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Belly Up to the Beer Tax? Michigan Republican Would Hike It 244 Percent

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Michigan House Appropriations Committee Chair Rep. Al Pscholka (R) did his best in September to calm fears that rippled across the state that is home to “Beer City U.S.A.” (Grand Rapids, Mich.) after a fellow Republican proposed a 244-percent increase in Michigan’s beer tax.

“At one time, Grand Rapids was considered the city of churches and now it’s considered Beer City — I’m not sure that’s a positive thing. With that, you have the health issues,” Rep. Tom Hooker told MiBiz as he explained the logic behind his bill to raise the state’s beer tax.

Hooker’s proposal would add nearly a nickel to the price of a 12-ounce can or bottle of beer.

Rich Studley, president of the Michigan Chamber of Commerce, called the very thought of boosting Michigan’s beer tax for the first time since 1966 “a bad idea from a lame-duck lawmaker.”

“A nearly 250 percent beer tax hike would have a chilling effect on Michigan’s craft brewers, distributors, and retailers and would bring this growth industry to a grinding halt,” said Studley.

Hooker is picking a fight with a Goliath.

More than 200 breweries are pumping out suds now; another two dozen or more are planned. That should add to Michigan’s 2013 ranking of 8th in the nation regarding craft beer production in the coming years.

The Michigan Brewers Guild’s best guess is that when the numbers are added up at the end of this year, the state’s craft brewers put more than 7,100 people to work and produced an economic impact of more than $608 million.

Dave Ringler, the owner of Cedar Springs Brewing Company, said he couldn’t figure out why Hooker would want to attack an industry that has “been nothing but supportive” of economic development in Michigan and helping to keep people from drinking too much beer.

“Why would you punish them instead of the companies that target the frat boy, beer bong drinking culture?” Ringler said.

Pscholka assured Studley, Ringler, and the audience of a syndicated radio show, “Michigan’s Big Show,” that the tax increase proposal would fall as flat as a six-pack left outside on a hot day in July.

Pscholka also explained what his colleague must have been thinking, which seemed nothing short of blasphemous to many in the Michigan business community.

“He doesn’t like alcohol so he wants to raise taxes on everybody else,” Pscholka said.

Pscholka wasn’t being snotty. There is some truth to what he said. State Rep. Hooker does have a problem with booze.

The Detroit News reported Hooker’s mother spent several years in an orphanage because her parents were drunks.

Hooker has never touched a drop.

While saying he is not one to judge others, Hooker does believe those who produce one of society’s last legal drugs should pony up the price society has to pay for alcohol abuse. After all, why should someone like Hooker, who never imbibes, pay for the mistakes of those who do?

“If you’re going to use it, the problems that you cause are going to be paid for, and the same with the producers,” said Hooker, who is being term-limited out of office. “They’re producing a poison that’s causing problems to our systems, to our society, and they should have to pay for it.”

Hooker’s beer tax increase was projected to produce $60 million a year that would go to an office of substance abuse treatment and rehabilitation services within the Michigan Department of Health and Human Services.

Although his fellow Republicans don’t want anything to do with Hooker’s idea, a group known as Michigan Alcohol Policy Promoting Health and Safety (MAP) pointed to an EPIC-MRA statewide poll conducted in 2012 that showed 63 percent of Michigan residents actually supported raising the beer tax.

“Raising alcohol taxes will save lives, reduce alcohol-related harms, and could raise millions of dollars that could be put to good use,” said Mike Tobias, who is on the MAP steering committee.

Helping solve the problems created by alcohol abuse by taxing alcohol might seem logical to Hooker, but Tricia Kinley, senior director of tax and regulatory reform for the Michigan Chamber, said it’s not realistic.

“So-called sin taxes do not work; they simply drive people to buy legal products from lower-cost states,” said Kinley. She also noted that Michigan’s beer tax is already the highest in the Great Lakes region (Indiana, Illinois, Ohio and Wisconsin) and is 28 percent higher than the next state on the list.

Relax, Tricia.

Neither Michigan’s beer industry nor its beer drinkers have to worry about flipping out another nickel to pay for a cold one. Hooker’s beer tax increase proposal isn’t going anywhere.

Rep. Pscholka’s vow that Hooker’s beer tax proposal would die a quick death was not an empty promise.

The bill was sent, without a single co-sponsor, to the House Regulatory Reform Committee, where the dance card is maxed out.

Chairman Rep. Ray Franz, another Republican in the GOP-dominated Michigan Legislature, said the Regulatory Reform Committee’s agenda is “booked pretty solid right now.”

“Rep. Hooker has the very best of intentions,” said Franz. “But I really don’t think there’s going to be time.”