Backers make case for Wisconsin beer tax hike

MADISON, Wis. — Wisconsin should raise its tax on beer for the first time in 40 years to fund programs that will help reverse the state’s alarming rates of problem drinking, supporters told lawmakers Tuesday.

Trying to build support for raising an unpopular tax, backers told an Assembly committee the extra money was badly needed to pay for better alcohol treatment programs and law enforcement efforts to fight drunken driving. They cited data showing Wisconsin has among the nation’s highest levels of binge drinking, fatal drunken driving crashes and pregnant women who drink to excess.

“What we’re doing right now isn’t adequate. We’re top in the nation in almost every statistic,” bill sponsor Rep. Terese Berceau, D-Madison, told the Assembly committee on public safety. “Pregnant women drinking too much. Fatalities. Young kids. Why do nothing? Why assume the status quo is going to change?”

She put three pennies on the table in front of her, saying that’s how much the tax would increase on a 12-ounce bottle of beer. The plan would raise the beer tax from $2 per 31-gallon barrel to $10, which technically comes out to more than 2 cents per bottle.

But representatives of the state’s powerful brewing industry told lawmakers much higher costs would be passed on to consumers, perhaps 12 cents or more per bottle, which would hurt their sales. They said the markup would come as the product is passed through distributors and retailers.

“This tax could be devastating to my industry in the city of Milwaukee,” said Patrick Weyer, president of a United Auto Workers chapter that represents employees at the Miller brewery in Milwaukee. He said the higher tax could lead MillerCoors to transfer some production to other breweries at a time when the company is adding jobs in the city.

Miller’s powerful lobbyist, former acting Gov. Martin Schreiber, said the tax would hurt sales but do nothing to curb alcohol abuse. Smaller brewers piled on, saying the tax would force them to shed jobs.

Supporters disputed those claims, saying the tax increase was modest and the industry has grown since a 1991 federal tax hike on beer.

With opposition from Gov. Jim Doyle and some key lawmakers, the proposal remains a long shot to pass the Legislature and become law. Nonetheless, supporters said Tuesday marked progress because it was the first time in more than 30 years lawmakers heard public testimony on whether to raise the beer tax, now the third-lowest in the nation.

The plan would raise an additional $39.5 million per year, on top of the $10 million already collected, according to the Department of Revenue. The new revenue would be used for local substance abuse treatment and prevention programs and law enforcement, much of which would be handed out by the state in the form of grants.

Robert Golden, dean of the University of Wisconsin school of medicine and public health, said the extra funding was greatly needed to try to reverse drinking rates he called astonishing.

“Clearly the current system is broken and is not working,” he said. “The strongest deterrent to drunk driving is a belief you have a good chance at getting caught. More law enforcement will keep people from getting behind the wheel … And for those who are caught, we do not have adequate access to evidence-based treatment programs.”

His colleague Donna Katen-Bahensky, chief executive officer of University of Wisconsin Hospital and Clinics, said the hospital is seeing more highly intoxicated patients and spending more of its money to care for them.

Lawmakers on the committee seemed skeptical of the plan.

Rep. Garey Bies, R-Sister Bay, recalled growing up in Manitowoc, where there was a neighborhood tavern nearly every block. On his way to the Capitol on Tuesday, he said he heard a chilly reception to the plan at his local coffee shop.

“I got a couple of eyerolls and they said, ‘You people have to just stop taxing’,” he said.

The hearing comes as lawmakers are also considering an increase in the tax on liquor to pay for efforts to fight drunken driving. With support from more lawmakers and the governor, that proposal seems to have a better chance.