Beer tax debate goes local


A new wrinkle emerged Wednesday in the legislature's long-running debate over whether to increase Oregon's beer tax, currently among the lowest in the nation.

Hoping to nudge along stalled negotiations, Sen. Rick Metsger, D-Welches, proposed allowing cities and counties to levy their own local taxes on beer, and use the money to prop up local public safety agencies and public health programs.

For backers of a beer tax, that plan has one key advantage over a statewide proposal: It needs just a simple majority in both chambers to pass, a reasonable prospect since Democrats control the Senate by an 18-11-1 margin, and the House by a slim 31-29.

An all-encompassing beer tax, in contrast, would require corralling at least five House Republicans, since any revenue-raising proposal needs a three-fifths majority &

and that's assuming every Democrat would be on board.

"When everyone plays by the same rules, it benefits everyone," Metsger said Wednesday at a hearing in front of the Business, Transportation and Workforce Development committee, which he chairs. "But sometimes, you have to start this way to get everyone at the table."

His hope, he said in an interview, is that beer tax opponents will feel cornered by the possible passage of the local tax version, and agree to help shape a version of the statewide proposal.

Opponents of a beer tax argued at Wednesday's hearing that Metsger's proposal creates a motley patchwork of tax policy, includes no limits on what local governments could charge as a beer tax, and unfairly targets brewers and beer retailers &

from corner stores to restaurants.

"Local governments have no gag reflex," said Bill Perry, who represents the Oregon Restaurant Association and estimated that about 18 local governments would move quickly to pass local beer taxes, should Metsger's effort succeed. "They will continue to push tax after tax. This is a bad way to do public policy."

The beer tax issue has become intensely politicized this session, tied up in the partisan back-and-forth over how to fund the Oregon State Police's highway patrol division. Advocates have pointed to a higher beer tax as a logical source of funding for the state highway patrol, citing the high proportion of drunken driving-related car crashes.

Democrats have earmarked enough money in the tax-fed general fund to hire and train 100 new troopers over the next two years. But they said a new revenue source is needed to get the 139 new troopers needed to restore round-the-clock coverage for Oregon's highways.

House Republicans also want the additional 39 troopers, but most disagree about the need for new money to pay for them. A few, including Rep. Sal Esquivel, R-Medford and Rep. Tom Butler, R-Ontario, have thrown their support behind some version of the beer tax.

The current beer tax rate is about three-quarters of a penny for a 12-ounce glass. It hasn't been raised for 30 years.

Metsger's proposal now moves to the Senate floor, after a 3-2 vote in his committee. Sen. Bruce Starr, R-Hillsboro, who voted no, said he plans to introduce an alternate version of the bill on the Senate floor.

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