Tax hikes on beer, cider and wine are “off the table,” Gov. Kate Brown said Friday.
The Oregon Health Authority wanted to increase taxes on beer, wine and cider by 10 percent, which officials said could raise nearly half a billion dollars over two years.
The agency also proposed significant tobacco tax increases as a strategy to deter tobacco’s use and improve public health.
The Health Authority’s proposal became public two weeks before Brown was re-elected. Her office at the time declined to say whether she supported boosting alcohol taxes.
That changed Friday.
“I’ve been saying nothing’s off the table,” Brown said, “but that one’s off the table.”
The health department said Friday its current efforts to prevent alcohol abuse don’t require additional money to continue.
“Director Allen asked staff for budget ideas to encourage input and creative thinking,” Robb Cowie, a spokesman for the Oregon Health Authority, said in a written statement. “The beer and wine tax proposal was suggested as one of many ideas to address alcohol overconsumption as part of the Oregon Health Authority’s ongoing prevention efforts, which do not depend on additional revenue to continue.”
The state hasn’t increased beer taxes since 1977 or taxes on wine since 1983.
But the money such increases would generate isn’t worth the fight, Brown said.
“The challenge for that particular arena is that we just don’t get enough bang for the buck,” Brown said. “That it is, really, it’s a tough fight in the Legislature and we’re not likely to be successful at the ballot.”
Craft beer and fine wine are big business in Oregon.
Over the past 10 years, the alcohol industry has added more jobs than the high-tech sector, state economists say.
But Oregonians are also suffering more from alcohol-related ailments. Alcohol overuse is the state’s third most common cause of preventable death. Related deaths in Oregon have climbed about 38 percent since 2001.
The governor said she would support higher taxes on tobacco.
The Health Authority’s proposal to do just that would raise an estimated $293 million over two years through a $2 per pack tax on cigarettes and a tax on “inhalant delivery systems” such as e-cigarettes. It also would remove the 50-cent limit on taxes per cigar.
Two years ago, Brown unsuccessfully proposed raising cigarette taxes by 85 cents per pack. The state tax remains at $1.33 per pack.
Brown plans to release her recommended state budget for the next two years on Nov. 28.
The governor wouldn’t say whether that would include higher tobacco taxes, but said she supports the concept and thinks it could help fund the Oregon Health Plan.
“I believe strongly that increased tobacco revenue needs to be part of the solution in developing a comprehensive, sustainable funding source for the Oregon Health Plan,” Brown said.
The health plan is the state’s Medicaid program. It’s facing an $830 million shortfall in the next two-year budget.