State Sen. Ray Peterson, R-Cowley, hopes to raise the state’s tax on malt beverages from 2 cents per gallon — the lowest in the United States — to 17 cents per gallon. That would mean paying about 17 more cents per 12-pack of beer.
Speaking to Park County Republican Party leaders last month alongside other local lawmakers, Peterson noted a 2010 Wyoming Survey and Analysis Center study that concluded alcohol abuse costs the state some $27 million a year in direct costs. That figure includes expenses such as substance abuse treatment, court costs, emergency services and law enforcement.
Wyoming taxes on alcohol — which are in addition to sales tax — brought in $1.8 million in the state’s most recent fiscal year. The state collected another $11.7 million of profit in its role as the wholesale distributor of liquor. The Wyoming State Liquor Association says alcohol provides about $14 million of revenue to the state each year.
Peterson says the taxes, particularly for beer, fall well short of covering the estimated cost of alcohol abuse.
“That’s a hole” in the budget, he said. “Now a good Republican would say, ‘How long are we going to subsidize this?’ That’s my question.”
Wine is effectively taxed at 24 cents per gallon and brought in $317,733 in fiscal year 2013, while the sale of spirits — taxed at 80 cents per gallon — brought in nearly $1.22 million, according to Wyoming Department of Revenue figures.
The tax on beer, meanwhile, raised $265,850 in fiscal year 2013 (representing the purchase of some 13.29 million gallons of beer).
Upping the tax on beer to 17 cents per gallon would raise approximately $2 million. Peterson would like to see that money distributed to specific areas struggling with alcohol-related problems.
He described the proposed increase as putting Wyoming in sync with Montana (around 13.5 cents per gallon), Colorado (8 cents) and Nebraska (31 cents).
“We’re pretty much in line with our ... hard liquor and wine (taxes), but beer, we’re not even close,” he said.
The senator, who doesn’t drink or smoke, noted the stiff tax on tobacco products (upwards of 20 percent) more than covers the substance’s direct costs.
“It’s only fair. It’s only right,” Peterson said of raising the tax on malt beverages.
He has struggled to find a lawmaker in the House to sponsor the revenue-generating bill in an election year.
“You don’t want to run on the campaign of, ‘I’m going to raise your beer tax,’” he laughed.
As of the start of the session on Monday, no one had steppped forward to sponsor a tax hike.
Rep. David Northrup, R-Powell, drew some applause from the Park County Republicans last month when he announced the revenue committee — where both he and Peterson serve — did not endorse the hike in the tax.
However, “We all believe it should come up some,” Northrup said of the committee.
“If it went to 5 or 6 or 7 cents, that’s not going to be that much of a bump on a 12-pack of beer. Hint, hint, hint,” Northrup said towards Peterson.
Rep. Nathan Winters, R-Thermopolis, didn’t offer his position on the tax and said he didn’t know whether the proposal would go anywhere. However, he said he appreciated Peterson’s remarks. As a pastor, Winters said he’s seen “the damage that is created as a result of the consumption of alcohol” and that for those struggling with alcohol, “many times it ends in a bad place.”
The liquor industry opposes raising the tax rate, and rank-and-file Park County Republicans didn’t appear enthused, either, at the Jan. 13 gathering.
“We are the party of no new taxes, and I don’t care if it’s 2 cents or a quarter of a cent,” said South Fork Republican Geri Hockhalter. Another Republican precinct committeeman, Paul Lanchbury, echoed the anti-tax sentiment.
The Republicans showed even less interest in expanding the state’s Medicaid program — a cause being championed by Wyoming Democrats.
Under the Affordable Care Act, states can expand Medicaid — a state/federal social welfare program that pays for health care for low-income citizens — to include people whose annual income is as much as 138 percent of the poverty level. That’s roughly an annual income of $16,100 for an individual or $32,900 for a family of four.
A 2012 Wyoming Department of Health study concluded the expansion would provide medical coverage to around 17,000 more residents and — because the federal government has pledged to pick up the full tab for the expansion — save the state some $47 million over six years.
Republican legislators rejected the expansion last year, and there’s little indication the mood is different this year.
“Our concern, and our doubt, is that the federal government has broken promises before. And usually how they build programs is they’ll fund it 100 percent a year, two years and then they’ll pull completely out of it and we’re left holding the bag,” Peterson said.
Personally, Peterson said he’s “extremely concerned” about the nation’s debt and spending more money the country doesn’t have.
“We have these people standing up down there for half-a-day in Cheyenne saying, ‘We need to expand this Medicaid and there’s people out there hurting and can’t afford insurance,’” Peterson said. “And yeah, my heart goes out for them, but if you can’t afford it, you can’t afford it.”
Winters also voiced opposition to expanding Medicaid, but he confused it with Medicare — a separate federal insurance program paid into by U.S. workers that generally provides health care coverage to retirees. Winters erroneously described the potential new Medicaid enrollees as being added to “an already severely damaged” Medicare system.
“While it seems like we’re showing mercy to 17,000 new people, you have to understand that that 17,000 was arrived at by changing what the poverty level was, one, and two, by doing it on the backs of those that have already paid into the system,” Winters said.
There is no specific “pay in” to Medicaid as there is with Medicare.
Rep. Sam Krone, R-Cody, called dealing with the Affordable Care Act — also known as Obamacare — “our big issue coming up” in the session.
“Obviously, it’s a horrible law for Wyoming and a horrible fit for Wyoming,” Krone said.
Of course, the Legislature’s biggest task in the budget session will be dealing with the budget. Gov. Matt Mead has recommended a $3.33 billion in spending for the biennium, which is up from the $3.22 billion approved by the Legislature in the 2012 budget session; lawmakers made additional expenditures in 2013 that brought the past biennium’s budget up to $3.4 billion.
Northrup, who sits on the select water committee, said budget recommendations would send around $15 million towards water projects in the Big Horn Basin and boost the local economy.
Krone noted the good news that the state has an unexpected $300 million surplus. It’s thanks to the state’s investment earnings, legislators said.
Winters expressed caution. He pointed to a decline in coalbed methane production in the northeast portion of the state and gloomy revenue forecasts. He’s seen data predicting a budget crunch as soon as 2016.
“We must maintain a very conservative fiscal policy, or we’re going to wind up in the same place our federal government is in right now,” Winters said. “And we cannot do that.”
Northrup also mentioned a bill he plans to sponsor that would provide workman’s compensation insurance to special education teachers. He said their jobs are sometimes hazardous.
Krone, who sits on the judiciary committee, mentioned an “important” bill that provides compensation to people who are proven through DNA testing to have been wrongly imprisoned.
Rep. Dave Blevins, R-Powell, didn’t talk about the upcoming session during his turn to speak. He shared some biographical information about himself.