The Herald Bulletin

Afternoon Update

Local Business

December 21, 2013

Alcohol tax hike may be tough to swallow

(Continued)

“I’ve come to the belief, based on best-practices evidence, that if we want to drastically reduce the crime rate and recidivism, we’ve got to provide local communities with the proper funding,” Steuerwald said.

It’s a tough assignment. The 2014 legislative session not only comes during an election year, but it comes during an off-budget year. The state’s biennial budget, which runs till June 2015, was locked into place in April 2013.

Senate Appropriations Chairman Luke Kenley said it would be tough to re-open the budget to raise or re-direct taxes. One reason is the historically unbudgeable alcohol tax itself.

Kenley took his own shot at raising the alcohol tax back in 2009, but his proposal to raise a penny on a bottle of beer went nowhere. One case made by opponents: Adding a penny of tax to the price of a beer may not seem like much, but bars that now charge $3 for a beer are more likely to charge $3.25 with a new tax. That fired up beer drinkers.

But Kenley also said the impact of the new criminal code law is still unknown since it’s yet to go into effect. He points to conflicting reports released earlier this year. One said the law will boost the costs to counties if judges divert more offenders into local programs; another said state prisons will bear the initial increase because judges will be reluctant to send offenders into treatment programs rather than jails.

“The alcohol tax may be a potential new revenue source at some point,” Kenley said. “But we have some bigger questions about the fiscal impact of the (criminal code) law that still need to be answered.”

Maureen Hayden covers the Statehouse for the CNHI newspapers in Indiana. She can be reached at maureen.hayden@indianamediagroup.com

Rates: Beverage, followed by tax per gallon Beer, flavored malt beverage, hard cider $0.115 Liquor, wine--21% or more alcohol $2.68 Wine--less than 21% alcohol $0.47 Mixed beverages - 15% or less alcohol $0.47 Malt $0.05 Sales in gallons: Beer Liquor Wine FY 2009: 127,076,043 9,902,448 9,164,814 FY 2010: 124,167,608 9,277,250 10,065,131 FY 2011: 124,537,930 9,462,475 11,279,964 FY 2012: 120,471,155 9,579,206 11,305,059 FY 2013: 117,226,081 10,431,703 11,468,804 Revenue from alcohol sales tax: FY 2009: $43,497,941 FY 2010: $40,134,262 FY 2011: $43,494,194 FY 2012: $44,154,161 FY 2013: $45,600,156 The source for this info on rates and revenue is the Indiana Department of Revenue

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