Sin taxes are a mainstay of the state's revenue structure??..Last year, when the governor and legislature wanted to raise more money one solution was to propose a new liquor store??.But in the effort to tap revenue from alcohol, the state's tax on beer remains a poor cousin. New Hampshire Public Radio's Josh Rogers has more.
To stand in the parking lot of any strip mall with a state liquor store and a supermarket is to stand at the confluence of two rivers. One is the wine and spirits that flow through the 74 state liquor outlets... The other is the beer that flows through the state's nearly 1400 licensed grocery and convenience stores ..Both rivers run rich in money ..In 2004, NH's gross liquor store sales brought in about 300 million dollars ... Private retailers grossed about the same amount selling beer. But if the revenue streams are about the same size, the flow to the state is not. Liquor and wine is add about 119 million dollars; beer yields only about one tenth as much.John Byrne, of the New Hampshire liquor commission, has written about the underperformance of the state's beer tax. He says he's also told lawmakers.
"I have raised it several times testifying, that especially when establishing revenue estimates for a future budget not to expect an increase in the beer. That's the general discussion. They accept it, and there's never a discussion after that for a change in what we're doing."
According to Doug Hall, of the NH center for public policy studies, this non-discussion about the beer tax has been going on for some time.. .
"Strange among taxes it has not had its rate monkeyed with in 20 years almost. So, if spending goes up at three percent a year and the beer tax remains flat, then some other tax has to go up greater than three percent to even that out."
Over the last 15 years inflation has cut the effective rate of NH's beer tax by nearly a third. Unsuprisingly, people whose bottom line depends on beer sales think that's just fine...In fact, the shrinking tax burden adds new ammunition to old argument. That Cheap alcohol is central to the state's identity..
"It's a draw and it's a draw that brings people into the state of NH."
John Dumais is President of the NH Grocers' association. He says low taxes are to NH what Gambling is to Nevada and Disneyworld is to Florida. He says to touch the beer tax would puncture that
"We have a reputation that we have been driving for years.Where we have been telling people to come to NH for lower priced products. And when they come for those products, they are also coming to take a hotel room to also take a meal in a restaurant to buy lottery tickets to buy gasoline for the empty gas tank in their car. There's a lot going on with it -- a cumulative effect by it."
The value of that cumulative effect is difficult to measure.. But when it comes to beer the question is how much of a tax advantage does the state need. The tax foundation, a right leaning think tank, says NH's beer tax burden is the third lowest in the nation. So low, in fact, that even if the NH increased it's total rate by 50%, the levy would still be lower than in Massachusetts. Assuming that price increase did not hurt sales, that change could bring the state an additional 6 million dollars. Given the looming budget deficit the beer tax could get a look from lawmakers. But if the reaction of Lou D'Allessandro, chair of the state senate ways and means committee is anything to go by, it won't be a long one
"If you played around with it at this point in time, it's a risky situation."
Part of that risk is a fear that increasing prices would cause a drop in state revenue. But D'Allessandro also says the possible benefit might not be worth the hassle of picking a fight a host of powerful interests: breweries, beer distributors, chain grocery stores and a vocal group of small businesses.
"You've the mom and pop border stores that have survived on selling beer and cigarettes, and you would have some very, very serious testimony from those people and that the reason those people have been able to service is because they are lower in price than the corresponding stores on the other side of the border. That's a legitimate argument and it should be."
But there is, of course, another legitimate argument when it comes to state beer policy -- the beverage's social costs. George Hacker is director of alcohol policy with the Washington-based think-tank Science in the Public Interest.
"Beer is the greatest source of alcohol in our county and therefore it's the greatest source of problems related to alcohol -- particularly regarding car crashes, violence, youth problems."
And according to some economists, higher taxes, would reduce sales -- particularly among underage drinkers. But there are studies on both sides of the issue. Jeff Becker is president of the beer institute. He insists making beer more expensive would do little to curb youth drinking.
"The decision to buy beer or not is not made by a price increase on five to ten to 20 cents a six pack because they are doing something illegal anyway. So those studies are interesting but as a public policy matter those are about all they are."
Becker certainly agrees that beer or any alcoholic beverage imposes costs on society. In the past decade, the beer industry has spent hundreds of millions of dollars on programs to curb underage and unsafe drinking. Supporters of a higher beer tax say those voluntary efforts may be helpful but they do nothing to reduce the hundreds of millions of dollars a year that alcohol abuse imposes on taxpayers through higher health care, criminal justice and other spending. Viewed that way, they say a beer tax should be seen as a user fee, like paying the toll on a highway. If alcohol abuse causes problems, the people who use alcohol should help foot the bill.
