Senate may kill proposed beer tax hike
Associated Press
COLUMBUS - Senate Republicans plan to eliminate a proposed doubling of the tax on beer and wine from the upcoming state budget and raise cigarette taxes even higher than a plan by Gov. Bob Taft to make up the difference, Senate President Bill Harris said Friday.
The Senate version of the two-year, $51 billion budget also will drop a planned tax on real estate investments, Harris said. In turn, lawmakers will provide an additional $6 million a year to children's hospitals that contend a funding freeze would jeopardize their ability to give care.
Taft and House Republicans want to increase cigarette taxes 45 cents a pack, while the Senate plan would add a further 25 cents to that proposal. The current tax is 55 cents a pack.
The elimination of the beer tax was a victory for the brewing and beer distribution industry, which used a letter-writing campaign and large newspapers ads to warn against job losses they estimated at 1,500 positions.
"We are sensitive to the fact that there could be a large number of jobs lost," said Harris, an Ashland Republican.
"It's not the objective of tax reform to lose jobs in Ohio."
The proposal also eliminates a proposed doubling of the tax on tobacco products such as snuff.
Whether the tax will stay out of the budget is unclear.
Taft proposed it and House Republicans went along with it in the spending plan they passed last month.
Taft opposes the Senate plan and is standing by his original proposal, said Taft spokesman Mark Rickel.
House Republicans are waiting to see details of the plan, said House GOP spokeswoman Karen Tabor.
The proposed beer tax increase would mean a total tax of about 20 cents on a six-pack and 12 cents on a typical bottle of wine.
The Senate plan would raise an additional $257 million above Taft's plan by increasing the cigarette tax to a total of 70 cents a pack.
The beer and wine tax would have raised about $51 million a year, while the real estate tax would raise about $41 million a year.
Advocates for the poor and for reducing cigarette use have been pushing for a
75-cent cigarette tax, with the money to go to social service and health-related programs.Taft and lawmakers have resisted earmarking the money that way.
Raising the tax an additional 25 cents is a good start, but the groups say spending the money on health programs will reduce the $1.1 billion Ohio spends on tobacco-related illnesses annually.
"By increasing the tax to at least 75 cents per pack and investing that money in tobacco prevention and health care, we can lower those costs even further," said Wendy Simpkins, a spokeswoman for the American Cancer Society.
Businesses with liquor permits are happy about the removal of the beer tax but disappointed with the cigarette tax increase.
"You're taking money out of our left pocket to put in our right pocket," said Jacob Evans, a lobbyist with the Ohio Licensed Beverage Association.
Publication date: 05-21-2005