As Federal Shutdown Ends, Utah Lawmakers Bogged Down Over $0.00029 Tax Increase

committee hearing

If you happened to be watching live, last Wednesday’s meeting of the Joint Health and Human Services Interim Committee could have been misinterpreted as a brilliant piece of satire by the legislature highlighting government inaction. However, the hearing was a sobering example of legislators getting lost in the weeds due to a fundamental misunderstanding of what is being proposed as well as the desire to make partisan points on relative non-issues.

Despite a full two hours of speech-making during the meeting, surprisingly little was discussed. Of the four main agenda items, one item ended up taking up about 75 percent of the entire committee’s time: an increase in the excise tax on beer sold in grocery and convenience stores.

The proposed change in tax policy would change the tax rate on alcoholic beverages from its current rate of about $12.71 per 31 gallons to $12.80 per 31 gallons. This rate then would change year to year based on the Consumer Price Index, but would be capped at an increase or decrease of no more than 4%. In layman’s terms, the proposed change would equal an increase of .00029 cents per can of beer for the consumer.

Predictably, the beer wholesalers oppose this measure as the policy change could have a negative effect on their pocketbooks. Just as predictably, the Utah County Sheriffs Office and the PTA had representatives who spoke of the problems associated with alcohol—advocating for what those organizations feel is in the best interests of the groups they represent.

Also in attendance was Dr. David Jernigan from the Center on Alcohol Marketing and Youth Department of Health Behavior and Society from Johns Hopkins Bloomberg School of Public Health, who provided an in depth look at the societal and monetary impact of binge drinking.

Instead of legislators focusing on the possible impacts such a change in policy would have on the state in regards to public health, tourism, and public safety, lawmakers instead intently focused on the possibility that Utahns will drive across state lines in order to avoid the extra three-ten-thousandth of a cent increase on each 12 ounce can.

The extraordinary amount of wasted time highlighted a fundamental misunderstanding of how little this tax increase actually was when it comes to consumers. As the sponsor of the proposal, Representative Jack Draxler (Republican – North Logan) took great pains multiple times to point out this tax increase is a token amount, intended not to dissuade drinkers from purchasing beer, but to preserve the purchasing power of future tax revenue. This simple realization took about an hour and a half for the committee to come to grips with, instead attempting to turn the debate as one between being hard on alcohol use and the fear of appearing “anti-business” over the suggestion that taxes could be increased, no matter how slight.

The rest of the committee’s time was spent with various lawmakers reaffirming the belief that the government shutdown was a bad thing. Interestingly, Congressman Jim Matheson’s (Democrat – District 4) office was the only member of Utah’s Congressional delegation who did not send a representative or a response of any kind to the committee hearing to provide reports.

“The problem I have here,” said committee co-chair, Representative Paul Ray (Republican – Clearfield), “is that we have taken a hostage and its not the government it is the American people.” But, after an hour and a half of debate over a straight forward, minuscule tax increase, one has to wonder about the Utah Legislature’s ability to address larger issues and challenges.

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