Rep. Terese Berceau’s Rep. Terese Berceau’s Beer Tax ProposalBeer Tax Proposal

2009-102009-10

Wisconsin has a serious alcohol problemWisconsin has a serious alcohol problem We We lead the nationlead the nation in moderate to heavy alcohol in moderate to heavy alcohol

consumption among consumption among pregnant womenpregnant women We have the We have the highest adult binge-drinking ratehighest adult binge-drinking rate We have theWe have the second highest college student second highest college student

binge-drinking ratebinge-drinking rate We have theWe have the 3 3rdrd highest underage drinking rate highest underage drinking rate in in

the country the country (26.17% between ages 12-20 over a one month (26.17% between ages 12-20 over a one month period)period)

We rankWe rank 48th worst 48th worst in the nationin the nation in alcohol-in alcohol-related per capita health care expensesrelated per capita health care expenses

In Wisconsin, alcohol and drug abuse is the In Wisconsin, alcohol and drug abuse is the 44thth leading cause of deathleading cause of death, behind heart disease, , behind heart disease, cancer and strokecancer and stroke

1) Report on the Findings of the Needs Assessment: Deliverable #3, FASD Prevention Initiative: Wisconsin Department of Health and Family Services, May 13, 2005

2) Wisconsin Epidemiological Profile on Alcohol and Other Drug Use, Wisconsin Department of Health Services, July 2008

3) Megan Twohey. (2005, February 23) “Binge-drinking students follow in adults’ footsteps: [final edition]. Milwaukee Journal Sentinel, p. 01, retrieved April 28, 2009

4) Substance Estimates from the 2004-2006 National Surveys on Drug Use and Health, U.S. Department of Health and Human Services, U.S. Substance Abuse and Mental Health Services Administration, 2007

5)Factbook on State Beer Taxes, Center for Science in the Public Interest: Alcohol Policies Project, July 2004

6)2002 Wisconsin Alcohol Traffic Facts Book, Wisconsin Department of Transportation

We drink and drive … and dieWe drink and drive … and die

We are tied for We are tied for 44thth (with Louisiana) for the (with Louisiana) for the highest percentage of driver fatalities in which highest percentage of driver fatalities in which blood alcohol concentrations exceed blood alcohol concentrations exceed .08.08

Only North Dakota, South Carolina and Only North Dakota, South Carolina and Delaware are worseDelaware are worse

We are tied for We are tied for 55thth for the highest percentage for the highest percentage of driver fatalities in which blood alcohol of driver fatalities in which blood alcohol concentrations exceed concentrations exceed .01.01

……and 41% of crash fatalities result from a BAC and 41% of crash fatalities result from a BAC of .08 or higherof .08 or higher

Traffic Safety Facts 2007 Data: Alcohol, NHTSA’s National Center for Statistics and Analysis, Washington, DC

Alcohol and Crime in WisconsinAlcohol and Crime in Wisconsin2007 Violations2007 Violations 35,65935,659 OWIs OWIs (Operating While Intoxicated)(Operating While Intoxicated)

5,0575,057 PACs PACs (Prohibited Alcohol Content)(Prohibited Alcohol Content)

480480 OWIs Causing InjuryOWIs Causing Injury 3838 OWIs Negligent HomicideOWIs Negligent Homicide 9797 OWIs in a Commercial VehicleOWIs in a Commercial Vehicle

41,331 Total41,331 Total (including 5 related charges)(including 5 related charges)

2007 Fatalities and Injuries2007 Fatalities and Injuries (last year for available (last year for available statistics)statistics)

337337 alcohol-relatedalcohol-related driving fatalitiesdriving fatalities 5,5525,552 alcohol-related driving injuriesalcohol-related driving injuries

Wisconsin Department of Transportation, Final Year Crash Statistics, 2007

What about underage drinking deaths?What about underage drinking deaths?

The National Safety Board The National Safety Board

and theand the Coalition to End Needless Death on our Coalition to End Needless Death on our

Roadways Roadways (a physician group) (a physician group)

listed Wisconsin in 2006 among theirlisted Wisconsin in 2006 among their “Fatal Fifteen”“Fatal Fifteen” states with the highest states with the highest underage drinking death ratesunderage drinking death rates

Wisconsin is among Wisconsin is among 1010 states on the list states on the list for the for the thirdthird consecutive year consecutive year

“Ten states make deadly fatal fifteen list for three years straight”, 11/06, END

In 2007, In 2007, 41,43541,435 Wisconsin Wisconsin teens and adults received teens and adults received

publicly funded treatment publicly funded treatment for for alcohol dependency or abuse alcohol dependency or abuse

Dept. of Health Services, Division of Mental Health and Substance Abuse Services, Bureau of Prevention, Treatment and Recovery

However, it is estimated However, it is estimated that that 457,000457,000 Wisconsin Wisconsin

residents who need alcohol residents who need alcohol treatment are not treatment are not

receiving itreceiving it

Dept. of Health Services, Division of Mental Health and Substance Abuse Services, Bureau of Prevention, Treatment and Recovery

Beer is the alcoholic drink most abusedBeer is the alcoholic drink most abused

60%60% of all beer is consumed in of all beer is consumed in amounts of amounts of five or morefive or more drinks per day drinks per day

It is the drink most commonly It is the drink most commonly consumed by people stopped for consumed by people stopped for impaired driving or involved in impaired driving or involved in alcohol-related crashesalcohol-related crashes

Beer accounts for Beer accounts for 81%81% of all alcohol of all alcohol that is drunk in hazardous amounts in that is drunk in hazardous amounts in the U.S.the U.S.

1) Greenfield, T.K. & Rogers, J.D. (1999). “Who drinks most of the alcohol in the U.S.? The policy implications,” Journal of Studies on Alcohol. 60.

2) Rogers, J.D., Greenfield T.K. “Beer drinking accounts for most of the hazardous alcohol consumption reported in the United States,” Journal of Studies on Alcohol. 60(6): 732-9, 1999

3) Insurance Institute for Highway Safety. “Q&A: Alcohol: General.” Arlington, VA: National Highway Insurance Institute for Highway Safety, June 2003

According to the UW PoliceAccording to the UW Police

41% 41% of all academic problems stem from of all academic problems stem from alcohol abusealcohol abuse

28% 28% who drop out of school may do so who drop out of school may do so because of alcoholbecause of alcohol

70%70% of violent behavior (fights, rapes) on of violent behavior (fights, rapes) on campus results from alcohol abusecampus results from alcohol abuse

59% 59% of fatal falls are related to alcoholof fatal falls are related to alcohol 50% 50% of all traffic fatalities are related to of all traffic fatalities are related to

alcoholalcohol 70% 70% of attempted suicides are alcohol-relatedof attempted suicides are alcohol-related

http://www.uwpd.wisc.edu/pamphlets/Alcohol.pdf

Alcohol is directly related to rapeAlcohol is directly related to rape 26%26% of the men who acknowledged of the men who acknowledged

committing sexual assault on a date reported committing sexual assault on a date reported being being intoxicatedintoxicated at the time of the assault at the time of the assault

21%21% of the college women who experienced of the college women who experienced sexual aggression on a date were sexual aggression on a date were intoxicatedintoxicated at the time of the assaultat the time of the assault

50% 50% of sexual assaults involving college of sexual assaults involving college students are associated with alcohol usestudents are associated with alcohol use

97,000 college students were raped or sexually assaulted in 2001 as a result of alcohol use

"Acquaintance Rape and Alcohol Consumption on College Campuses," by Antonia Abbey, PhD, Journal of American College Health. Vol. 39, January 1991

“Alcohol-Related Sexual Assault: A Common Problem among College Students” Antonia Abbey, Ph.D, citing Abbey et al. 1996a, 1998; Compenhaver and Brauerholz, 1991; Harrington and Leitenberg, 1994; Presley et al., 1997

“Wasting the Best & Brightest: Substance Abuse at America’s Colleges and Universities” March 2007, CASA

Alcohol is increasingly tied to child abuse Alcohol is increasingly tied to child abuse and domestic violenceand domestic violence

Adult alcohol abuse contributes to Adult alcohol abuse contributes to 50%50% of reported of reported instances of marital violence and instances of marital violence and 35%35% to to 70%70% of child of child abuse casesabuse cases

Another study shows that the percentage of batterers Another study shows that the percentage of batterers who are under the influence of alcohol when they assault who are under the influence of alcohol when they assault their partners ranges fromtheir partners ranges from 48%48% to to 87%87%,, with most with most research indicating aresearch indicating a 60%60% toto 70%70% rate of alcohol abuserate of alcohol abuse

92%92% of domestic abuse assailants reported use of of domestic abuse assailants reported use of alcohol or other drugs on the day of the assaultalcohol or other drugs on the day of the assault

An estimatedAn estimated 480,000480,000 children are mistreated each children are mistreated each year by a caretaker with alcohol or other drug problemsyear by a caretaker with alcohol or other drug problems

•Adger H Jr, “Problems of alcohol and other drug use and abuse in adolescents,” J Adolesc Health 1991; 12:606-613 •“The Relationship Between Parental Alcohol or Other Drug Problems & Child Maltreatment,” National Committee to Prevent Child Abuse (312) 663-3520 •Roberts, A. R. (1987). Psychosocial characteristics of batterers: A study of 234 men charged with domestic violence offenses. Journal of Family Violence, 2 (1), 81-93. •Bijur, P.E., M. Kurzon, M.D. Overpeck, and P.C. Scheidt. 1992. “Parental alcohol use, problem drinking and child injuries,” Journal of the American Medical Association 23:3166-3171 •“Collaboration, coordination and cooperation: helping children affected by parental addiction and family violence. New York: Children of Alcoholics Foundation,” Children of Alcoholics Foundation, Inc. 1996

How much beer does Wisconsin consume?How much beer does Wisconsin consume?

Wisconsin ranks Wisconsin ranks 55thth highest per-capita for highest per-capita for alcohol consumption from beeralcohol consumption from beer

The average Wisconsinite consumes The average Wisconsinite consumes 1.561.56 gallons of pure ethanol annually from beergallons of pure ethanol annually from beer

Only Only NevadaNevada, , New HampshireNew Hampshire,, LouisianaLouisiana and and MontanaMontana rank higherrank higher

Wisconsin ranks Wisconsin ranks 44thth highest per-capita for highest per-capita for alcohol consumption from alcohol consumption from allall alcoholic alcoholic beveragesbeverages

On average, Wisconsin residents consume On average, Wisconsin residents consume 2.962.96 gallons of ethanol per person, per yeargallons of ethanol per person, per year

Beaten only by Beaten only by New HampshireNew Hampshire, , NevadaNevada and and DelawareDelaware

NNeevv

National Institute on Alcohol Abuse and Alcoholism, Surveillance Report #85: Apparent Per Capita Alcohol Consumption: National, State, and Regional Trends, 1977-2006, November 2008

Is the beer industry innocent?Is the beer industry innocent?For 2001 consumer expenditures for alcohol For 2001 consumer expenditures for alcohol

nationallynationally (the last year for available data)(the last year for available data)

1717.5.5%% went to underage drinking (went to underage drinking ($22.5$22.5 billion)billion)

20.1%20.1% went to adult pathological drinking went to adult pathological drinking (($25.8$25.8 billion) billion)

37.8%37.8% of alcohol (by cost) was misused or of alcohol (by cost) was misused or illegally consumedillegally consumed

A 1999 analysis showed that A 1999 analysis showed that 50.1%50.1% (by (by volume) is misused or illegally consumed (volume) is misused or illegally consumed ($56.9$56.9 billion)billion)

The alcohol industry is The alcohol industry is financially dependentfinancially dependent upon underage and pathological drinkingupon underage and pathological drinking

1) “The Commercial Value of Underage and Pathological Drinking to the Alcohol Industry,” The National Center on Addiction and Substance Abuse at Columbia University, May 2006

2) “Alcohol consumption and expenditures for underage drinking and about excessive drinking,” The National Center on Addiction and Substance Abuse at Columbia University, February 26, 2003

The Berceau ProposalThe Berceau Proposal

Tax per Tax per BarrelBarrel

Tax Tax per per GalloGallonn

Tax per Tax per Six-PackSix-Pack

Tax Tax per 12 per 12 oz. oz. BottleBottle

Annual Annual Revenue Revenue (in (in millions)millions)

CurrentCurrent $2.00$2.00 6.5¢6.5¢ 3.6¢3.6¢ 0.6¢0.6¢ $9.76$9.76

ProposeProposedd

$10.0$10.000

32.332.3¢¢

18¢18¢ 3¢3¢ $48.8$48.8

What does the Berceau proposal mean in terms of What does the Berceau proposal mean in terms of

the cost of a beer?the cost of a beer? The average price of a 12 oz. bottle of domestic The average price of a 12 oz. bottle of domestic

beer in Wisconsin is beer in Wisconsin is $0.985$0.985 For a bottle of imported beer: For a bottle of imported beer: $1.20$1.20 For a bottle of craft beer: For a bottle of craft beer: $1.08$1.08 The Wisconsin beer The Wisconsin beer tax accounts fortax accounts for $0.006 $0.006 of of

that pricethat price The Berceau proposal would addThe Berceau proposal would add onlyonly to to

eacheach A A 2.4%2.4% increase for a domestic beer increase for a domestic beer A A 2%2% increase for an imported beer increase for an imported beer A A 2.2%2.2% increase for a craft beer increase for a craft beer

2.42.4¢¢

Scott Stenger, lobbyist for the Miller Brewing Company

Under the Current State Beer Tax:Under the Current State Beer Tax:

If you drink If you drink by the end of the week …by the end of the week …you will have paid you will have paid in state in state

taxtax

Under Rep. Berceau’s Proposal:Under Rep. Berceau’s Proposal:

If you drink If you drink a six-pack a daya six-pack a day ……by the end of the week …by the end of the week …it will cost you an additionalit will cost you an additional

a six-pack a day a six-pack a day ……

25¢25¢

$1$1

What does this mean for the heavy drinker?

Beer tax revenue has dwindledBeer tax revenue has dwindled

The state beer tax has not been raised The state beer tax has not been raised since since 19691969 – the year that Neil Armstrong – the year that Neil Armstrong walked on the Moonwalked on the Moon

It has lost It has lost 83%83% of its value due to inflation of its value due to inflation If adjusted for inflation, beer would be If adjusted for inflation, beer would be

taxed at over taxed at over $11.62$11.62 a barrel, instead of a barrel, instead of $2$2 currently currently

Rep. Berceau’s proposed Rep. Berceau’s proposed $8$8 increase per increase per barrel would raise million annuallybarrel would raise million annually

$40$40

Factbook on State Beer Taxes, Center for Science in the Public Interest, Alcohol Policies Project, August 2004

How much do we collect?How much do we collect?

Wisconsin residents pay about Wisconsin residents pay about 3.63.6¢¢ per six-pack (per six-pack ($2.00$2.00 a barrel) a barrel)

The Wisconsin state beer tax raised The Wisconsin state beer tax raised $9.62$9.62 million in FY2007-08 million in FY2007-08

It’s estimated to raise only It’s estimated to raise only $10 $10 millionmillion in FY2008-09 & FY2009- in FY2008-09 & FY2009-20102010Wisconsin Legislative Fiscal Bureau, Informational Paper #8: Alcohol and Tobacco Taxes, January 2009

Wisconsin’s beer tax in contextWisconsin’s beer tax in context Wisconsin has the third lowest beer tax in the Wisconsin has the third lowest beer tax in the

nation (nation (6.56.5¢¢ per gallon) per gallon)(Major beer producing state)(Major beer producing state)

Second Lowest: Missouri (Second Lowest: Missouri (6.06.0¢¢ per gallon) per gallon)(headquarters of Anheuser-Busch)(headquarters of Anheuser-Busch)

Lowest: Wyoming (Lowest: Wyoming (1.91.9¢¢ per gallon) per gallon)

Wisconsin Legislative Fiscal Bureau, Informational Paper #8: Alcohol and Tobacco Taxes, January 2007

Our neighboring states charge two Our neighboring states charge two to three times moreto three times more

Illinois: Illinois: 1919¢¢ per gallon per gallon Minnesota: Minnesota: 1515¢¢ Indiana: Indiana: 1212¢¢ Michigan: Michigan: 2020¢¢

Wisconsin Legislative Fiscal Bureau, Informational Paper #8: Alcohol and Tobacco Taxes, January 2009

Other states charge Other states charge muchmuch more more

Alaska: per gallonAlaska: per gallon Hawaii:Hawaii: South Carolina:South Carolina: New Mexico:New Mexico: Oklahoma:Oklahoma:

$1.0$1.07793¢93¢

77¢ 77¢

4141¢¢4040

¢¢

Wisconsin Legislative Fiscal Bureau, Informational Paper #8: Alcohol and Tobacco Taxes, January 2009

Most beer produced in WI is not taxed at all!Most beer produced in WI is not taxed at all! Wisconsin beer producers have two major tax Wisconsin beer producers have two major tax

breaks: breaks: Beer produced in Wisconsin that is exported Beer produced in Wisconsin that is exported

elsewhere is elsewhere is exemptexempt from the WI beer tax from the WI beer tax Producers that brew less than Producers that brew less than 300,000300,000 barrels a year, barrels a year,

pay only pay only halfhalf of the tax on the first of the tax on the first 50,000 50,000 barrelsbarrels

Wisconsin produced Wisconsin produced 12.112.1 million barrels of beer million barrels of beer in 2008in 2008

We exported We exported 9.59.5 million barrels ( million barrels (78.7%78.7%), all ), all from WI taxation from WI taxation

The remaining The remaining 2.62.6 million barrels were taxed, million barrels were taxed, and consumed in-stateand consumed in-state

So, only So, only 21.3 %21.3 % of the beer produced in of the beer produced in Wisconsin was subject to the WI beer taxWisconsin was subject to the WI beer tax

OnlyOnly 19% 19% was taxed at the was taxed at the 100%100% rate rate

exempexemptt

Wisconsin Department of Revenue, 2009

Most Wisconsin beer producers pay Most Wisconsin beer producers pay only half of our tax Most Wisconsin only half of our tax Most Wisconsin

beer producers pay only half of our taxbeer producers pay only half of our tax There were There were 87 87 Wisconsin Beer Producers Wisconsin Beer Producers

in 2008in 2008 7878 were taxed at the were taxed at the 50%50% beer tax rate beer tax rate 44 were taxed at a combination of the were taxed at a combination of the

100%100% and and 50%50% rate rate 55 were taxed entirely at the were taxed entirely at the 100%100% rate rate The top four producers account for The top four producers account for 91%91%

of all revenue from in-state producersof all revenue from in-state producers

Wisconsin Department of Revenue, 2007

Most Wisconsin beer producers pay Most Wisconsin beer producers pay little in taxeslittle in taxes

Between $0-$100Between $0-$100 2626 breweries breweries Between $100-$1,000Between $100-$1,000 3535 breweries breweries Between $1,000-$5,000Between $1,000-$5,000 1313 breweries breweries Between $5,000-$10,000Between $5,000-$10,000 2 breweries2 breweries Between $10,000-$30,000Between $10,000-$30,000 5 breweries5 breweries Between $30,000-$50,000Between $30,000-$50,000 0 breweries0 breweries Between $50,000-$100,000Between $50,000-$100,000 0 brewery0 brewery Between $100,000-$1,000,000Between $100,000-$1,000,000 4 breweries4 breweries Over $1,000,000Over $1,000,000 2 brewery (Miller)2 brewery (Miller)

Wisconsin Department of Revenue, 2007

How does the beer tax compare How does the beer tax compare to other Wisconsin taxesto other Wisconsin taxes

… … and their and their increases?increases?

Beer Tax Increases (per gallon)

$-

$0.05

$0.10

$0.15

$0.20

$0.25

No increase in 40 years!

QuizQuizHow many six-packs must be sold to How many six-packs must be sold to produce the same state excise tax produce the same state excise tax

revenue generated by revenue generated by oneone carton of carton of cigarettes?cigarettes?

492492After the most recent cigarette state tax increase to $1.77 per pack After the most recent cigarette state tax increase to $1.77 per pack

of cigarettesof cigarettes

Arguments against increasing Arguments against increasing the Wisconsin beer tax, and the Wisconsin beer tax, and

our responsesour responses

The beer tax is paid by those The beer tax is paid by those who consume beer who consume beer

regardless of their income regardless of their income

It is a regressive taxIt is a regressive tax

Argument 1Argument 1

Our Response:Our Response: AllAll sales taxes, fees and fines are regressive as a matter of sales taxes, fees and fines are regressive as a matter of

practice. Only income and property taxes are consciously practice. Only income and property taxes are consciously progressively structured. For example…progressively structured. For example…

Hunting and fishing licenses are paid by those who hunt and Hunting and fishing licenses are paid by those who hunt and fish,fish, regardless of incomeregardless of income

Drivers’ license and license plate fees are paid by those who Drivers’ license and license plate fees are paid by those who drive,drive, regardless of incomeregardless of income

It is a generally accepted concept of fairness that those It is a generally accepted concept of fairness that those who participate in an activity should help shoulder the who participate in an activity should help shoulder the costs that activity incurscosts that activity incurs

Are the opponents of the beer tax advocating a major re-write Are the opponents of the beer tax advocating a major re-write of our tax code to make all taxes, fees and fines progressive? of our tax code to make all taxes, fees and fines progressive?

I don’t think soI don’t think so

Argument 2Argument 2

Beer is a blue-collar drinkBeer is a blue-collar drink

The beer tax hits average working The beer tax hits average working people of modest means hardest, people of modest means hardest, because they drink the most beerbecause they drink the most beer

Our Response:Our Response:

Beer consumption is Beer consumption is approximately evenly split approximately evenly split

across upper and lower across upper and lower income levelsincome levels

FalseFalse

AA

BeerSoaksAmerica.org; “Beer Consumption in America, citing Adams Beer Handbook, 2006

People earning People earning $50,000$50,000 or less consume or less consume 39%39% of the regular beer in the U.S. of the regular beer in the U.S.

While those earning While those earning $75,000$75,000 or more drink or more drink 41%41% of the regular beer of the regular beer

For light and imported beer: lower income For light and imported beer: lower income people (making people (making $30,000$30,000 or less) are or less) are 11%11% to to 53%53% less likely than upper income less likely than upper income people to drink these types of beerpeople to drink these types of beer

In fact, beer is consumed somewhat In fact, beer is consumed somewhat more by the upper classesmore by the upper classes

BeerSoaksAmerica.org; “Beer Consumption in America, citing Adams Beer Handbook, 2006

60%60% of regular beer of regular beer consumers earn incomes ofconsumers earn incomes of

$50,000$50,000 or moreor more

While, Wisconsin’s median While, Wisconsin’s median household income is only abouthousehold income is only about

$45,000$45,000BeerSoaksAmerica.org; “Beer Consumption in America, citing Adams Beer Handbook, 2006

U.S. Census Bureau, 2005

Our Response:Our Response:

The The averageaverage drinker will drinker will not bear the brunt of a not bear the brunt of a

beer tax increasebeer tax increase

BB

Beer producers are not Beer producers are not so concerned with the so concerned with the

“average” drinker“average” drinker

They know that most of their They know that most of their revenues come from revenues come from heavy drinkers heavy drinkers

price-insensitiveprice-insensitive

The heaviest drinking The heaviest drinking 10%10% of of beer drinkers consume a beer drinkers consume a

whopping of reported whopping of reported beer consumptionbeer consumption

42%42%

Center for Science in the Public Interest: Fact Sheet of Beer Consumption and Taxes, August 2003

of drinkers consume of drinkers consume of all beer!of all beer!85%85%

20%20%

Greenfield, T.K. & Rogers, J.D. (1999). “Who drinks most of the alcohol in the U.S.? The policy implications,” Journal of Studies on Alcohol. 60.

The moderate-drinking majority The moderate-drinking majority of drinkers consumes, on of drinkers consumes, on average, relatively little alcoholaverage, relatively little alcoholand pays a and pays a amount of alcohol taxes amount of alcohol taxes

negligiblenegligible

Between 1984 & 2009, the CPI Between 1984 & 2009, the CPI growth for all products was growth for all products was about about 16%16% higher than for beer higher than for beer consumed at home and consumed at home and 71%71% higher than for beer consumed higher than for beer consumed outside of the homeoutside of the home

US Department of Labor, Bureau of Labor Statistics, Consumer Price Index, 2009

Heavy and addicted drinkers – who Heavy and addicted drinkers – who account for most of the beer account for most of the beer

consumption in the U.S. – rightly pay consumption in the U.S. – rightly pay most in beer taxes, since their drinkingmost in beer taxes, since their drinking

imposes the greatest cost to societyimposes the greatest cost to society

If a per bottle tax If a per bottle tax increase will cause you increase will cause you financial burdenfinancial burden

……. You have worse . You have worse problems to deal with than problems to deal with than

the beer taxthe beer tax

2.4¢2.4¢

Argument 3Argument 3

A beer tax will hurt A beer tax will hurt economic development economic development

and cost jobs in and cost jobs in WisconsinWisconsin

Our ResponseOur Response Claims of job loss are not supported by the Claims of job loss are not supported by the

evidence evidence

Between Between 19901990 and and 20002000, beer industry , beer industry wholesale trade employment by more wholesale trade employment by more than than 8,0008,000 jobs nationally jobs nationally

Including increases between Including increases between 19901990 and and 19921992 – a year before and after the last – a year before and after the last federal beer tax increase!federal beer tax increase!

……an increase that was that an increase that was that proposed by Rep. Berceauproposed by Rep. Berceau

almost equal to almost equal to

roserose

Bureau of Labor Statistics of the U.S. Department of Labor

Beer Lobbyists Tell Us That the Industry Provides Beer Lobbyists Tell Us That the Industry Provides Plenty of Jobs …We Don’t DisagreePlenty of Jobs …We Don’t Disagree

Emergency Medical Technicians

Police Officers

Hospital Trauma TeamsTow Truck

Drivers

Insurance Adjusters

AODA Counselors

Physical Therapists

Plastic Surgeons

Marriage Counselors

Repossession Agencies

Collection Agencies

Funeral Directors

Prison Guards

Auto Body Shops

Judges

Firefighters

Academic Counselors

Coroners

Court Commissioners

Jailers

Bailiffs

Social Workers

Psychiatrists

Ambulance Drivers

Consider the effects of that federal Consider the effects of that federal beer tax increase of 1991beer tax increase of 1991

Economists at the National Bureau of Economists at the National Bureau of Economic Research estimate that the Economic Research estimate that the 1991 increase in the federal beer tax 1991 increase in the federal beer tax saves more than saves more than 600 young lives600 young lives in in alcohol-related crashes each yearalcohol-related crashes each year

In the two years following the In the two years following the increase, syphilis rates fell nearly increase, syphilis rates fell nearly 40%40% and gonorrhea rates declined nearly and gonorrhea rates declined nearly 30%30%,, attributable to the taxattributable to the tax

Grossman, M., Chaloupka, F. J., Saffer, H., & Laixuthai, A. (1994) “Effects of alcohol price policy on youth: A summary of economic research”. Journal of Research on Adolescence, 4(2): 347-364.

Chesson, H., Harrison, P. & Kassler, W.J. (2000). Sex under the influence: The effect of alcohol policy on sexually transmitted disease rates in the United States. Journal of law and Economics. XLIII:215-238.

Argument 4Argument 4

A beer tax increase will A beer tax increase will cause businesses to cause businesses to move to more tax-move to more tax-

friendly statesfriendly states

Our ResponseOur Response

Historically this just doesn’t hold. Despite Historically this just doesn’t hold. Despite Wisconsin’s low beer tax, we have seen the Wisconsin’s low beer tax, we have seen the relocationrelocation of Schlitz (1981), Pabst (1996) and of Schlitz (1981), Pabst (1996) and Miller’s Headquarters (2008)Miller’s Headquarters (2008)

Wisconsin has the Wisconsin has the 1010thth highest number of highest number of microbreweries per capita. This is great for microbreweries per capita. This is great for Wisconsin jobs! But note that Wisconsin jobs! But note that 8 8 of the states with of the states with more microbreweries per capita have higher beer more microbreweries per capita have higher beer taxes than WI. Once again, this shows that taxes than WI. Once again, this shows that a higher beer tax is not causing breweries to flock to other states with lower taxes. 1)“Beer town no more: Milwaukee Struggles with its image” Daniel LeDuc, Wisconsin State Journal. Madison, Wis.: Dec

9, 19962)JUST LIKE OLD TIMES WITH SCHLITZ; "THE BEER THAT MADE MILWAUKEE FAMOUS" IS ON GROCERY SHELVES AND IN TAVERNS IN MILWAUKEE ONCE AGAIN, AND THAT'S BRINGING BACK MEMORIES FOR A LOT OF MILWAUKEEANS. EMILY FREDRIX Associated Press. Wisconsin State Journal. Madison, Wis.: Aug 2, 20083) Last call dawns for Miller Brewing; Merger with Coors becomes official TOM DAYKIN. Milwaukee Journal Sentinel. Milwaukee, Wis.: Jul 1, 2008.4) Brewers Association, Breweries Per Capita 20085) Factbook on State Beer Taxes

Argument 5Argument 5

The cost of alcohol treatment The cost of alcohol treatment programs should be shared by programs should be shared by allall taxpayers – not borne solely by taxpayers – not borne solely by

those who can least afford itthose who can least afford it

A beer tax penalizes the A beer tax penalizes the responsible consumerresponsible consumer

Our ResponseOur Response

do you think is paying for do you think is paying for Wisconsin’s multi-million treatment Wisconsin’s multi-million treatment budget now?budget now?

All Wisconsin taxpayers All Wisconsin taxpayers Drinkers and non-drinkers alikeDrinkers and non-drinkers alike Those who can and can’t afford itThose who can and can’t afford it

Everyone is currently paying for the costs Everyone is currently paying for the costs incurred by a minority ofincurred by a minority of

Is this fair?Is this fair?

WhWhoo

excessive drinkersexcessive drinkers

What are the costs?What are the costs? The The $9.7 million$9.7 million raised by the state beer tax last raised by the state beer tax last

year covered only a fraction of treatment costsyear covered only a fraction of treatment costs In 2007, alcohol related crashes and medical In 2007, alcohol related crashes and medical

conditions in Wisconsin cost taxpayers conditions in Wisconsin cost taxpayers $935 $935 millionmillion

For FY07 The UW Healthcare system provided For FY07 The UW Healthcare system provided $6 $6 millionmillion worth of charity to intoxicated inpatients worth of charity to intoxicated inpatients

It doesn’t count the estimated It doesn’t count the estimated $2.7 billion$2.7 billion in: in: Policing and court costsPolicing and court costs Incarceration costsIncarceration costs Traffic crash costsTraffic crash costs Lost productivity costsLost productivity costs Academic failure costsAcademic failure costs Premature death costsPremature death costs ALL ALCOHOL-

ALL ALCOHOL-

RELATED

RELATEDNational Institute on Alcohol Abuse and Alcoholism. (2000). 10th Special Report to the U.S. Congress on Alcohol and Health. Chapter 6. NIH Publication No. 00-1583. Rockville, MD: U.S. Department of Health and Human Services.

“Health Care Coalition hopes to toughen state’s alcohol laws” Gina Barton, Milwaukee Journal Sentinel, Nov. 10, 2008

What is the average What is the average cost for you? cost for you?

Each Wisconsin resident pays only Each Wisconsin resident pays only $1.82$1.82 a year in beer taxes a year in beer taxes

But also But also $18.64$18.64 in alcohol treatment in alcohol treatment costscosts

… … and and $154$154 in alcohol-related in alcohol-related healthcare costs healthcare costs (($86$86 specifically from specifically from beer)beer)

… … and and $500$500 in alcohol-related in alcohol-related criminal justice and societal costscriminal justice and societal costsCenter for Science in the Public Interest: Alcohol Policies Project, Handbook on State Beer Taxes, August 2004

Gogek, Jim, “Taxing the Binge,” The New York Times, 3/13/03

National Institute on Alcohol Abuse and Alcoholism. (200). 10th Special Report to the U.S. Congress on Alcohol and Health. Chapter 6. NIH Publication No. 00-1583. Rockville, MD: U.S. Department of Health and Human Services.

Pop QuizPop Quiz

What was the total cost of an alcohol What was the total cost of an alcohol related traffic crash in 2007?related traffic crash in 2007?

An estimated An estimated $70,270$70,270

Wisconsin Department of Transportation, using National Safety Council’s unit cost estimates, 2009

Alcohol abuse and addiction cost the Alcohol abuse and addiction cost the nation an estimated nation an estimated $220$220 billion in billion in 20052005

……moremore than cancer ( than cancer ($196$196 billion) billion)

……and and moremore than obesity ( than obesity ($133$133 billion) billion)

How expensive is alcohol abuse nationally?How expensive is alcohol abuse nationally?

“The Commercial Value of Underage and Pathological Drinking to the Alcohol Industry,” The National Center on Addiction and Substance Abuse at Columbia University, May 2006

Which states earmark the beer tax Which states earmark the beer tax for alcohol treatment?for alcohol treatment?

ArizonaArizona Drug and Alcohol Treatment FundDrug and Alcohol Treatment Fund IdahoIdaho Alcoholism Treatment AccountAlcoholism Treatment Account KansasKansas Community Alcoholism and Intoxication Programs Community Alcoholism and Intoxication Programs

FundFund MississippiMississippi Alcoholism Treatment and Rehabilitation FundAlcoholism Treatment and Rehabilitation Fund MontanaMontana Treatment, rehabilitation, and prevention of Treatment, rehabilitation, and prevention of

alcoholism and alcoholism and chemical dependencychemical dependency New JerseyNew Jersey Alcohol Education, Rehabilitation, and Enforcement Alcohol Education, Rehabilitation, and Enforcement

FundFund NevadaNevada Increase services for prevention and treatment of Increase services for prevention and treatment of

alcoholism alcoholism and alcohol abuseand alcohol abuse OregonOregon Mental Health, Alcoholism and Drug Services Mental Health, Alcoholism and Drug Services

AccountAccount TennesseeTennessee To assist municipalities and counties in carrying out To assist municipalities and counties in carrying out

the the provisions of the state’s 1973 Comprehensive provisions of the state’s 1973 Comprehensive Alcohol and Drug Alcohol and Drug Treatment ActTreatment Act

UtahUtah Programs or projects related to prevention, treatment, Programs or projects related to prevention, treatment, detection, and prosecutiondetection, and prosecution

Center for Science in the Public Interest: Alcohol Policies Project, Factbook on State Beer Taxes, August 2004

Some positive Some positive unintended unintended consequences of raising the beer taxconsequences of raising the beer tax

For everyFor every 1%1% increase in the price of beer, the traffic fatality rate increase in the price of beer, the traffic fatality rate declines bydeclines by 0.9% 0.9% (Ruhm, 1996)(Ruhm, 1996)

The Centers for Disease Control and Prevention found that a beer-The Centers for Disease Control and Prevention found that a beer-tax increase oftax increase of 2020¢¢ per six-pack would reduce gonorrhea rates byper six-pack would reduce gonorrhea rates by 8.9%8.9% and syphilis rates byand syphilis rates by 32.7% 32.7% (Chesson et al, 2000)(Chesson et al, 2000)

A A 10%10% increase in beer taxes would reduce the overall number of increase in beer taxes would reduce the overall number of students involved in some sort of violent behavior by aboutstudents involved in some sort of violent behavior by about 4% 4% (Grossman and Markowitz, 2001)(Grossman and Markowitz, 2001)

If the alcohol in beer were taxed at the same rate as alcohol in If the alcohol in beer were taxed at the same rate as alcohol in distilled spirits, the number of fatalities among 18 to 20 year-olds distilled spirits, the number of fatalities among 18 to 20 year-olds in traffic crashes would decrease byin traffic crashes would decrease by 21% 21% (Grossman, (Grossman, Chaloupka, 1994)Chaloupka, 1994)

Higher beer taxes lead to significant reductions in crime, Higher beer taxes lead to significant reductions in crime, particularly under 21particularly under 21 (Staffer, 2001)(Staffer, 2001)