Groups pushing for higher alcohol tax

INDIANAPOLIS -- Health and safety advocates want to increase taxes on every can of beer, glass of wine and bottle of liquor sold in Indiana by 50 percent to raise more money for alcohol-rehabilitation programs and efforts to curb underage drinking.\nBut winning higher alcohol taxes on the heels of last year's increases in business, cigarette, gambling and sales taxes will not be easy -- even though Indiana's alcohol taxes are generally lower than those of surrounding states.\nHealth and safety advocates say raising alcohol taxes to pay for treatment and education is not a stretch because it's already being done.\n"As you make addictive things more available, you're going to have an increase in the need for treatment," said Stephen McCaffrey, president and chief executive of the Mental Health Association in Indiana. "It makes logical sense to have a user fee that contributes to treatment."\nThose lining up behind higher alcohol taxes include the Indiana State Medical Association, the Governor's Council on Impaired and Dangerous Driving and the Governor's Commission for a Drug-Free Indiana.\nThese groups, led by the Mental Health Association and the Indiana Coalition to Reduce Underage Drinking, say Indiana is overdue for an increase. When inflation is figured in, revenue from alcohol taxes goes about half as far as it did in 1981, when taxes were last raised.\n"There is a need for additional sources of revenue for addictions services," said Rep. Charlie Brown, D-Gary, chairman of the House Public Health Committee.\nBut those advocating higher alcohol taxes will meet resistance from brewers and distillers, wholesale distributors, liquor store owners, grocers and restaurant and tavern operators.\n"Those are all good causes, but we'll have to fight it," said Hal Yeagy, owner of The Slippery Noodle Inn, a blues bar in downtown Indianapolis that employs 60 people.\nHe knows state funding is tight. But if beer, wine and liquor taxes go up, taverns would have to raise prices -- or absorb average increases of 13 cents per case of beer, 5 cents per bottle of wine and 26 to 61 cents for most bottles of liquor.\nIncreasing alcohol taxes holds appeal for House Democrats -- a chunk could go toward closing the $850 million deficit. But House Speaker B. Patrick Bauer of South Bend and Ways and Means Chairman William Crawford of Indianapolis say a 50 percent increase -- which could raise $18.8 million a year -- may go too far.\nLawmakers are sure to hear that from John Livengood, a former Indiana Democratic Party chairman who lobbies on behalf of the state's restaurants, hotels, taverns and liquor stores.\n"It seems like every time you turn around, somebody wants to tax the other guy," Livengood told The Indianapolis Star for a story published Sunday. "We don't think alcohol should be singled out. Why pick on one product?"\nCrawford, the new chairman of the House's budget-writing panel, said he will look first at other avenues to increase spending on alcohol treatment and education. But when it comes to taxing activities lawmakers want to discourage, he applies a simple test: Does the vice increase demand for government services, lower tax collections, or both?\nIf so, maybe it should be taxed, he said. For instance, people with alcohol problems often miss work -- losing taxable income -- and need more medical care.\nHouse Democratic leaders have persuaded the health and safety coalition not to submit an alcohol tax increase bill. Instead they're reserving the option of amending it into legislation later in the session.\n"There's not much support right now for another tax increase," said Rep. Sheila Klinker, D-Lafayette, who had planned to submit the bill. "I don't know whether the climate will change"