Oregon Governor Proposes Stealth Tax Via Liquor Markup


After claiming that she wouldn’t raise taxes on alcohol, Oregon Gov. Kate Brown’s budget proposal includes a call for a 5% increase in the markup for liquor. As reported by Oregon Public Broadcasting:

As she finalized her budget proposal for the next two years, Oregon Gov. Kate Brown made no secret of the fact she’d push for higher tobacco taxes, which she believes should play a larger role in funding health care.

At the same time, Brown said she wouldn’t pursue higher taxes on beer and wine, despite a request by the Oregon Health Authority…

But there was one “sin tax” that Brown didn’t mention — to the media or the industry that would be affected. Brown wants to increase what the state collects from liquor sales.

Tucked toward the back of Brown’s 500-page, $26.3 billion budget proposal released Wednesday is a single mention that the governor hopes to raise the markup on Oregon liquor sales by 5 percent beginning July 2019. The move would bring an extra $21.2 million into the state’s general fund, according to the budget proposal…

Read more here.

Oregon is one of 13 states that controls distilled spirits sales at the retail level—liquor stores are operated by state-appointed liquor agents, but the state sets the prices. As R Street’s Jarrett Dieterle has noted before, control states that increase liquor markups are really instituting a form of stealth tax on their citizens—especially when the money generated from the enhanced markup merely flows to the state’s general fund. (Read Jarrett’s report on control state markups here.)

The Last Frontier: The Online Economy and Booze


You can get online delivery of almost every product under the sun these days, but booze remains a stubborn exception. In Forbes, R Street's Jarrett Dieterle takes a look at what's stopping the on-demand and online economy from fully extending to the alcohol industry:

Alcohol chain retailer Total Wine & More recently announced a partnership with the app Minibar Delivery to launch an on-demand booze delivery system in Arlington, Virginia. The service, which includes free two-hour delivery, contained a notable exception: no hard spirits. Amazon Prime likewise started delivering beer and wine last month in Portland, Oregon. But again, the service did not include hard spirits.

Beltway millennials and Portlandian hipsters may be left wondering why their on-demand experience is being restricted in a way that seems so totally arbitrary. The answer is outdated alcohol laws that need updating...

The good news is that there’s hope. Evidence suggests that millennials prefer online shopping to the brick-and-mortar alternative, and many younger Americans have grown accustomed to having the world at their fingertips. It’s unlikely that a young mom hosting a weeknight barbeque in Portland will be sympathetic to rules that say she can have extra hamburgers delivered to her house in under an hour, but not a spare bottle of rum to add to the punch. Likewise, a recent college graduate working in Arizona’s solar fields may wonder why she’s unable to have her favorite small batch Kentucky bourbon delivered to her door within two days, just like the rest of her purchases...

Read the whole piece here.

In Effort to Shore Up Pension Shortfall, Oregon Targets Booze


Oregon governor Kate Brown has created a special task force to explore options for shoring up Oregon's $22 billion public pension deficit. Ideas include "commercializing" Oregon's Liquor Control Commission and raising the state sales tax on alcohol. Full privatization of the control state's liquor system was rejected on account of worries that the state couldn't get "the best price" if it divested its stake in the system now. The Register-Guard has the full story:

Oregon could buy down its $22 billion public pension deficit by further commercializing its state-run liquor system, raiding a variety of big public reserve funds or imposing new surcharges of up to 10 percent on all state-­issued permits, licenses and registrations...

Big changes to the Oregon Liquor Control Commission and SAIF, the state workers’ compensation agency, are among the task force’s most developed ideas so far.

Blair said the state could change OLCC rules and practices so that it generates more than the current $287 million it now does annually for state and local governments.

'The way (liquor) is purchased, priced and distributed is not necessarily the way a commercial operation' would do it, Blair said.

For example, Oregon now has one liquor store per 15,000 people — far below the national average. The state could rapidly expand the number of stores in operation. It also could switch to a centralized purchasing system, so stores aren’t all ordering their own products individually through the OLCC. And the OLCC could be allowed to market or promote the liquor it sells.

While the task force initially discussed fully privatizing OLCC, Blair said that selling the agency before its full commercial potential is realized would mean 'you wouldn’t get the best price.'

But task force member Charles Wilhoite of Willamette Management Associates said that a more aggressive approach at the OLCC might raise moral questions about the state promoting alcohol consumption.

Greater commercialization 'will necessarily result in more drinking,' he said.

The task force also is floating a new state tax of between 1 percent and 10 percent on liquor sales with the proceeds — between $10 million and $50 million — dedicated to PERS. It might recommend lifting the current ban on cities and counties passing their own alcohol taxes as well..."

Read the rest here.

Oregon Liquor Control Commission starting new store drive

Oregon's liquor regulator is seeking to expand the state's retail options for spirits. Although not a full privatization of liquor sales, it could pave the way for quirky liquor retailers -- boozy bike shops, anyone?

Joseph Ditzler of The Bulletin has the full story:

"In 2015, the Oregon Liquor Control Commission embarked on what it called its largest liquor outlet expansion since Prohibition.

Nearly two years later, that expansion is coming to Central Oregon. The OLCC is opening a window for retail expansion, or “open recruitment,” as early as May.

Nearly anything goes. Knitting supply shop with a liquor counter? A whiskey selection in a sporting goods store? All reasonable applications are welcome, according to OLCC officials.

'It’s exciting. The process is pretty wide open,' said Steve Marks, OLCC executive director, on Thursday. 'You can apply as a retail grocery store, as a bike shop. Potentially, we’re looking at those kinds of innovations, in addition to the normal distilled spirits only or nonexclusive, beer, wine and distilled spirits stores.'..."

Read more at: http://www.bendbulletin.com/business/5232557-151/olcc-starting-new-store-drive?referrer=bullet4


Bill would ban alcohol on Oregon beaches

KGW.com reports:

"A bill introduced in the Oregon House of Representatives would ban the use of alcohol on the state's public beaches.

House Bill 3441 would make it a crime to possess or consume alcohol, or to possess or discard "an alcohol container or any glass bottle designed to contain a drink or beverage," punishable by up to 30 days in jail and/or a fine of up to $1,250.

Currently, drinking alcohol is allowed on Oregon beaches for people 21 and over..."

Read more at: http://www.kgw.com/news/local/bill-would-ban-alcohol-on-oregon-beaches/428921248