Spiking your holiday eggnog could be getting a little pricier. Governor Arnold Schwarzenegger recently proposed raising California's alcohol tax by a nickel a drink. Cash-strapped states are scrambling to find ways to raise funds to avoid cutting critical services to residents. California is the 27th state this year to focus on alcohol taxes as a money maker. Last week the Governor suggested increasing the state tax on beer, wine and liquor to help prevent a $40 billion shortfall in the state budget. Schwarzenegger said the tax increase would generate $900 million in new revenue over the next 18 months.
While some states like California are using booze to raise money by increasing existing taxes, others are boosting state revenues by lifting Prohibition-era bans on Sunday liquor sales. Colorado, which made Sunday liquor sales legal this summer, attributes a 7% increase in the state's excise tax returns to Sunday alcohol sales. Unlike some states which dump alcohol revenue into a general fund, California lawmakers have pledged to use the money generated from the 5-cent tax increase to fund drug and alcohol abuse treatment and prevention programs. Without the tax increase, these programs are in jeopardy of being eliminated from the state budget.
Since the prohibition, states have turned to alcohol for tax revenue. Today, about 50% of the purchase price of a bottle of liquor goes to taxes and fees. Industry experts estimate that the Governor's proposed tax increase would increase the cost of beer and wine by more than 8%. Critics charge the increase would negatively impact the state's hospitality industry and could result in the loss of 20,000 jobs and $1 billion in sales revenue. Proponents suggest that like increasing tobacco taxes, increasing taxes on alcoholic beverages could lead to a decrease in alcoholism and drunk driving accidents.
In California, driving under the influence (DUI) and driving while intoxicated (DWI) can have serious consequences. Conviction can result in expensive fines and fees, loss of driving privileges, even jail time. With so much at stake, it's important to contact an experienced criminal defense attorney if you are charged with DUI or DWI. Repeated drunk driving offenses can result in a charge of negligent operator which can result in long-term suspension of your license.
