WTF John?
8:23-HB 212, raises tax on beer 2 cents a can, 15-cent increase on wine, increase on spirits as well, expected to raise over $4 mill this year. (snip)
Roll call: Once again, the Rethugs are getting a complete pass. Hard to believe that the D’s are letting them get away with this. Presumably, once again, Cathcart will change his vote to ‘yes’, enabling the bill to pass. Waiting a l-o-o-o-ng time to announce the roll call…Longhurst changes from ‘yes’ to ‘no’, which is the parliamentary maneuver to enable the bill to be resurrected, bill defeated. One Democrat, Rep. Kowalko, voted ‘no’. Hard to explain that one. There was reportedly one R prepared to switch if it was the deciding vote.
You said it. How does John think that this helps get closer to a balanced budget? Is his commitment to the poor downtrodden state workers second to his commitment to the $11.29 12 pack of Bud Light?
Nobody is a bigger Kowalko fan that me and I don’t get this. The $4 million John just cut out of the revenue package needs to come from somewhere.
I would assume it’s opposition to regressive taxes.
If it was 15 cents on beer and 2 cents on wine you might have a point.
This bill threatens jobs. I couldn’t give a rat’s tail about Anheuser-Busch or NKS but they employ many people whose jobs would be at risk if sales fell 15% as they did the last time we imposed this type tax. The last vote I cast that would tax an industry that can “afford” it was the Racino’s. Last week Delaware Park, obviously an industry that can “afford” this type of tax laid off 35 hourly employees and 10 salaried employees. Dover Downs and Harrington have also had significant job losses. The “companies” that I think can afford revenue increases in these terrible economic times are the richest 1500 incorporated in De. (minimal stock-asset value of $660 million). An additional $5,000 per year increase in the franchise tax cap would produce nearly double the revenue in FY10 that the alcohol tax would with no job losses. Also might I suggest a $25 yearly increase in LLC fees that would raise $12.5 million, more than double the alcohol tax again with no reasonable risk of layoffs. These proposals have been rejected out of hand and we are still left with an additional $875 per year burden on a $35,000 state worker (equal to a 65% income tax increase) in this budget proposal.
John K.
it’s a tough job, thanks for your hard work John. Good luck tomorrow, too.
and thanks for the note.
John I usually think you make good points, but you’ve been sold a bill of goods on this one by the Teamsters and distributors. Even with this $.02 increase a can, we’re still much lower than neighboring states so people won’t cross the border. Further overall demand for alcohol doesn’t go down when prices increase a little. If anyone changes consumption patterns they’ll just buy a cheaper beer rather than refraining from drinking. Which brings me to my final point, if alcohol demand was so dependent on price you wouldn’t have seen the phenominal rise of speakeasies during prohibition… Demand barely decreased at all when alcohol was illegal. You may misguidedly think that you’re fighting for the little guy but you’re unintentionally carrying water for the distributors. And you shot down a fairly progressive tax which taxes wine at a higher rate than beer, but voted for several less progressive taxes… Do the right thing and switch your vote, so we don’t end up cutting something really important.
“Even with this $.02 increase a can, we’re still much lower than neighboring states so people won’t cross the border.”
If we’re much lower won’t that make people want to cross the border? What am I missing in this comment?
While I am in favor of the cigarette tax increase, Kowalko’s support for that increase is puzzling, given his opposition to regressive taxation. Voting to increase the cigarette tax arguably threatens sales and jobs as much as the alcohol tax increase. Sounds more like he got pressured by the Teamster’s — who have been omnipresent in Legislative Hall the past three weeks. Sad to see this “champion of the little guy” is just a tool of the unions.
How about some efficiencies? Tax tax tax… hurry hurry hurry.
I don’t much about the inner workings of taxation rates,but it is clear that John Kowalko is the one of the few legislators who will take the time to spell out where they stand and share that with the public.
I may agree or disagree with his stand on any specific issue,but I admire his personal effort at transparency.
I also think he raises some good points on maintaining livable wage jobs for working classs people.
So its o.k. to make really dumb decisions, just as long as your transparent about why? Again, I question if he’s really being transparent — if his logic held, he would have voted against the cigarette tax increase as well. Teamsters . . . .
Anonymice:
Where are you getting the “fact” that our excise tax rates are lower than Maryland’s? That’s a flat-out lie. The state-by-state rates can be viewed at:
http://www.taxfoundation.org/taxdata/show/245.html
On spirits/wine/beer, Delaware’s rates per gallon (as of Jan. 1 2009) are $5.46/0.97/0.16
Maryland’s are $1.50/0.40/0.09 — quite a bit lower than ours, in other words.
So basically, take your false “facts” and false conclusions and stuff them in a beer barrel. You don’t know WTF you’re talking about.
Any neo-Puritan can enthusiastically support the increase in a ‘sin tax’ on a substance that they do not enjoy.
A lower cigarette tax would increase revenues as the volume of sales from out of state buyers would greatly increase.
Then again. the brightest and best are not always sent to Dover.
Geezer, good info. But don’t forget that at the cash register, many of Maryland’s savings become a liability at 6% of your purchase…..
Dear Rep. Kowalko,
You know I applaud your efforts on many levels, and realize you may be worn down from all the bickering and back and forth in this budget.
But Rep. Kowalko, you know those “Need A Penny?” coin tosses you see at most check-outs? I really don’t mind if customers are pointed to that if it makes a 4 million dollar difference overall. Please rethink your vote. Of all the votes the sitting gang was going to put through, this is one of the easier ones. Thank you.
I like John’s comment and posted part of it above, but this is bullshit:
Increasing the tax by $0.02 per can of beer does nto put jobs in jeopardy.
John Young: Even with the sales tax added, Maryland’s prices on spirits are lower than Delaware’s. Wine and beer come out closer to even, but usually they’re a little bit cheaper in the Free State. IN short, the distributors aren’t lying on this one.
The analogy with the racinos was intended to show there is often more than meets the eye. Poor economic times enhance competitive advantages and exacerbate c0mpetitive disadvantages. The last time Alcohol taxes were increased there was a 15% drop in sales. This is a concern as regards personnel budgets and potential job losses. There is also the pass through costs to the restaurant industry which threatens some restaurants causing them to revisit benefit plans they offer. I have one particular constituent whose restaurant provides Health Care benefits to a number of employees (unheard of in most of these types of businesses) who, due to the economic downturn, is struggling to afford those benefits for his employees. As long as we make no commitment to a universal health care system and insist on burdening local businesses with our revenue requests while ignoring the reality of those corporations that can afford a temporary and minor uptick in their burden we will continue to put local jobs at risk.
John
I don’t think anyone truly expected the big picture issue to be fixed within this session…not the enormous load of dung that was handed over from the previous executive and her joke of a budget proposal upon leaving.
In agreeing with the ‘R’ side of me, I am no proponent of tax. Going with the stronger ‘I’ side of me, I know why we have and need taxation. I am in no way naive where I think all this can go away without additional taxes, not in the relatively short time frame given to handle Ruthie’s gift. It’s also why you don’t see me joining the partisan calls to no-new-taxes. Hey, I hate taxation, I really do, but I understand what needs to be done.
The sunset provision is not a bad thing, either. It puts a life-expectancy on these revenue enhancers…enhancers for a government that I think we all agreed at one point or another that is bloated. Once attrition and other contraction is attained, then those enhancers become moot. It gives you time, also per Jack’s election and inauguration goals, to review all of our state’s programs throughly and carefully for waste to trim. It may be a little here and there, but those “littles” add up as the pile gets bigger. Unfortunately, I think some people want to get the big fish for their kill, but in turn ignore the little minnows swimming in the 20-gallon tank. Start putting those minnows in a single pile (ignore the stink they will create, outside of the water), and suddenly you have the same, if not more money to trim vs one big fish.
God, I hope this ramble made sense!!! 😛
John – I love you mate. Windy Hills – top of the food chain and all that… but this ‘threatens jobs’ argument is 30 year old, liberal-union boilerplate. I can say with near absolute certainty that my weekly beer bill exceeds that of everyone here combined. My functioning alcoholism is a point of pride. I spend more on beer in a week that gasoline for the month. Feel free to take my ass to the cleaners. This tax won’t change people’s behavior one iota and thus has no jobs impact. That’s just ideological silliness.
But, as stated above, the fact that you’ll regularly and lucidly defend your position is very admirable. You still have my vote!
I spend more on beer in a week that gasoline for the month.
I am glad to hear you aren’t doing much driving.
HA! Yeah, my eyesight isn’t the best either. I take the train to work and my wife chauffeurs on weekends so I never really need to drive much. That probably contributes to the drinking. That and it’s great fun.
Hey Smitty-I don’t know what happened to my comment, but I hit you back w/
Just like a Delaware politician–all ramble–no cents!! 🙂
You were fine. But why do you think they call it beer money?
“This tax won’t change people’s behavior one iota and thus has no jobs impact. That’s just ideological silliness.”
And yet there is data from the tax increase in the early ’90s that says otherwise.
G – Oh, do tell. I followed the link you provided earlier and it was just tax rates for each category by state. (Did I miss it?)
What liquor tax had a noticeable impact on sales? And what was negative impact on employment in the sector? Corollary evidence, etc… Could you point me in the right direction here…
The last time Alcohol taxes were increased there was a 15% drop in sales.
How long did the drop last, and when sales recovered were they bigger than before?
The last time Alcohol taxes were increased there was a 15% drop in sales.
Sad to say, but this statistic has the smell of something that came from a lobbyist. I am not aware of any publicly available primary source for this number.
A – That’s sort of what I mean. You can’t just say something and I’m supposed to accept it. Christ, they made drinking illegal and couldn’t stop it. Moreover, IF there was a drop what was the JOBS IMPACT…
On one of my many trips to the liquor store last week I saw those NO TAX posters up… like you said, smelled very much like a lobbying effort. I’d like to see the source evidence if you don’t mind. Just for shits and giggles…
“You can’t just say something and I’m supposed to accept it. ”
As in anon’s flat-out lie? Where has s/he linked to anything? He made a statement without anything to back it up.
“I followed the link you provided earlier and it was just tax rates for each category by state. (Did I miss it?)”
Yes, exactly. This is known as “data.” Anon said our rates were lower than all surrounding states. The link shows this to be untrue, and it took all of 30 seconds for me to find it.
“What liquor tax had a noticeable impact on sales?”
The excise tax was raised, briefly, in I believe 1991. This was before the internet age, so I haven’t been able to track anything down online in my limited time while at work. At this point, you’ll have to take it on faith that lobbyists occassionally use facts when they back up their positions.
“And what was negative impact on employment in the sector?”
I’m not sure there was much, because the drop in sales was steep enough and fast enough to convince lawmakers to rescind it.
Regardless, the point is in the data I linked to, which you apparently can’t be bothered to read: Our excise taxes are quite a bit higher than those in Maryland, a state with which we share more than 100 miles of our southern and western border and which no resident of Delaware would have to drive more than 30 minutes to reach.
I would suggest that a burden of proof here, if one exists, rests with the position that contradicts common sense — yours. Industry lobbyists claim, and I believe because it makes sense, that a portion of Delaware drinkers will drive to Maryland if it saves them money. Two commenters saying it wouldn’t change their behavior isn’t much of an argument. For what it’s worth, I wouldn’t change mine, either — but back when I was a low-income UD student it did. If 10% of customers feel the same — and 10%, not 15%, is what I was told the drop in sales amounted to — there’s your 10% drop in business.
Again, I don’t have a link to the numbers, but the Markell administration itself backs up the claim in a roundabout way — if you do the math, you’ll find the revenue estimate is based on a lower volume of sales than currently sold in the state. The state pegs the drop in business at 5%, the industry claims it was 10% back in the ’90s.
But my point remains — even the administration acknowledges that alcohol purchases will decrease, and not because people can’t afford the extra 25 cents per 6-pack.
Daaaaang! That’s what I call a smackdown.
So…moving on. Say the beer tax is no good…where does the $4 million come from?
if you do the math, you’ll find the revenue estimate is based on a lower volume of sales than currently sold in the state. The state pegs the drop in business at 5%, the industry claims it was 10% back in the ’90s.
Not sure this proves taxes cause the drop in sales. All of the state’s revenue estimates are based on lower revenue in just about every industry due to the national economy, just like the early 1990s.
4 million? That’s the entire SEED program. I see the connection here…Beer and college kids.
Easy big fella… relax. I read the “data”. My question differed from anon’s and as you said the was no employment impact and no figures you can track down. Perhaps there wasn’t a job loss because it was recinded quickly, perhaps… but just as you schooled me on what data is maybe I can school you on what conjecture is.
Anyway, feel free to continue you partisan squabble.
I have to agree with Rep. Kowalko. It is too bad that he did not apply that logic elsewhere.
“maybe I can school you on what conjecture is.”
You’ve engaged in nothing but. You could check out your theories with any number of people. I have, and just because I don’t have the data you want doesn’t mean it doesn’t exist. You’re the one who, by his own admission, has done nothing but conjecture. Feel free to continue.
“Anyway, feel free to continue you partisan squabble.”
Not the least bit partisan. I couldn’t care less whether the tax passes or not. I just don’t like people who don’t know jack shit pretending they do.
OK, honestly, someone tell me how cutting school construction funds over this tax being passed is a good thing, let alone even the consideration of cutting higher education funding for two years in a row? Any takers?
Apparently, RSmitty, Kowalko thought that booze was more important than education.
Citing bogus statistics (“The last time Alcohol taxes were increased there was a 15% drop in sales”) and catering to the whining of a single restaurant owner is no excuse.
John Kowalko: Booze over books.
Some progressive.
No,unions over education.
Look, I really don’t think John had anything direct to do with the school construction funding being cut. I swear, had he saw that coming, there would have been much more going on that night in Leg Hall. Is it a result of what happened? Yup. Did John make this his own result? No.
What we should be bitching about (in addition to the deep-sixing of this bill), is that when the bond bill committee met, they went straight for educational funding.
Here are those members, but keep in mind that, per todays News Journal, Oberle was the only vehemently against this cut, so much so, that over the closed-ears ignorance of the rest of the committee, he walked out. Ladies and Gentlemen, your committee of shame:
Robert L. Venables
Patricia M. Blevins
Nancy W. Cook
Harris B. McDowell
F. Gary Simpson
Liane M. Sorenson
—–
Helene M. Keeley
V. George Carey
Michael P. Mulrooney
William A. Oberle (lone dissent – walked out)
Teresa Schooley
John J. Viola
“Citing bogus statistics (”The last time Alcohol taxes were increased there was a 15% drop in sales”) and catering to the whining of a single restaurant owner is no excuse.
John Kowalko: Booze over books.
Some progressive.”
Bullshit, only you’re too stupid to know it. Go ahead and post the actual business drop. Don’t know it? What a surprise.
Smitty,
We kept hearing there was drama with Oberle and Venables about the bond bill.
The fact is that saying “The last time Alcohol taxes were increased there was a 15% drop in sales” has no bearing at all unless you know how much the tax increased then and whether or not it is comparable to what was just proposed.
Did the taxes go up 10%? 20%? 50%?
And what was the cost of driving out of state then compared to what it is now?
And can you show me a realistic 2009 Demand curve that says people are going to purchase 15% less beer if the price of a six pack rises by 12 cents?
You can’t? What a surprise. Do you even know what that is?
You got no room to call me stupid.
John Kowalko: Booze over books.