Home Statewide Politics Generation Opportunity Baits Young Alaskan Voters With Beer

Generation Opportunity Baits Young Alaskan Voters With Beer

Photo credit: sabin paul croce, Creative Commons Licensing.
Photo credit: sabin paul croce, Creative Commons Licensing.

Generation Opportunity, a conservative advocacy group based in Washington, D.C., posted a petition Wednesday calling for a reduction of tax on Alaska craft beer and suggesting that Sen. Mark Begich (D-Alaska) is to blame for the cost of beer.

The petition reads, in part,

As Alaskans, we have a lot to be proud about. We’re the largest state in the nation, we have the highest mountain in the country, but did you know that we also have the second highest excise taxes on craft beers? Alaska places an excise tax of $1.07 on every gallon of beer. Paired with federal taxes on beer that means that almost half of the cost for each cold one that we enjoy goes to paying off the government. This not only adds to the price of each bottle or glass that we buy, it also burdens the 22 budding craft breweries that call Alaska their home. Freedom is one of the things we love most about our beautiful state, yet Alaska is one of the toughest places to be a brewer in the United States. Since 2009, when we put Senator Mark Begich in office, national beer prices have increased by 9% according to the Bureau of Labor Statistics. (emphases in original)

Though the pronouns “we” and “our” feature frequently in the petition, Generation Opportunity is not an Alaskan organization. As reported previously on Alaska Commons, Generation Opportunity (which would like us to call it GenOpp) is masquerading as a grassroots organization. It is run by a research analyst at the Heritage Foundation and has received $5 million from the Koch brothers. And after announcing its arrival in Alaska via Twitter on March 11, Generation Opportunity managed to misspell Lt. Gov. Mead Treadwell’s name on the medium three times on July 1.

The petition was posted by Sharon Koss, whose Linkedin profile describes her as Regional Digital Coordinator at Generation Opportunity in the Washington, D.C., metro area. Previously, Koss held internships with Congressman Don Young (R-Alaska) and the conservative National Taxpayers Union. She was also a student research fellow at the Charles G. Koch Charitable Foundation.

Koss is correct when she says Alaska has the second highest excise tax on beer. The state tax on a gallon of beer, craft or otherwise, is $1.07. The highest tax rate on beer, at $1.17, is in Tennessee. In fact, other than Alaska and Hawaii, the highest tax rates on beer are concentrated in the Southeast where state income tax is either low or, like Alaska, nonexistent.

In Alaska, the excise tax generates about $20 million annually, or about one-third of one percent of the state’s unrestricted revenue. It is less that two percent of the unrestricted funds budgeted for the Department of Health and Social Services in a state ranked number six in per capita alcohol consumption.

Excessive alcohol consumption cost Alaska over $700 million in 2006, in areas such as workplace productivity, healthcare, and criminal justice expenses. According to the Centers for Disease Control, about 40 percent of the cost of excessive drinking nationwide is borne by federal, state, and local taxes. The $20 million the excise tax raises in Alaska does not come close to covering this amount.

The Alaska excise tax has not changed since October of 2002, almost 12 years (the last increase, by coincidence, was championed through the legislature by then-state Senator Lisa Murkowski). During that time, craft brewing has expanded exponentially in the United States. The year over year increase from 2012 to 2013 was over 22 percent for both regional craft breweries and microbreweries.

Growth has also happened in Alaska under the tax regime Koss criticizes. In 2013, Alaska ranked 7th in breweries per capita and 3rd in production in 2012. The state added two breweries to the 22 members of the Brewers Guild of Alaska as recently as 2012.

Intimating that $1.07 is a crushing blow to small business is disingenuous for another reason. According to the Alaska Department of Revenue (ADOR), “Alaska allows breweries, both in and out of the state, that produce less than 2,000,000 barrels of beer a year to pay a reduced rate of tax on the first 60,000 barrels (1,860,000 gallons) sold in the state during a fiscal year.” The reduced rate was passed specifically to support Alaska breweries.

About 25 percent of the malt beverages, including beer, distributed or sold during Fiscal Year (FY) 2013 qualified for the reduced tax amount of 35 cents per gallon. Again, according to ADOR, 39 businesses and/or individuals benefit from the tax break annually, which translated to a reduction in state revenue of over $2.6 million in FY 2013.

As for Begich’s role, he does not hold state office and therefore cannot vote to change state alcohol tax. However, he is a cosponsor of Senate Bill 917, the Small Brewer Reinvestment and Expanding Workforce (BREW) Act, which would reduce federal excise taxes for breweries that produce 6 million gallons or less annually. The bill, supported by the Brewers Association, is also cosponsored by Sen. Lisa Murkowski (R-Alaska), as is the House companion by Don Young.

Generation Opportunity is trying to manufacture an issue it thinks will fire up young people — beer. This is either pandering condescension or a long awaited spotlight on a heinous free market restriction overlooked by the lame-stream media. Cue your outrage of choice.

Or maybe exploring the facts gives us a third option: education.