California Tax on Alcohol Initiative (2010)
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Josephine and Kent M. Whitney submitted the initiative to the Attorney General of California for a ballot title on December 29, 2009. The working title of the proposed initiative was the "Alcohol-Related Harm and Damage Services Act of 2010." The initiative was returned to supporters in late March 2010, reportedly leaving little time to circulate petitions. According to supporters, the initiative will be proposed for the November 2012 ballot.
Ballot label details
Ballot title: Imposes Additional Tax on Alcoholic Beverages. Initiative Statute.
Official summary: Imposes an additional excise tax on alcoholic beverages, increasing the excise tax on each six-pack of beer from 11¢ to $6.08, on each 750 ml bottle of wine from 4¢ to $5.11, and on each 750 ml bottle of distilled spirits from 65¢ to $17.57. Requires additional excise tax revenues to be deposited into a special fund appropriated to the Department of Alcohol and Drug Programs to finance programs to address alcohol-related harms as specified.
Estimated fiscal impact: Additional state revenues of between $7 billion and $9 billion annually from an increase in state excise taxes on alcoholic beverages, with the proceeds going to support alcohol-related programs and services. A decrease in state and local revenues from existing excise and sales taxes on alcoholic beverages of several hundred million dollars annually due to a likely decline in consumption of alcoholic beverages.
(Note: In California, when initiative sponsors submit language for a proposed initiative, they may submit with their language a section of "findings." Findings, even if they are presented by initiative sponsors as facts, represent the opinion of the initiative's sponsors, and are not vetted by others.)
The "findings" section of 10-0005 lays out these beliefs of sponsors; the text that appears below is an exact quote from the "findings" section submitted by the initiative's sponsors:
(a) Alcohol-related problems cost Californians an estimated $38.4 billion annually, including the costs of illness and injury, the criminal justice system, lost productivity, impacts on the welfare system, trauma and emergency care, and the foster care system.
(b) Alcohol use also costs California's state and county governments approximately $8.3 billion annually in increased health care costs, criminal justice costs, and lost tax revenues, while the income to the state from alcohol licensing, fees, excise taxes, and sales taxes is less than $1 billion annually.
(c) According to the u.S. Centers for Disease Control and Prevention, beer is the most commonly consumed drink by binge drinkers, and 67 percent of binge drinkers are underage. Underage drinkers account for 17.5 percent of all beer consumed annually, spending $22 billion.
(d) Beer accounts for 80 percent of the preferred alcoholic beverages.
(e) Ninety-seven thousand college-age women are raped or sexually assaulted each year under circumstances involving the use of alcohol. Half of all rape victims were intoxicated and half of their attackers were intoxicated at the time of the attack.
(f) Alcohol use during pregnancy causes approximately 5,000 children to be born in California each year with alcohol-related birth defects.
(g) The cost of services for one person born with fetal alcohol syndrome is over $2 million each year.
(h) The use of alcohol is associated with an increased incidence of digestive disease, cancer, neuropsychiatric conditions, cardiovascular disease, malignant neoplasms, pregnancy-related conditions, fetal alcohol syndrome, and high risk sex.
(i) One person dies, and there are 533 incidents of violent crime, every hour due to alcohol use in California.
(j) While the staggering cost of alcohol abuse is borne by all Californians, 67 percent of the alcohol sold in California is consumed by only 11 percent of the population.
(k) The last alcoholic beverage tax increase in California was in 1992.(l) An alcoholic beverage tax increase is necessary to mitigate the adverse effects of alcohol use.
The initiative was supported by a citizen-based non-profit group that reportedly focuses on increasing awareness and providing education pertaining to the adverse health effects alcohol has on the human body, as well as the multiple harm and dangers associated with alcohol abuse. The 2010 initiative was written by Josephine and Kent M. Whitney.
According to one newspaper:
- "Slapping a five dollar tax onto every bottle of wine will do more than just ruin a brand's nickname and dampen drink deals at local pubs - it'll destroy the California wine industry, local vintners and alcohol retailers said.
- If passed, the Alcohol-Related Harm and Damage Services Act of 2010 would increase the excise tax on a bottle of wine by 12,675 percent, from the current 4 cents a bottle to $5.11.
- 'I've never seen anything like this,' said Cheryl Murphy Durzy, vice president of sales and marketing at Clos LaChance Winery in San Martin. 'It would put me out of business.'"
Path to the ballot
- See also: California signature requirements
Sponsors were required to collect 433,971 signatures by August 23, 2010 to qualify the measure. However, to qualify the measure for the November 2, 2010 ballot, signatures were required to be submitted by early May 2010.
The initiative was returned by the attorney general to supporters in late March 2010, reportedly leaving little time to circulate petitions. Supporters decided instead to withdraw their 2010 efforts and refile for the November 2012 ballot.
- California Secretary of State,"1461. (10-0005)," March 25, 2010
- KSBW, "Proposal Looks To Raise Tax On Wine 12,675%," April 1, 2010
- San Francisco Business Journals, "Proposed California initiative would send taxes on beer, wine & spirits skyrocketing," March 30, 2010
- Gilroy Dispatch, "Updated: $5 tax on bottle of wine?," April 1, 2010
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