How’s this for a trade-off: End sales taxes on tampons and diapers, but raise liquor taxes
The slogans are simple, and meant to convey a clear choice.
“It’s time to tax liquor before ladies,” Assemblywoman Cristina Garcia (D-Bell Gardens) said.
“We should be putting babies before booze,” Assemblywoman Lorena Gonzalez Fletcher (D-San Diego) echoed.
Garcia and Gonzalez Fletcher made the pitches at last month’s unveiling of their proposal to eliminate sales taxes on tampons and diapers and make up for the lost revenue by hiking alcohol taxes.
But if history is any indication, their bill is likely to fail.
For more than a decade, polls have shown Californians overwhelmingly support raising alcohol and other “sin taxes.” Yet despite numerous attempts, state lawmakers haven’t increased the alcohol tax since 1991. The reasons for the failures — from the power of the liquor lobby to the general difficulty in raising taxes — reveal the high hurdles the bill will need to clear, even as a growing national movement has pushed for legislation to exempt tampons and diapers from taxes in statehouses across the U.S.
“I know it’s a hard ask,” Gonzalez Fletcher said. “We knew that going in.”
California’s current alcohol tax, $3.30 per gallon of distilled spirits, ranks 39th in the country. Judging by public opinion alone, an effort to raise it wouldn’t seem that difficult. At least 61% of residents have backed hiking alcohol taxes in nine Public Policy Institute of California surveys over the last 14 years. The most recent survey in November 2014 found 68% in support.
But alcohol interests have long been powerful at the Capitol. In the first half of the 20th century, liquor lobbyist Artie Samish was so influential he once demonstrated his clout to a photographer by pulling a ventriloquist’s dummy from his closet that he’d nicknamed “Mr. Legislature.”
While the liquor industry’s power has declined since, it’s still a player. Donations from alcohol interests to state politicians and political committees topped $2.5 million last year, according to the National Institute on Money in State Politics. When former Assemblywoman Susan Bonilla (D-Concord) proposed raising the alcohol tax in 2015 by a nickel per cocktail to boost services for the developmentally disabled, the industry’s reaction was swift and strong, she said.
“They were very alarmed and they did not want to see this conversation happening,” Bonilla said.
Her bill never received a full vote in the Assembly. Bonilla likened the situation to the state’s efforts to increase the tobacco tax, which also had strong support in polls but stalled multiple times in the Legislature. In November, state voters approved a $2-per-pack hike in the cigarette tax despite a $71-million opposition campaign from the tobacco industry.
Bonilla, who supports Garcia and Gonzalez Fletcher’s bill, said it might ultimately take a ballot measure to raise the alcohol tax.
“There is definitely an opportunity for the voters of California to weigh in for where some grave needs in the state could be met,” she said.
Garcia and Gonzalez Fletcher initially didn’t want to take the politically challenging route of raising alcohol taxes.
Last year, they wrote bills that would have exempted sales taxes on diapers and tampons and other women’s health products, but didn’t provide a revenue source to cover the $45 million it would have cost. The measures unanimously passed the Legislature, but Gov. Jerry Brown vetoed them, saying they were too expensive.
The current measure, Assembly Bill 479, would increase the tax by $1.20 per gallon of liquor lower than 100 proof, with a larger increase for liquor with a higher alcohol content, and wouldn’t address beer or wine sales. The lawmakers estimate the increase equates to 2 cents per cocktail.
The legislation fits alongside a boom in statehouses across the country to exempt diapers and tampons and other women’s health products from sales taxes.
Connecticut and Washington, D.C., passed legislation last year to eliminate sales taxes on diapers, and bills in 16 states this year would do the same on at least some diaper purchases, according to the National Diaper Bank Network.
Lawmakers in 23 states have introduced legislation over the last two years to eliminate sales taxes on tampons with successful efforts in Connecticut, Illinois and New York, said Jennifer Weiss-Wolf, author of a forthcoming book on the issue, “Periods Gone Public.”
Garcia said she’s seen the conversation over the exemption change since she introduced her first bill in early 2016. She said her colleagues and others would joke that she should quit talking about her period or refer to the legislation as a “bloody fight.”
“Not everyone was ready,” Garcia said of the initial reaction to her bill. “I’m going to be fearless and unapologetic about it. My health is not something that’s funny.”
She still believes the state should be able to shoulder the eight-figure cost of exempting tampons from sales taxes in a $180-billion annual budget without having to identify an additional source of funds.
“I think the fact that there’s a tax that’s discriminatory against women is enough,” Garcia said.
While proposing a tax increase aims to satisfy the governor’s cost concerns, it’s difficult to pass. The state Constitution requires a two-thirds supermajority vote of the Legislature for any tax increase, and a bid to boost the gas tax to pay for road repairs barely scraped by last week.
Lawmakers also could face a supermajority vote this year to reauthorize the state’s spending plan to combat climate change, and multiple other bills to increase dollars for low-income housing development also remain on the docket.
Garcia and Gonzalez Fletcher said they recognized their measure could get lost in the spate of tax votes, but they argued their bill would enable lawmakers to reveal their priorities — hence the “babies before booze” slogan.
Manuel Espinoza, the executive director of California Wine & Spirits Wholesalers Assn., said his industry recognizes that alcohol taxes are low compared with those in the rest of the country. But, he said, the cost of doing business in the state is high.
“New taxes means passing it along to the consumer and no one likes doing that,” Espinoza said.
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