Democrats' Tall Order: A Balanced Budget on a Beer Back

Mass produced beer -- think bulk American lagers like Rainier, Pabst and Budweiser but also including micro giant Redhook -- will get more expensive if statehouse Democrats get their way in the next few days.

In what has become nearly a perpetual effort to balance the state budget, Democrats have proposed raising the beer tax to 50 cents from the current 14.6 cents for every gallon of beer produced. This could mean an additional wholesale cost of few cents a pint, 25 cents per six-pack and $7 to $10 a keg come June if the measure passes and is signed by the governor.

The retail cost at the tap or market could be higher still. Major label beer distributors oppose the new tax, saying this would increase hardship in an industry already reeling from the recession and declining sales. (In the interest of full disclosure, I am a co-owner of the Streamline Tavern on Queen Anne, which has both local micros and not-so-local macros on tap.)

John Guadnola, executive director of the Washington Beer and Wine Wholesalers Association, says higher prices will add to the industry's problems. And this would effect the 3,000 jobs linked to major-label beer in the state. What more, he says the tax disproportionally affects lower-income beer drinkers and not up-market sippers of microbrews. "It's a regressive tax," he says. "We strongly oppose it."

Part of an overall revenue package that also would tax candy and raise sales taxes statewide by a tenth of a penny, the beer tax by itself would bring in an estimated $58 million more annually. Sen. Ed Murray, a Seattle Democrat, says lawmakers have few options available to balance the budget.

Existing cuts have left everything from roads to education vulnerable, a sales tax hike is a non starter with the GOP, and an state income tax is a political impossibility, says Murray. So lawmakers are targeting what they see as "optional" purchases.

Such as that six-pack of High Life.

"There are no good choices with taxes," says Murray, a Guinness drinker. "But a quarter more for a six-pack of beer -- money that will go to education -- isn't going to kill anyone."

Maybe not, but it will make life a little less less worth living, jokes Tim Parson, a Rainier and Bud drinker who was on his way into Capitol Hill's Canterbury Ales and Eats. "Target the microbrew snobs," he says. "They can afford it."

Free of the tax are in-state micro breweries, classified as those that produce less than 60,000 barrels annually. This exemption includes every craft brewery in Washington with the exception of Woodinville's Redhook.

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