Committee separates proposal from larger tax bill

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"It plays right into the hands of the industry lobby," said Rep. Max Williams, one of the sponsors of the beer tax proposal.

If the legislature does approve the beer tax increase, the industry has promised to gather signatures to put the issue of any beer tax increase before voters. If the industry were to get a referendum on the beer tax or the entire revenue package it would not appear until the November 2004 ballot, too late to provide much money for the 2003-05 biennium.

Rep. Lane Shetterly, revenue committee chairman, emphasized that no decision had been made on how the final revenue package would be put together. A spokesman for Speaker Karen Minnis said a majority of House members wanted to see the beer tax in a separate bill. "If it truly has broad public support, then it should stand on its own," Chuck Deister said.

Beer lobbyists argue that legislative opposition to the beer tax could doom the entire revenue bill. "We don't want to be responsible for bringing down the whole package," said Mark Nelson, a lobbyist for Anheuser-Busch.

Rep. Phil Barnhart, a member of the revenue committee, said it was obvious to him that the beer tax bill was sent out on its own to make it easier to kill.

The bill before the revenue committee would raise the existing tax of $2.60 a 31-gallon barrel in phases and dedicate the revenue to county health and substance abuse programs. The bill exempts from the new rates the first 5,000 barrels a month; imposes a rate of $4.96 a barrel for amounts between 5,000 and 10,000 barrels; and $9.92 for amounts over 10,000 barrels.

Dick Yates, an economist with the legislative revenue office, said the highest rate would apply to the big three brewers, Miller, Anheuser-Busch and Coors. A handful of Oregon brewers might occasionally pay the $4.96 rate in some months.