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Check back here often for new annoumcements and press releases on issues facing licensed beverage retailers in Minnesota.
StarTribune Editorial, April 5, 2010:
Dan O'Gara, Pat Mancini: Tax alcohol, destroy jobs and businesses
Bars, restaurants are already reeling from recession, smoking ban, wage hike.
By DAN O'GARA and PAT MANCINI
The March 28 editorial by Stephen Simon and Chelsea Becker urges Minnesota to increase the tax on alcohol – already the most taxed commodity in the state – to raise money for DWI enforcement. While all of us in the hospitality industry in Minnesota support aggressive enforcement of DWI laws, raising the tax on alcohol would have terrible consequences that would harm businesses statewide and punish law-abiding, responsible consumers.
Simon and Becker would have readers believe that higher alcohol taxes are the logical answer to their bevy of statistics on the costs and social ills of alcohol. But several of their arguments relied on significant factual errors.
First, they twice cite a 2001 Department of Health white paper that estimated the social costs of alcohol use in Minnesota. This document used highly arguable assumptions to calculate an exaggerated figure of the costs to the private and public sectors.
The authors also claim that the alcohol tax “has not been increased since 1987.” This is only true of one of the many taxes levied on alcohol in Minnesota. In fact, alcohol is subject to federal taxes, a state excise tax, state gross receipts tax, state sales tax, and in many instances a local sales tax. The accumulation of taxes makes a glass of beer already more expensive in Minneapolis than it is in New York City. Without any further increase, alcohol taxes in Minnesota are already anywhere from 80% to 20% higher than all surrounding states.
There are only three products in Minnesota that have an excise tax placed on them – gasoline, cigarettes and alcohol. Of these products, alcohol is the only one that is taxed again at the retail level. In addition, there are only two products in Minnesota – rental cars and alcohol – that are taxed at 6.875% for sales tax plus an additional 2.5% gross receipts tax. This makes alcohol the only product in the state that has an excise tax and a 9.375% state sales tax.
Next, Simon and Becker erroneously suggest that a sales tax increase of a dime per drink would hardly be felt by consumers. They neglect to mention, however, that alcohol taxes are some of the most regressive taxes in the code. Furthermore, proposals that have been introduced in the Minnesota Legislature would increase costs at all levels, and these costs would be felt significantly by the public. For instance, the tax increases advocated would raise the price of a case of beer by $2.64!
Minnesotans are not frequenting hospitality businesses as often these days. At a time when many restaurants and bars are struggling to survive the worst economic downturn in 80 years, we – along with our customers – cannot afford the burden of higher alcohol taxes. The state smoking ban and the increase in Minnesota’s minimum wage were hard enough for many establishments to endure. Higher alcohol taxes could be the last straw for countless restaurants and bars. In this tenuous economy, such a tax increase will undoubtedly cost many Minnesotans their jobs.
Simon and Becker attribute all sorts of costs and social ills to alcohol, but in reality only a very small minority of people misuse alcohol and create problems for themselves and society. They ignore the fact that those who use alcohol in moderation experience health benefits, such as the lower risk of heart disease associated with drinking red wine. (And nowhere in the Department of Health’s white paper is this benefit calculated in economic terms.) Why should the vast majority of Minnesotans who consume alcohol responsibly bear these costs?
There are many consumer goods that some people use improperly or in excess – ranging from automobiles to firearms to fatty foods – that create health or public safety challenges. But it would be deeply misplaced to burden responsible consumers and the businesses they frequent with excessive taxes.
Adding a dime-per-drink tax is not the way to solve the state government’s fiscal problems, especially when it will worsen the economic nightmare for hospitality businesses in every corner of the state.
MLBA Press Release
Friday, January 29, 2010 8:00 A.M.SAVING MINNESOTA CHARITIES…
FAIRNESS IN GAMBLING…
NEW REVENUE FOR MINNESOTANS…Dan O’Gara, president of the Minnesota Licensed Beverage Association (MLBA) located in St. Paul, Minnesota, announced today that it is time to consider saving Minnesota charities, bring fairness to gambling and new revenue for Minnesotans. With all the hype brought on by a Minnesota Senator leaving his post and supporting the expansion of gambling, Mr. O’Gara and the MLBA do not want legislators to forget about the Minnesota hospitality industry.
O’Gara stated in a prepared news release issued today that the Minnesota hospitality industry which includes the licensed bars, restaurants and drinking establishments located throughout Minnesota (over 4900 licensees) can bring $1.2 billion (that’s billion, with a “B”) in new revenue for Minnesotans, if enhanced electronic forms of gambling is approved. Enhanced gambling consists of the newest automated video games of chance, electronic pull-tabs and electronic bingo, which will be submitted in a bill during the upcoming legislative session.
The MLBA agrees it is time to take a good look at fairness in gambling in Minnesota. According to Dan O’Gara, “Our industry along with the Minnesota charities, veterans clubs, fraternal groups and others, have been mandated to near extinction in many parts of Minnesota. The economic downturn and the loss of patronage in our social clubs and retail establishments have crippled the Minnesota hospitality industry.”
MLBA members agree. Bob Pallansch, owner of Double R Saloon in Grey Eagle, Minnesota, stated: “It is time the hospitality industry is given some consideration for keeping jobs, enhancing retail business and saving Minnesota charities.”
Frank Ball, the MLBA Executive Director stated: “If the legislature is considering enhancing gambling and obtaining additional revenue from this source, the Minnesota Gambling Coalition would like the charities, veterans clubs, service clubs and the retail liquor establishments have the opportunity to be involved in these discussions.”
Ball further stated that enhanced gambling is already taking place in privately owned retail establishments in Mahnomen County on the White Earth Indian Reservation. “We feel it is time that fairness in gambling is made available to all those retail facilities that wish to participate in lawful gambling throughout Minnesota.”
Contact Information: Frank Ball: frank@mlba.com, Dan O’Gara 651-644-3333, Bob Pallansch 320-285-2965.
MLBA Comprehensive Gambling Bills Entered in 2010 Legislative SessionRead the bills here: HF 3268 and SF 2930.
5/14/09 Update:
MLBA Radio Ad Opposing Beer Tax Hikes
click here to listen to it (mp3)
Smoking Ban Debate from 2007:
| Smoking Ban Testimony | ||
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Click below to see video testimony from the Senate Economic Development and Jobs Committee (3/21/07):
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Click below to hear audio testimony from the House Commerce Committee (3/1/07): Colin Minehart, Main Street Grill in Alden |
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Click below to see video testimony from the Senate Business, Industry and Jobs Committee (2/14/07) and (2/20/07):
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