Cannon-izing Oregon Craft Brewers
One Brewpublic reader wrote me today with his concerns about the most recent beer tax proposed my Ben Cannon, representative of Oregon’s 46th District. Brewpublican B Tuwalski writes:
Sorry to trouble you guys, I love brewpublic and look forward every day to new posts. I just got an email returned to me from Ben Cannon who is one of the people spearheading HB 2461 and would appreciate an opion from you guys on how truthful it may be. thanks for your time
Thanks first and foremost for taking the time to consider our website and for reading it. That means a lot. Really. Here is my opinion: Ben Cannon is no friend to the craft brewer. He uses the same myopic reasoning to justify an outlandish house bill that would frantically impede the character of Oregon’s mom and pop craft brewer.
Following is a letter sent to Cannon by B Tuwalski
I am not one of the most eloquent writers so I will be brief. Fact the tax on beer production by the barrel in Oregon is currently at $2.60 a barrel, fact which buts it at the spot of 43rd in the country. Fact you mention in your most recent video that the recent unemployment rate is cutting into the state’s income tax production which you show in your pie graph of being 31% of the states budget source. With this email I am not saying not to raise the tax on beer production at all but I would hope a man of your education would realize that by raising the barrel production tax to a staggering $49.61 would not only produce more revenue put would also produce more unemployed Oregonians that have jobs in the beer industry (i.e. brewers, distributor truck drivers, waiter and waitresses, busboys & girls just to name a few). Now I don’t know if you enjoy a pint of ale occasionally or not, but a major tourist attraction to this state in the wonderful beer that the craft industry here produces leave these Oregonians alone. If you feel the need to tax the life out of someone why don’t you turn your attention towards the out of state producers and leave the production tax here alone. If you found a way to tax the out of state producers (not many will shed a tear if the big 3 have to pay more) who bring their product here you would look more like a true Oregonian instead of a politician who may only get to a sophomore term. Also if the out of state beer costs more due to a tax that you seem intent on creating even more people may feel compelled to drink the local less expensive beer (there is also a carbon footprint tied in with that). Need I remind you that the district you serve contains many a local watering hole, such as the world famous Horse Brass. I hope that you leave Oregon beer industry alone in your search for more revenue.
The following is Ben Cannon’s response (in italics). I’ve interjected my response to Cannon’s claims and declarations along the way.
Thank you for your email regarding HB 2461, which would increase Oregon’s tax on beer in order to fund addiction treatment, recovery, and prevention services.
Even though we may disagree, I do want to take the opportunity to explain my position to you directly.
Currently, Oregonians pay the lowest tax on beer in the nation.
This statement is the untrue. Oregon beer taxes, as you mention are 43 of 50 in the country and remain higher than Colorado (Coors), Wisconsin (Miller), and Missouri (In-Bev/A-B).
Beer drinkers pay a fraction of a penny on each glass they purchase. As a beer drinker myself (I have Full Sail’s Pale Ale in my fridge at the moment),
Cannon has been using this tired one-liner about having a Full Sail’s in his fridge at the moment. He hopes some uneducated, weak-palated, half-witted beer drinker will embrace him as a comrade. Cannon keeps mentioning Full Sail, which is a fine brewery, does his palate stretch beyond this one beer? I have red numerous response letters from Cannon to folks in opposition to his tax proposal and for weeks he has been referencing this one brew. Is he familiar with the Oregon Brewers Guild and the nearly 50 craft breweries in the state? Does he not comprehend that Oregonians consume more of their state’s own microbrews than any other in the USA?
15 cents per beer seems like a fair amount to pay, if that money is earmarked for alcohol and drug related addiction and prevention services.
15 cents seems like a small amount to pay, but let’s take into consideration two things here: 1) This amount is only at one level. Oregon, like many other states, has a three-tier distribution law. This means that there has to be a distributor, or middle man, in the mix when beer is to be sold from the producer (the brewer) to the consumer (Joe Sixpack). This means that on three separate levels, to respond to a supposedly small tax, all three levels would bump up the price to assuage their needs to stay at the same profitability as before. 2) On what grounds does Cannon justify taxing craft brewers in order to fund drug related addiction and preventative services? Is craft beer like Hair of the Dog, Ninkasi, Rogue, Vertigo, Seven Brides, Caldera, etc what the majority of folks needing these services consume? Has Cannon conducted such a study. I liken this misguided swindle to the Clark County, Washington bill that attempted to ban all malted beveraged over 8%. Needless to say, that bill failed horrible when the community took into consideration Salmon Creek Brewing and By the Bottle who were selling craft and imported beers and helping to bolster Vancouver’s ailing downtown economy.
Why 15 cents? No, it wasn’t a random number we just threw out there. In fact, it’s the amount we need to fully fund addiction treatment and recovery programs in our state. We are currently $137 million short of fully funding addiction treatment – and further, drastic cuts are on the horizon. In addition, voters just passed Measure 57 in November, which calls for addiction treatment estimated to cost $48 million every two years. These are good programs, that save taxpayers money in the long run by stopping the cycle of addiction and crime. One recent study indicated that for every dollar we spend on treatment, we save $5.60 in other costs (such as incarceration and health care).
If Cannon really believes that something must be done, and he may be justified, to fully fund addiction treatment and recovery programs in Oregon, I suggest he take a better look at targeting a more causal group and employ more creativity and gumption. His justification is like saying, we need to stop violence in the state, so let’s target boxing and football programs. What about going after low-grade malt liquor companies that target low-income individuals in financially struggling neighborhoods? What about working to legalize soft drugs like marijuana and taxing the hell out of them? What about providing incentives for people to become involved in said treatment programs rather than lowballing Oregonians in a unwarranted, sweeping proposal to garner a quickfix windfall for his mission.
What’s more, by funding such programs through this measure, we take a significant burden off of the General Fund – which frees up hundreds of millions of dollars we can then put towards our hard-hit school budgets.
Most of the emails I’ve received are from people concerned about protecting craft breweries here in Oregon and the jobs they create, and I share those concerns.
Cannon says he “shares their concerns” but has no proposal to assist with them; no plan to encourage small business owners in the craft brewing community to soften the blow of his tumultuous taxation. If his bill were to pass, several microbreweries statewide would dwindle in production and many might even go under. Then, who would he tax? What would he tax?
In the past, beer tax proposals have come with an exemption for microbrews. I met with a great group of brewers a few weeks ago. I asked them for their ideas about how to increase the tax on beer in a way that protects them. What if we exempted them from the tax? What if we kicked back a tax credit? What if we changed the beer distribution system, which currently functions in a way that could allow middlemen to profit off the tax? As of our last conversation, the Brewer’s Guild opposes the tax even with an exemption. However, I am still actively seeking ways to protect local craft brewers while making this much-needed addition to our funding sources for addiction treatment and recovery programs.
What group of brewers? A-B? Miller-Coors? If they were craft brewers, what were their responses? He omits this outright. Ben Cannon-izes the issues and doesn’t go into specifics unless he is talking about the money and the treatment centers he needs. He uses blanket statements and half-hearted promises of tax credits and allowing the middle man to profit off the tax. Sorry, BC, but you’re living in the stone age. Do people really believe a man who keeps using the excuse of having a Full Sail pale in his fridge and other blanket statements to justify an outlandish tax proposal is going to take the extra step to ensure the security of our wonderful craft brewers? He wants to his us below the belt in a time when small business owners are already feeling the blow of a rough economy. Who the hell does Ben Cannon think he is?
I have opened to the door to the beer industry to talk about proposed amount. Should it be lower? Should it be 10 cents a glass? 7 cents a glass? Should a wine tax increase be included as well? Most of the emails that I have received from folks like you agree with me that some tax increase from a fraction of a penny is appropriate. But for over 30 years, powerful corporate lobbyists representing the beer distributors, Anheiser-Busch, and big tobacco have fought even the smallest increase in the beer tax.
How about 0%. For him to cite Anheiser-Busch, Big Tobacco and powerful corporate lobbyist as means to compare Oregonian’s vast palates, and to make mention of even a “fraction of a penny” tax is clear evidence this dude is lowballing us. Ask your friend to give you $100 dollars every day for a month, then the subsequent week, ask him for $1. He might just cave in. Don’t be a sucker!
HB 2461 is a starting point for a conversation that Oregonians must have. 85% of all property crimes are committed by a drug addicted person. At least 55% of all children taken from their families by the state had a drug or alcohol addicted person in the home. 477 Oregonians died in drunk driving related accidents in 2006. Untreated substance abuse costs Oregon $5.93 billion each year. I support dedicated funding for programs that will help decrease these numbers, and save taxpayer dollars in the process.
Actually, HB 2461 is an ending point…for Ben Cannon’s career at trying to represent those he clearly opposes. Methamphetamine abuse is a huge problem for Oregon. However, to accredit this to or make this and other drug abuse problems statewide the burden of Oregon Craft Brewers and those who depend on them for livelihood is utterly ridiculous! Show me the meth abusers and heroin addicts that quaff Deschutes, Standing Stone, Beer Valley, Oakshire, and I might not think Ben’s completely nuts.
Your advocacy is important and I appreciate it, even if we disagree on this one.
State Representative – House District 46
900 Court Street NE
Salem, OR 97301
Oh, and just because you sign your name with a lower case “b” doesn’t make you hip or down to our level. Cannon must go!
Yep, I received the exact same response word for word from him. You know he didn’t read any of what you wrote to him, just reply, copy, paste, send.
Angelo: Cannon’s district doesn’t include a single brewery, which is pretty strange for a fairly central chunk of Portland.
Jules Kopel-Bailey, the representative of the district just west of Cannon’s (the district I’m in), opposes a beer tax hike on the grounds that it is a regressive tax. Thank you, Rep. Bailey!
I got pretty much the same email a couple of weeks back. I did state that I have been thinking of starting a brewery and if this went through forget about me starting it in this state. He wanted to talk to me about my business plans and how he could help..bla bla bla…. I think if he actually proposed just taxing out of state producers people would go for it to a certain extent, the trouble with that however is that there is a lot of good craft brew coming from out of state as well. I don’t like the idea of a sin tax, I feel like he’s doing this because of all of the alcopops and cheap malt liquors but even if you tax those things you know it will make it’s way up the line.
Oh, and just because you sign your name with a lower case “b” doesn’t make you hip or down to our level.
Actually, it makes me consider recall proceedings and/or having his high school diploma revoked.
Yes, I am the Grammar Police.
I couldn’t even read the whole thing. The ignorance was so painful to even stomach.
The aggravating thing about this is that Ben Cannon knows that the “15 cents a beer” line is untrue. If Rep Cannon and company would be honest about the real cost to the consumer, I would have a little more respect for this. They’re purposely misleading the public with that line when they know it’s not true. Why can’t they level with people? Maybe because they know the public won’t go for 50cent to $1.25 more per beer (numbers I’ve seen that reflect the 15 cents after the three tier markup). At least be honest. That’s all I ask. maybe I’ll ask Ben and post the reply here.
Why not tax something that everyone needs and uses. Toilet paper anyone! Why single out beer or smokes for that matter? TP sounds a little bit more fair to me. Then I guess people will start using paper towels or baby wipes. Oh well I’m off to open a bottle Pliny.
A couple of things I will try to clarify:
The idea of only taxing out of state breweries is fine, but illegal. The federal Interstate Commerce Clause of the U.S. Constitution prohibits making laws that discriminate against out-of-state companies. That,in this case, may also apply to exempting small brewers as that is a pretty transparent attempt to, again, protect in-state brewers at the expense of out-of-state ones. Also, if it were legal and the price of Budweiser et al went up, it is likely that retailers or distributors or both would raise our pricing as well to maintain the pricing gap currently in place (because they can). Most chain retailers make their buying and pricing decisions at headquarters in some other state. They don’t care what our tax structure is, only their cost structure. Also, it is against anti-trust laws for suppliers to dictate pricing to distributors or retailers. That is why the Oregon Brewers Guild opposes tax increases, even if they have exemptions for small producers.
As you know, I’m as down on the beer tax as anyone, but I think it’s counterproductive to demonize people personally. Ben Cannon is a good guy (albeit a misguided one on the beer tax). I’m a political liberal, and I appreciate that we have him in the legislature–he’s to the left of all but a handful of others. In most cases, he strongly defends my positions.
You can’t expect a legislator to personally respond to every email he gets. The alternative is to have a staffer send something out, but then constituents aren’t even corresponding with their actual rep. I’ve emailed a lot of people, and I have to tell you that getting a response–any response–is rare.
Finally, my guess is that he cites Full Sail because they’re employee-owned. It’s a good answer for a pro-labor leftie.
Ben’s not the problem, the beer tax is. Let’s keep ’em separate.
@ Jeff: I understand your position and respect it. I also am not trying to demonize anyone, just trying to stir up some kind of reaction to get Cannon to realize how ludacris he is being. The “list of things you can do to stop the tax” post on every other blog is great, but seems as contrived as Cannon’s form response emails. I agree, Ben is coming straight with his other policies, but this one ruins all his other ambitions in my book. People can take it as seriously or as loosely as they like, but after all, I am writing about this on a beer blog. I endorse this. Also, if Ben is pro-labor, he ought to pull out of this cause because he is hurting an industry that makes Oregon unique.
As and out-of-Stater, I’ve been following the debate on HB 2461 with great interest. Though an increase in the tax won’t affect me on a daily basis, I don’t think its impact on the Oregon tourism industry – a point referred to by B. Tuwalski – should be underestimated.
My wife and I love Oregon. We first came there last Easter to attend the Spring Beer and Wine festival. We enjoyed ourselves so much, and were so enamored of the terrific beer culture we found, we subsequently spent a week during the Summer touring the State, ensuring each night was spent in a town with at least one brewpub.
We are planning a repeat performance this year, and intend to bring along family and friends – hoping they get as much pleasure visiting Oregon as we do.
Now, considering all the other expenses incurred while traveling – hotels, meals, fuel, etc… a modest (or even significant) increase in the price of a pint, won’t make much of an impact on a holiday budget. However, if the proposed beer tax does indeed impact negatively on the ‘mom and pop’ brewing culture of Oregon – perhaps resulting in the closure of some smaller operations, a significant impact on Beer Tourism will certainly occur.
There are many things to commend the State – not the least of which is the beautiful scenery. However, we have many of those same things near my home in British Columbia. We even have a handful of dedicated brewers, committed to providing terrific beers for people like me to enjoy. What we don’t have is such a pervasive brewing culture – a character I would suggest is unique worldwide. One that would be a shame to endanger with a reckless tax grab.
I know this issue has lost all relevance now, but I just stumbled upon this post and wanted to add my two cents.
I’m with Jeff on this one. This post, and many of the comments that follow it, demonstrate an attempt to single out and demonize one legislator out of several who co-sponsored this bill (just look at the image at the top of the page for proof). I was directly involved in this issue several ways: 1. My dad is an employee with Deschutes Brewery in Bend, and 2: I was a legislative intern with Rep. Cannon in the last session. As such, I have a unique first-hand understanding of how it went down. Look, and let me make it clear that I do not speak on behalf of Ben, the initial bill was a mistake as it was written. When it was amended to create a tiered tax to protect Oregon’s craft breweries, it was already too late. The legs had been cut out from beneath it and it was buried in committee, never to be seen again. And hey, I understand that. But what I’ve read here — the ignorance and vitriol aimed at a legislator who is trying to do what he thought was best for the state — is even more damnable than the tax as originally proposed.
For the record: I opposed HB 2461 in its unamended form, but supported it once Ben changed its provisions to tax craft breweries at a substantially lower rate.
Mary Sue: If you really care so much about Ben signing his emails “ben,” I can’t imagine what you think of the poetry of e.e. cummings. Ben is a Rhodes Scholar who attended Washington University in St. Louis and Oxford, in addition to being a middle school teacher. Do you really want to recall him for making a stylistic spelling choice for HIS OWN NAME?
Average Bill: The $1.50/beer figure you throw out there is preposterous, and more offensive than thinking that a $0.15 tax would translate equally at the end-consumer level.
Joel: What you’re suggesting is a sales tax. We’re one of a handful of states that doesn’t uniformly impose one, though certain municipalities (Ashland) and industries (hospitality) do. At last count, I think the sales tax has been shot down in OR nine times through the initiative and referendum process, but don’t hold me to that figure. Beer is taxed because it is a consumptive good that can often have a negative societal impact (drunk driving, alcoholism, related violence, cirrhosis, etc). Many argue that imposing a nominal tax is a kind of repayment for any detriment its legality may produce.
Gary: Art. 1, Sec. 8, Clause 4 — the interstate commerce clause — does not deny the states their right to levy taxes within their own border. Otherwise every business tax, every sales tax, every sin tax, etc would be unconstitutional. They are not.
And to everyone: Of course you are going to get essentially a cut-and-paste response. Ben’s email was swarmed with thousands of people lobbying against the tax, it would be ludicrous (or “ludacris” as Angelo chose to spell it) to expect a Representative to respond to each one individually. Being a state Representative is a full-time job for part-time pay, the legislative session flies by at a frenetic pace, legislators are perennially understaffed, and they have to prioritize communication with those people who live within their constituent districts.
My advice: spend some time in Salem getting to know the legislative process and the people involved before you make them out to be enemies of business or somehow anti-Oregonian. Focus your fights on the basis and merits of the legislation itself, and not the public servants who work tirelessly to find solutions to improve the state in which we all live.