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Governors Push for Tax Increases on Alcohol

Facing growing fiscal crises, four Republican governors began the year calling for higher taxes, a sharp move away from their party’s tax-cutting ideology.

One common tax increase proposal relates to the excise tax on alcohol products. <?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” /> 
Ohio Gov. Bob Taft told legislators last week that the state’s short-term $720 million budget deficit necessitated increased taxes. 
He proposed raising $160 “in new revenue by raising the taxes on cigarettes by 45 cents a pack and doubling the tax on alcohol,” the Cincinnati Enquirer reported. “The change would increase the 10-cent tax on a six-pack of beer to about 20 cents.” 
In his State of the State address, Nevada Gov. Kenny Guinn proposed raising over $1 billion for the 2003-2005 budget, reported the <?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />Las Vegas Review-Journal.  
Alcohol taxes would rise 89 percent, representing a 4.5-cent increase in the price of a six-pack of beer and a 40-cent increase in a gallon of wine. 
Connecticut Gov. John Rowland proposed a doubling of his state’s excise tax on alcohol, according to a newsletter of the Center for Science in the Public Interest. 
“Two days after being sworn in as Georgia’s first Republican governor since Reconstruction, Gov. Sonny Perdue proposed one of the biggest tax increases in state history,” the Atlanta Journal-Constitution reported. 
Perdue’s proposal would increase the cost of a six-pack of beer about 14 cents and a bottle of wine 15 cents. The price of a liquor bottle would increase 50 cents. 
An Atlanta Journal-Constitution editorial called his proposed tax increases “unusual and courageous.”  
A number of Republican governors continued to oppose tax increases, including those on alcohol.  
South Carolina Gov. Mark Sanford said in his State of the State address that he had an aversion to tax increases and intended to keep his pledge not to raise taxes. However, democratic state Sen. Ralph Anderson introduced a bill to double the excise tax on beer, wine and liquor.  
Maryland Gov. Robert Ehrlich opposed increased excise taxes on alcohol, although Maryland’s taxes on beer and wine have not increased since 1972, according to Associated Press. 
The Baltimore Sun reported that state Delegate William Bronrott, D-Md., introduced a bill to increase the tax on beer, wine and liquor by 5 cents a glass.  
Denouncing efforts to raise liquor taxes, the Distilled Spirits Council said it was “unsound economic policy that will deeply hurt the state’s struggling hospitality industry.” 
In other action related to tax increases on alcohol, the Indianapolis Star urged the Indiana General Assembly to raise alcohol taxes, noting the state’s low rate of taxes on alcohol.  
The editorial said, “Not only would additional taxes on alcohol bring in needed revenue, they would likely lower alcohol consumption.”