Liquor Industry Leads Business in Contributions to Initiative Races

Trying to beat back a stiff alcohol tax increase on Tuesday’s state ballot, alcoholic beverage interests have poured $28 million into initiative campaigns, the largest amount by a single industry since the insurance measure wars of the last election.

Business and agricultural interests have contributed a total of $57 million in the battle over a variety of propositions for increasing their taxes and regulating the environment.

The money has flowed from oil and chemical companies trying to defeat Proposition 128, the “Big Green” initiative which would limit pesticide use and offshore oil drilling. It has come from timber interests fighting Propositions 130’s plan to preserve ancient redwood forests and limit timber-cutting, and from the alcohol interests countering Proposition 134, the so-called “nickel-a-drink” tax increase.

The total industry spending, compiled from financial reports filed with the secretary of state’s office, dwarfed the amounts collected by environmental and political activists to promote their proposals. With those groups amassing less than $12 million, they were outspent nearly 5 to 1 by industry money.

“(Industries) fear (that) what happens in California will spread to other states. We do set the trend and that’s why alcohol, chemical, oil and timber interests see it as World War III whenever we try to have them fairly foot the bill for the costs (imposed) by their products,” said Steve Hopcraft, a media consultant for Californians Against Initiative Fraud, a coalition opposing Proposition 136. If successful, that initiative would immunize alcoholic beverages and tobacco from future tax increases of more than 1% and cancel the nickel-a-drink initiative if it gets less than a two-thirds vote Tuesday.

Backers of the measure have collected $7.8 million, with support from alcohol, tobacco and oil companies.

Political consultants for the alcohol industry agree that the rest of the country is watching what happens in California.

“Clearly there’s a concern that (these proposals) would spread, as there is any time there’s any initiative on the ballot in California,” said Rick Manter, campaign manager for Taxpayers for Common Sense, a political committee organized by the industry to defeat the nickel-a-drink tax.

Tapping foreign-owned companies for nearly 25% of the total, alcoholic beverage interests have collected $21.3 million to defeat Proposition 134, another $1.6 million for efforts to pass a smaller industry-backed increase contained in Proposition 126 and $5.2 million to help pass the tax-killing Proposition 136.

To defeat Proposition 128, the so-called “Big Green” initiative, industry sources have reported collecting almost $11 million. Many of the same firms, including oil companies and agribusiness interests, have provided an additional $5.5 million to support a counter-measure of their own, Proposition 135.

Top contributors for the industry effort have been Arco, Chevron and Shell oil companies, with combined donations of more than $2 million.

Timber interests have contributed close to $10 million to oppose Proposition 130, the forest-protection initiative placed on the ballot by environmental activists, and to promote Proposition 138, the industry-backed alternative on the same ballot.

But none of the industry contributions reached the magnitude of insurance industry spending two years ago when the industry alone collected about $75 million for a battle over measures dealing with state regulation of insurance.