CITIZENS   FOR  LIMITED  TAXATION  &  GOVERNMENT

 

CLT Update
Wednesday, May 23, 2001

Hearing on proposed Joe Six-Pack tax increase


[T]he no-new-taxes pledge Swift took, following her Republican predecessors, William Weld and Paul Cellucci, is a formidable obstacle.

"She's taken that armor on," said [MADD's Richard] Shire. "Will she change? I don't know."

State House News Service
May 22, 2001


Remember when every tax hike was needed "for the children"? As its cachet has faded and the worn-out excuse became a public joke, notice now that we must have tax increases for "critical unmet health care needs."

Somebody's obviously done new focus group research.

CLT Associate Director Chip Faulkner attended yesterday's taxation committee hearing on the Joe Six-Pack tax increase and testified against it. He reported to us that by comparison it made the recent tobacco tax hike hearing seem almost rational.

"State Rep. Colleen Garry started crying in the middle of her testimony about alcoholism in her family. At least I think it was in her family; some of the words got muffled by her sobbing.

"I felt like I was at an AA meeting. When I got up to speak I almost started off by saying: 'My name is Chip and I'm an associate director...'

"Actually, I began my testimony by reading Barbara's quote from our news release: 'Read our wine-sipping lips, Sen. Walsh: No new taxes...'

"I also pointed out that the additional $57 million they want to raise annually through this tax can be found in that bloated state budget. I asked: 'The money you need for this program only represents one quarter of one percent of the state budget. Can't you either cut the budget by that minuscule amount or transfer it from other programs without hitting the taxpayers?' Funny, I got no response to that question."

The State House News Service reported [below] "Walsh said Massachusetts agencies and service providers spent almost $3 billion in 1998 'due to the destruction caused by substance abuse.' That's about $441 per person, Walsh said."

Not if you're among "the richest one percent," it isn't; nor if you're in the no-tax or "unearned income tax credit" status.

Advocates pointed out that the state already collects about $60 million annually in alcohol-related taxes but the money is funneled into its general fund.

But Sen. Walsh just said that the state spends $3 billion due to substance abuse! Where do the advocates of this tax increase think all that money comes from, the free money tree out behind the State House?

Their myopic solution is simple. Just double the tax, impose another $57 million burden on Joe Six-Pack to additionally fund their pet programs.

"For critical unmet health care needs," of course.

Then, state spending on substance abuse will rise to $3 billion $57 million a year.

... But, of course, "More Is Never Enough"!

Chip Ford


State House News Service
Tuesday, May 22, 2001

Alcohol tax hike pitched as way
to boost programs that help addicts

By Michael P. Norton

STATE HOUSE, BOSTON, MAY 22, 2001 ... For Dracut state Rep. Colleen Garry, deciding whether to apply the 5 percent sales tax to beer, wine and liquor purchased from Massachusetts package stores isn't a tough choice. Not when, as planned, the resulting $55 million will be used to treat addiction.

"This is a disease," Garry, fighting back tears, told Taxation and Public Safety committee members Tuesday morning. "We don't turn around and criticize people for having cancer and other diseases."

Garry broke down as she told stories involving a three-year-old who hid in a closet from an abusive, alcoholic father, a 36-year-old mother of four who died from a pain killer overdose, and a 15-year-old whose working father left him in charge of making sure his alcoholic mother didn't drink more than one glass of wine. "This is a very personal issue to me," Garry told her colleagues in Gardner Auditorium.

Garry and other Democrats on Beacon Hill are behind what is becoming a serious effort to lift the sales tax exemption on alcohol. Richard Shire, public policy liaison for the Massachusetts chapter of Mothers Against Drunk Driving, is already predicting the tax hike bill, which has languished for five years, will clear the House and Senate this year, forcing a promised veto by Acting Gov. Jane Swift.

"This is the first year they've finally realized that 'Yeah, this is something we're going to do,'" he said. "My gut feeling is this is going to pass in both chambers. The question is, are there going to be enough votes to override a veto. We've got to work on Swift. Our problem is going to be with the governor."

Shire said the acting governor and MADD are in agreement on a range of public safety, licensing and drunk driving bills, but acknowledged that the no-new-taxes pledge Swift took, following her Republican predecessors, William Weld and Paul Cellucci, is a formidable obstacle.

"She's taken that armor on," said Shire. "Will she change? I don't know."

On April 17, Swift, having just taken over the Corner Office from Cellucci, proposed a tax cut that would help the working poor and signed a pledge promising her "vehement" opposition to new or higher taxes. Swift's rationale is simple: cutting taxes helps the economy and raising taxes hurts it.

Members of the package store, and beer, wine and liquor industries are counting on Swift to uphold that pledge. David Wojnar, regional vice president of the Distilled Spirits Council of the United States, says the legislation proposes an "unfair solution," singles out one industry and penalizes consumers. Wojnar added that half the purchase price of "a typical bottle of spirits" already pays for a tax of some kind.

"Responsible consumption of distilled spirits, beer or wine is a socially acceptable part of a normal, healthy adult lifestyle," Wojnar said. "To indict these responsible consumers and their pocketbooks to pay for illicit drug use and alcohol abuse is not good public policy and is not in the public interest."

Richard Doyle, CEO of the Boston-based Harpoon Brewery and chairman of the Brewers Association of America, agreed with Wojnar. Doyle said the price of a six-pack of Harpoon has risen 8 percent since 1987, from $5.99 to $6.49. An overnight 5 percent increase is too much, he said. "That's huge," said Doyle. "That's dramatic. It's a very damaging, scary prospect."

Doyle also responded to Garry's rhetorical question, "What's 45 cents on a 12 pack?" Said Doyle: "If it's not your business, 45 cents doesn't seem like a lot."

But while opponents of the bill will surely continue to lobby legislators on the issue, they were outnumbered by supporters today, including Laurie and Caitlin, a pair of self-described alcoholics who were allowed to testify anonymously. Both said treatment is the only reason they're alive today.

Caitlin described herself as a "normal kid" active in school programs and who picked up her first drink at the age of 10. At 19, she's been sober for almost four years now. She told lawmakers her parents bought her brother a car and an apartment after his high school graduation, but told her she wouldn't be getting the same because they'd spent so much on her addiction treatment. "But that's okay," Caitlin told lawmakers. "Because I'm alive and I'm here."

Laurie, a middle-aged teacher, said she quit drinking in 1989. "I was fortunate to realize I can't drink," she said. "I am an alcoholic. When I drink, I can't stop drinking." She said she is driven to push for increased alcohol education because her four-year-old niece was killed "by a man who drank all day." The young girl, she said, was buried with Beanie Babies lining her casket. "I think the whole thing is education," Laurie said. "Education is what takes the denial away."

Shire, of MADD, said the state already collects about $60 million in alcohol-related taxes but the money is funneled into the General Fund, which pays for general government services. When Shire suggested that lawmakers earmark that money for addiction treatment and education, Taxation Committee co-chairwoman Sen. Marian Walsh (D-W. Roxbury) encouraged him to stick to the matter at hand.

Walsh, who is pushing separately to raise the cigarette tax, is the chief sponsor of the alcohol tax hike bill, S611. She says 43 states and the District of Columbia have a sales tax on liquor, wine or beer for off-premises consumption. The tax hike, she says, will raise $55 million a year, which would be placed in a new Health Protection Fund and spent on substance abuse treatment and education.

Citing a National Center on Addiction and Substance Abuse at Columbia University estimate, Walsh said Massachusetts agencies and service providers spent almost $3 billion in 1998 "due to the destruction caused by substance abuse." That's about $441 per person, Walsh said.

Garry said the state, through its taxpayers, is already spending heavily on alcohol-related incarceration, child abuse, medical treatment, and the high costs of social services and criminal justice programs. "We're already paying," Garry said.

Former Public Health Commissioner David Mulligan, who served under Govs. Michael Dukakis and William Weld, also spoke in favor of the bill, saying waiting lists have grown since 1987. The prevailing attitude since then, Mulligan said, is: "If people have problems, it's their problem and we will punish them if they cross certain lines."


The Boston Herald
Wednesday, May 23, 2001

Legislative push for liquor tax lacks kick 
by Ellen J. Silberman

A six-pack of beer is likely to stay sales tax free, despite a push by a handful state lawmakers who think drinkers should pay to treat people with alcoholic and drug addictions.

"There's a lot of support for the end goal (but) I don't think there's a lot of support for (a beer tax)," said a legislative source.

The plan under consideration by the Legislature's taxation and public safety committees would require package stores and other merchants to add the state's 5 percent sales tax to beer, wine and liquor sales.

Advocates, including Taxation Committee co-chair Sen. Marian Walsh (D-W. Roxbury), say a sales tax on liquor would bring in about $55 million a year that could be dedicated to addiction treatment.

Although liquor store purchases are exempt from sales tax, they are taxed in other ways - putting about $60 million a year into state coffers.

David Wojnar, regional vice president of the Distilled Spirits Council of the United States, said that half the purchase price of "a typical bottle of spirits" already pays for a tax of some kind.

But supporters of the measure say the need for treatment is paramount.

"This is a disease," state Rep. Colleen Garry (D-Dracut) said during an emotional State House hearing. "We don't turn around and criticize people for having cancer and other diseases."

Walsh is also pushing a separate bill to increase cigarette taxes. That measure seems to be gaining steam in the Senate but a source said a beer tax was unlikely to have the same traction.

"Every cigarette is a bad cigarette. It's not the same," said a source.

"Responsible consumption of distilled spirits, beer or wine is a socially acceptable part of a normal, healthy, adult lifestyle," Wojnar said.

"To indict these responsible consumers and their pocketbooks to pay for illicit drug use and alcohol abuse is not good public policy and is not in the public interest," he said.

Besides, there seems to be little support for the tax increase among lawmakers, who voters rebuked last year by approving an income tax cut the Legislature rejected.

And acting Gov. Jane M. Swift recently signed a no-new-tax pledge that aides said she has no intention of breaking -- even to provide treatment for drug and alcohol addiction.

"There are many worthy causes that the governor would consider funding through general fund revenues but she does not support imposing new taxes on the families of Massachusetts," said Swift spokesman Shawn Feddeman.

Even without Swift's veto threat, sources said, the liquor and retail lobbyists are powerful enough on Beacon Hill to keep the measure off her desk.

The State House News Service contributed to this report.


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