CALIFORNIA ELECTIONS: THE AD CAMPAIGN

The ballot measure: Proposition 134, to increase taxes on beer, wine and distilled spirits. Whose ad: Californians for Nickel-a-Drink.

The organization’s first radio advertising campaign features two 60-second and one 30-second spot. The ads feature a conversation between a man and a woman.

Elements of the ads, with an analysis by Times staff writer Virginia Ellis:

Ad: “I read the alcohol tax initiative, like all those ads said . . . and they were wrong. There’s no income tax in it. There’s no sales tax.”

Analysis: The reference is to advertising by Taxpayers for Common Sense, an organization financed by alcoholic-beverage interests to oppose Proposition 134. Those ads suggest that Proposition 134 would raise income or sales taxes. There is nothing in the initiative that raises anything other than taxes on beer, wine and liquor, but there are requirements that state spending on certain programs related to preventing drug and alcohol abuse not be cut. It also mandates increased spending on these programs to keep up with inflation and population growth. The industry contends that this could lead to further tax increases.

Ad: “There’s just a nickel a drink . . . “

Analysis: Actually, the tax increases would not be levied at the consumer level but at the producer level. The per-gallon tax on wine would jump from a penny to $1.29, on beer from 4 cents to 57.3 cents and on distilled spirits from $2 to $8.40. Proponents say the tax increase would work out to a nickel a drink. But the industry claims that by the time it reaches the consumer it will be much more. Because taxes are levied at the producer level, they say they become incorporated into the price of the product. The wholesaler and retailer than take their percentage of that price. When the price becomes higher, the amount they charge the consumer therefore become proportionately higher. Supporters of Proposition 134 say that for competitive reasons, they doubt the industry will treat the tax increase in this manner.

Ad: “Taxpayers for Common Sense . . . the political front group sponsored and financed by the liquor industry . . . spending millions of dollars to beat Proposition 134...”

Analysis: Taxpayers for Common Sense is financed by beer, wine and liquor interests. It has already raised nearly $14 million to defeat Proposition 134 and its own leaders have predicted it will raise and spend $18 million by the November election.