Roll out the barrel…And then your broke

PORTLAND, Ore. — Five Oregon state lawmakers want to impose a hefty tax on beer and have introduced a bill that brewers say would cripple them.
Video: Brewers hopping mad over tax

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Four Portland legislators joined a Springfield senator to introduce Oregon House Bill 2461, which would impose a $49.61 tax on each barrel of beer produced by Oregon brewers.

The tax would raise revenue for the state at a time when budgets are running in the red. Specifically, the bill says it would fund prevention, treatment and recovery programs for those addicted to alcohol and other substances.

The bill’s language defends the tax by arguing alcoholism and “untreated substance abuse” costs the state $4.15 billion in lost earnings as well as more than $8 million for health care and nearly $1 billion in law enforcement-related expenditures.

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Oregon ranks 49th among states in its malt beverage taxation rate, which has not been raised in 32 years, according to HB 2461.

Brewers hopping mad over tax

Brewers say Oregon’s low beverage taxation rate is what makes the state such an attractive place for crafting beers. The state’s brewery guild claims it would also amount to the single largest beer tax hike in the nation’s history.

Laurelwood Public House & Brewing Co. owner Mike De Kalb said the tax may sound like a good idea in this economic climate, but he believes it would cost jobs and not raise enough new tax revenue to justify the increase.

“We’re a family-owned, local Portland business. We don’t want to see something cost taxpayers more than the revenue it would bring in,” De Kalb said.

De Kalb said Oregon would potentially lose its prominence as a craft-brew destination and that some small breweries could potentially go out of business. He said Laurelwood could possibly face job cuts as well. Prior versions of the beer tax bill have exempted small breweries but this one does not, he added.

$1.50 more, or just 15 cents?

“If that tax is passed it would mean consumers would pay $315 million more (in 2009) to buy the same amount of beer they bought in 2008,” De Kalb claimed. “A pint of beer would go from $4.50 to $6.”

Rep. Ben Cannon, one of the bill’s sponsors, questions whether the true hit to consumers would be as high as beer makers claim. He told KGW his office measured the increase at 15 cents per glass not $1.50.

But Kurt Widmer of Widmer brewing told KGW that in order to keep profit margins constant, he’d increase his price to distributors, who in turn would likely increase prices to retailers, making the 15 cent per class estimate unrealistic.

House Bill 2461 has been introduced by Portland Reps. Ben Cannon and Michael Dembrow, Portland Sens. Jackie Dingfelder and Diane Rosenbaum, and Springfield Sen. William Morrisette.