident treatment beds and 1,240 detox beds, in addition to thousands of outpatient openings and new jobs.

Jana McKamey, Executive Director of the Wine Growers Association told KVAL13, "Only three-and-a-half percent of exiting beer, wine and spirits revenues are dedicated to addiction recovery. So, before raising taxes on Oregon's wineries, breweries, and cideries, lawmakers really need to examine the current system and why existing dollars are not being spent on these programs."

HB3296 is at the House Speakers desk awaiting assignment to committee as of press time.


--Terese Humboldt

Post Date: 2021-02-26 09:08:26

Last Update: 2021-02-25 21:16:33