Proposed Beer Tax Increase Scrapped

By: Kallie Cart; The Associated Press Email
By: Kallie Cart; The Associated Press Email

UPDATE at 8pm Wednesday 2/24
CHARLESTON, W.Va. (AP) -- The plan to raise the tax on beer in West Virginia has gone flat.

The House Health and Human Resources Committee on Wednesday scrapped a bill to raise the tax in order to fund substance abuse programs.

Instead, the committee unanimously passed a bill that would allow those programs to be funded by money from a state Medicaid reserve fund and any other sources chosen by the Legislature.

The Medicaid reserve currently stands at more than $347 million. Gov. Joe Manchin has resisted using it in the past, because he says it will be needed in the future to pay the state's share of Medicaid costs.

Delegate Don Perdue, D-Wayne, says raising the beer tax would be impossible this year.

UPDATE from 11pm Story
CHARLESTON, W.Va. (WSAZ) -- A proposed tax on beer is brewing controversy. Some lawmakers in West Virginia have proposed a bill that will increase the tax on beer in order to fund rehabilitation programs for alcoholics and drug addicts.

The House Health and Human Resources Committee held a public hearing on the bill Monday. Beer distributors, convenience store owners and union leaders all spoke out against the bill. Several recovering alcoholics, however, urged lawmakers to pass the tax.

The proposal is to increase the tax by 3 cents on each bottle of beer. The tax now is 2 cents per bottle.

Delegate Don Perdue, D-Wayne County, and a sponsor of the bill, says West Virginia spends $1.8 billion each year on addiction.

"We know that we have thousands of untreated addicts in the state -- as many as 100,000," Perdue says. "We have to deal with this problem as it emerges."

Several agencies were at the public hearing Monday urging lawmakers to pass the bill. They say the state desperately needs more beds to treat patients with addiction.

But those in the beer business say beer drinkers shouldn't have to bear the brunt of the burden.

"Why should the average beer consumer, who drinks beer responsibly, pay for someone in Logan or Mingo County that abuses OxyContin or someone in Huntington that uses cocaine?" Jim Linsenmeyer says. He's the COO of Proud Eagle Inc., a Budweiser distributor.

Linsenmeyer says West Virginia will lose businesses to other states.

"We are the average entrepreneur who has gone out and taken a risk and borrowed money to open a business," he says. "Now we're chasing that business across state lines where we don't operate."

The tax will ultimately be passed onto the consumer.

The bill is a bipartisan bill, but still doesn't have much support.

Delegate Carol Miller, R-Cabell County, says she's trying to keep an open mind. She also says she wants to consider all options.

Miller is asking the committee to look at judicial reinvestment of funds. She says it costs about $28,000 a year to incarcerate someone and only $7,000 for rehabilitation. She wants to see if that money can be reassigned.

Perdue says in this election year, it will be a hard fight to get lawmakers to pass a tax increase.

CHARLESTON, W.Va. (AP) -- Lawmakers looking to raise West Virginia's beer tax could get an earful from the public.

A public hearing has been scheduled for Monday night on a House of Delegates bill that would raise the tax on beer from $5.50 a barrel to $19.25 per barrel.

That means the tax on 12-ounce bottles and cans would go from two cents to five cents.

Supporters say the measure would raise $20 million in revenue, which they want to spend on substance abuse prevention and treatment programs.

Opponents, including distributors and wholesalers, say the increase would drive West Virginia beer drinkers to other states.

Gov. Joe Manchin has said he's open to the idea of a beer tax increase.

The public hearing starts at 5:00 p.m. Monday.

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