BOISE – After three days of hearings and an intense lobbying campaign, Idaho lawmakers Wednesday rejected legislation to raise the state’s beer and wine tax.
House Bill 140 would have raised a tax that hasn’t been raised in four decades to pay for substance-abuse treatment services. The state has expanded the services in the past few years in an effort to trim its large prison population.
The House Revenue and Taxation Committee voted 13-5 to kill the bill, a lopsided outcome in a vote expected to be close.
“It was a good vote,” said Bill Roden, lobbyist for the Idaho Beer and Wine Distributors Association. “We worked at it.”
A coalition of groups – retailers, wineries, breweries and “the general business community” – helped the lobbying effort, Roden said.
North Idaho committee members split on the vote. Rep. George Sayler, D-Coeur d’Alene, favored the bill, while Reps. Jim Clark, R-Hayden Lake; Dick Harwood, R-St. Maries; and Phil Hart, R-Athol, voted to kill it.
House GOP Caucus Chairman Ken Roberts, R-Donnelly, said he said he thought the bill was flawed.
But, he said, “I want to make sure I give notice to the beer and wine industry that it is time to step up to the table and have an increase that is supported by that industry, to help fund substance abuse treatment in this state.”
Rep. James Ruchti, D-Pocatello, said, “This is not the right time to be raising a tax on Idaho’s businesses.” Doing so, he said, “would send a message that their government doesn’t get it.”
Several industry lobbyists told the committee they would never support any increase in Idaho’s beer or wine taxes.
Clark questioned advocates who said the measure would provide a “stable” funding source for substance abuse services. “I’m not sure beer and wine drinkers are a real stable revenue source,” Clark said.
Keith Allred, a former Harvard professor and the bill’s sponsor on behalf of the good-government group the Common Interest, countered, “There are few products you can find that are more recession-proof than beer and wine. That speaks to the stability.”
Several lobbyists who opposed the bill said responsible drinkers shouldn’t have to pay for substance abuse services they don’t need, though Allred said the alternative is that nondrinkers pay for the services through general tax funds, rather than those who do drink. He said research shows that those who abuse alcohol drink by far the most alcoholic beverages, and thus would pay most of the tax.
Harwood said rather than focus on treatment, perhaps Idaho should focus on education and prevention.
Rep. JoAn Wood, R-Rigby, who urged lawmakers to support the bill, said, “This is a powerful lobby that’s been lobbying us. … I resent having people in my district come to me and tell me they’ve been threatened with losing their jobs (if the bill passes). … I think that is unconscionable.”
Sayler said, “I question the argument about ‘the time is not right.’ My question is, if not now, when? … It hasn’t been the right time for 48 years.”
Roden, asked afterward if he’d still work with the bill’s proponents this year toward a compromise, said, “I don’t think there’s time this year to really consider it.”