Beer tax has high-powered foe

Lobbyist Paul Romain uses his clout to stymie a tax increase.

PETER PRENGAMAN, The Associated Press

August 4, 2003

As members of a House committee listened closely, wine and beer lobbyist Paul Romain warned that a proposed bill to raise the beer tax would endanger jobs paying $50,000 per year.

Rep. Pat Farr, a Eugene Republican, posed a question: How many people are employed by the beer industry in Oregon?

Romain shifted in his seat during the hearing this past week, and said he didn't have those numbers.

"Sorry for the unforeseen question," said Farr, letting one of Oregon's most powerful lobbyists off the hook.

The question was far from unreasonable: such inquiries are the norm during committee hearings. But the interaction shows how lawmakers' deference for Romain, and the industry he represents, contributes to keeping Oregon's beer tax one of the lowest in the country.

Brewers pay $2.60 in tax per 31-gallon barrel, which is what they've paid since the tax was raised in 1977.

Romain, 56, is a Portland lawyer and executive director of the Oregon Beer and Wine Distributor Association, which he has represented for 20 years.

His influence is a combination of the personal relationships he's formed with legislators, eloquent arguments about the need to protect Oregon's beer industry and plenty of money in the form of campaign donations.

In 2002, beer, wine and liquor lobbies gave $190,027 to legislative campaigns and $28,686 to the Democratic and Republican parties, said Janice Thompson, executive director of Money in Politics Research Action Project.

The alcohol industry pays its lobbyists well. Between 1997 and 2002, beer, wine and liquor lobbyists were paid more than $1.8 million, Thompson said.

A handful of legislators pushing to increase the beer tax say the roadblocks are obvious.

"It's all about politics and money," said Rep. Jackie Dingfelder, D-Portland. "And one of the most powerful lobbyists is Paul Romain."

Romain said contributions have nothing to do with his success. "I've never asked anybody to give me a vote based on a contribution."

Instead, Romain said legislators are convinced the brewers need low taxes. Brewers say their industry has boomed in Oregon since the 1970s, creating thousands of jobs, because the taxes haven't gone up. Raising them, the argument goes, would force Oregon brewers to cut jobs to compete with national beer companies that more easily can absorb the higher taxes.

Regardless of how the influence is wielded, it's clear that it works. In the midst of the worst budget crisis in decades, many legislators, along with Gov. Ted Kulongoski, have called for increases on both the beer and wine taxes this session.

Over the past seven months, a half-dozen proposals have been whittled down to a beer tax increase that amounts to a little more than 2 cents per 12-ounce bottle.

House Bill 2837 would raise about $24 million over the next two years, exempting small brewers that produce fewer than 5,000 barrels per month.

The money would fund drug and alcohol programs around the state, many of which have scaled back or closed because of budget cuts the past year.

Originally, the beer increase was part of a $500 million House package of revenue-raising measures. But during the past week the beer tax was culled from the package and made into a separate bill.

The change dims the bill's chances in the Republican-controlled House, where all revenue raising measures must begin.

Rep. Phil Barnhart, D-Eugene, said the move was clearly intended to kill it.

Even if an increase is passed by the Legislature, Romain has said the beer industry will collect signatures to refer it to voters. The industry would need to collect 50,420 signatures, putting it on the November 2004 ballot.

Copyright 2003 Statesman Journal, Salem, Oregon.
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