HomeMy WebLinkAboutMINUTES - 10171989 - IO.2 TO: BOARD OF SUPERVISORS �N�'sE L`°F_ Contra
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FROM: i ��
INTERNAL OPERATIONS COMMITTEE Costa
DATE: October 9 , 1989 eco ,�� County
ST'9 CpUK�
SUBJECT: STATUS REPORT ON LEGISLATION TO INCREASE THE EXCISE TAX ON
ALCOHOLIC BEVERAGES AND ON THE INITIATIVE TO ACCOMPLISH A
SIMILAR INCREASE IN THE EXCISE TAX ON ALCOHOLIC BEVERAGES
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECONMUMATIONS
1. Authorize the Chairman to send a letter to Assemblyman Lloyd
Connelly urging that the allocation of funds in the proposed
initiative be shifted so that the 40% going to the "Health
Services Account" is split in such a way that "Emergency and
Trauma Care" receives $120 million instead of $200 million
and "Mental Health and Medical Care" receives $200 million
instead of $120 million, with an emphasis on the latter
funds being used primarily to pay for the cost of health
care to indigents whose health care costs are the result of
the abuse of alcohol and drugs or dual diagnosis of mental
health and alcohol or drug involvement.
2. Request the Health Services Director and Alcohol Program
Chief to brief the Board of Supervisors on the status of the
initiative as events warrant.
3. Remove this item as a referral to our Committee.
BACKGROUND:
on July 25, 1989 our Committee provided our last status report to
the Board of Supervisors on efforts to pass legislation or an
initiative to increase the excise tax on alcoholic beverages.
Attached is a memo from the County Administrator' s Office
summarizing the status of legislation which was introduced in
CONTINUED ON ATTACHMENT.YeS YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR R OMMENDATION OF BOARD COMMITTE
APPROVE OT c '
SIGNATURE(S): SUNNE WRIGHT McPEAK
ACTION OF BOARD ON APPROVED AS RECOMMENDED X OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
X UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
CC: ATTESTED v /-7 /96 Q
County Administrator PHIL BATCHELOR,CLERK OF THE BOARD OF
Health Services Director SUPERVISORS AND COUNTY ADMINISTRATOR
Alcohol Program Chief
00
M382 (10/88)
BY � DEPUTY
1989 to increase the excise tax. None of the bills were passed
by the Legislature. The only bill which has passed its house of
origin is the bill carried by Senator Alquist which was sponsored
by the Wine Institute (SB 1597) .
Plans to qualify an initiative for the ballot in 1990 appear to
be going well. Actual signature gathering will begin in November
or December after the initiative has been filed with the Attorney
General and approved for circulation by the Secretary of State.
Attached is a memo from the Health Services Director providing
more information on the initiative.
The one aspect of the initiative which troubles our Committee is
the allocation of funds in the "Health Services Account" . Some
$200 million is reserved for emergency and trauma care and only
$120 million for mental health and medical care. Our concern
with this split in the funds is that there is the opportunity to
use a benefit assessment to fund emergency and trauma care, as
Contra Costa County is about to do and as Alameda County has been
doing for some time.
By contrast, there is almost no other mechanism available to
finance the mental health and medical care which results from the
abuse of alcohol and drugs, particularly by individuals was are
diagnosed as having a mental health problem as well as an alcohol
or drug problem. In addition, since 410 of all health care costs
are for acute hospitalization and since, according to the New
England Journal of Medicine, 50 of the acute hospitalization
costs go to 130 of the patients who, because of their lifestyle
(alcohol, drugs, smoking, nutrition, etc) , have impaired their
own health, it seems only appropriate that more of the funds
raised by the initiative go toward these mental health and
medical care costs.
We are therefore recommending that the Chairman of the Board of
Supervisors, who has been a leader in the initiative effort in
this County, write to Assemblyman Connelly and ask that $80
million of the Health Services Account be shifted from the
emergency and trauma care fund to the mental health and medical
care fund. Beyond that, we are asking that Mr. Finucane and Mr.
Nava keep the entire Board of Supervisors appraised of the status
of the initiative. However, there does not appear to be a need
to keep this item on referral to our Committee at this point.
invited the other Boards of participate to the extend possible.
A member of the Alcohol Advisory Board, Connie Stein, has offered
the resources of her business which includes 4 secretaries
xeroxing, mailing and phone capabilities. The drive to enlist
volunteers for the signature gathering process in this County began
on September 9th at a well attended gathering held at the Plumbers
Hall, 1304 Roman Way, Martinez. The meeting was conducted by the
Chair of the Board of Supervisors, Tom Torlakson. Those attending
were very impressed at the attendance of members of the Board who
not only gave of their time, but committed resources to assist the
process. As of this date of this memo, approximately 275
individuals have volunteered to donate a minimum of 3 hours of
their time to collect signatures. Also a volunteer has been
designated to deposit incoming funds into a separate account that
has been filed with the Secretary of State. The name of the
account is called "Contra Costans for the Alcohol Tax Initiative.
Citizens Against Substance Abuse. " Several of the Supervisors also
are involved in discussions regarding the process of forming a
steering committee, the purpose of which will be to raise funds,
to enhance the signature gathering campaign, and to publicize and
get endorsements for the tax initiative. The name of the steering
committee will be consistent with that of the account.
The current citizens ATI Committee will become part of the steering
committee and continue to be in contact with the statewide
coalition and Ken Masterton's office so that work can proceed in
a coordinated fashion.
Attachments:
A. Facts Regarding the Initiative
B. Revenue Distribution of the Initiative Proceeds.
cc Stuart McCullough
Gale Bataille
Jerry Nava
Chuck Deutschman
Eileen Lynch
Tom McClure, Chair Alcohol Advisory Board
Bill Kolin., Chair Drug Abuse Advisory Board
Cynthia Miller, Chair Mental Health Advisory Board
THE CALIFORNIA 1990 ALCOHOL TAX INPI'IATIVE
Why do we need to raise alcohol excise taxes in California?
Alcohol costs California more than $11 billion each year in health care, injuries, and other
expenses, however the estimated annual revenues produced from alcohol taxes total only $129
million. So even if all the alcohol taxes currently collected in California were spent on alcohol
problems, almost 99% of the costs of alcohol problems would still be unmet.
California has the lowest alcohol taxes in the country. The alcohol tax rate on dry wine
has not been-changed since 1937, when it was reduced from 2 cents to 1 cent per gallon. The
alcohol tax nate on beer has remained 4 cents per gallon since 1959 and the rite on distilled
spirits has been revised only twice - in 1955 and in 1967.
The overwhelming research evidence shows that levels of alcohol comsumption and
alcohol-related problems are price sensitive and that increasing alcohol taxes is an appropriate
and critical element in the prevention of alcohol-related problems.
How much money will be raised by the 1990 Alcohol Tax Initiative and how will it
be spent?
The proposed initiative will raise approximately $800 million annually. This will provide
a substantial and ongoing source of revenue for the very alcohol-related programs that are now
chronically under-funded.
The initiative will mandate that money raised will be spent in ways which reflect the
needs and costs of alcohol to society. The funds will be spent in ways which cover some of
the currently unmet costs of alcohol to California taxpayers and in ways which are designed to
prevent alcohol-related problems from occurring in the first place.
How much will the 1990 Alcohol Tax Initiative increase the cost of alcohol?
The "nickel a drink" tax translates approximately to increases of 30 cents per six-pack of
beer, 25 cents per 25 oz. bottle of wine, and 85 cents per fifth of distilled spirits. A drink is
defined as 12 oz. of beer, 5 oz. of wine; and 1 oz. of distilled spirits.
The cost of the alcohol tax increase to you depends on how much alcohol you consume.
If you drink two drinks a week, you'll pay an additional $5.20 per year. If you are part of the
5% of the population who drink 35 drinks or more a week, you'll pay $91.00 more per year.
Who is sponsoring the California 1990 Alcohol Tax Initiative?
Given the power and deep pockets of the beer, wine, and distilled spirits lobby, no one
group could successfully take on the issue of alcohol taxes alone. To address this, a broad
coalition of organizations and constituencies currently involved in the prevention and treatment
of alcohol-related problems, including the full array of alcohol organizations, County Boards of
Supervisors of the state's most populous counties, mental health organizations, and other
interested groups is working together. to craft the initiative and will form the backbone of the
statewide effort to qualify and pass it.
Why do an initiative rather than legislation?
The California Legislature has failed to pass any meaningful alcohol tax bills in the last
twelve years, largely due to the strength of the alcohol lobby. Between 1978 and 1988,
nineteen alcohol tax-related bills were introduced in the California legislature. Only one was
passed and signed into law. All but one of the rest either died in committee or were never
taken up for hearing by the authors.
The 'initiative process was a reform adopted in California during the progressive era at the
turn of the century. Specifically, it is a means to enable to people to enact legislation directly
in instances .when powerful special interest groups block the enactment of laws through the
legislature and the governor. This is exactly the situation we have now with alcohol taxes and
the beer, wine, and distilled spirits lobby.
What is the timeline for the 1990 Alcohol Tax Initiative?
September 1989 Initiative language to Attorney General's Office
November 1989 Signature gathering drive.begins
April 1990 Submit signatures to County Clerks for verification
Aug - Nov 1990 Campaign and Get-Out-The-Vote
How many signatures do we need to collect to qualify the initiative?
The number of valid signatures needed for the 1990 Alcohol Tax Initiative is 600,000.
Valid signatures are those which are: 1) registered to vote, 2) have filled out all information
correctly, and 3) have not signed more than once. To be certain of qualifying for the ballot,
we must gather at least one million signatures.
Why will we be successful?
Recent victories on the cigarette tax increase initiative (Prop. 99) and alcohol health
warning lables have laid the groundwork for a successful statewide campaign against a
formidable special interest group. The leadership of these efforts, which includes Assemblyman
Lloyd Connelly, are at the heart of the effort on this 1990 Alcohol Tax Initiative.
A major public opinion survey of Californian's attitudes towards an alcohol tax increase
on the ballot has been completed, and it confirms previous polls' findings that more than 70%
of Californians favor an alcohol tax increase. The flood of alcohol tax bills in the California
Legislature in 1989 shows that the alcohol industry has been conducting their own public
opinion polls and has been coming up with the same strong findings.
Current organizing efforts have identified contact persons in each of the state's major
counties and are now enlisting volunteers who will be trained to gather signatures starting in
November 1989.
For more information, contact your county contact at: Dale Sweetland
687-7953 '
alctax.q&a August 30, 1989
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OFFICE OF THE COUNTY ADMINISTRATOR
C O N T R A C O S T A C O U N T Y
Administration Building
651 Pine Street
Martinez, California
DATE: October 2, 1989
TO: Supervisor Tom Powers
Supervisor Sunne W. McPeak
INTERNAL OPERATIONS COMMITTEE
FROM: Claude L. Van Marter '�
Assistant County Adm itrator
SUBJECT: LEGISLATION WHICH ADDRESSES ATTEMPTS TO INCREASE
THE EXCISE TAX ON ALCOHOLIC BEVERAGES
On June 27, 1989 the Board of Supervisors referred to your
Committee a summary of legislation which has been introduced in
the State Legislature in an effort to increase the excise tax on
alcoholic beverages. The following is an updated copy of that
summary. Currently the Board of Supervisors has not taken a
position on any of these pieces of legislation.
There are currently seven pieces of legislation which address the
issue of an excise tax on alcoholic beverages in one way or
another.
AB 1712 (Harris) - As amended May 31, 1989.
Provides for the following increases in excise taxes on alcoholic
beverages:
Beer from $1. 24 per gallon. to $6. 51 per gallon.
Wine from $0 .01 per gallon to $0.66 per gallon
Distilled spirits from $2.00 per gallon to $3 .19 per gallon.
All increases would be effective July 1, 1990.
The bill appropriates revenues from these increases to the
Controller for allocation to the counties on a per capita basis.
The counties would then have to share the revenue with the cities
on a per capita basis. The bill does not designate how the
revenue would have to be spent, presumably leaving it as General
Fund revenue.
AB 1712 failed passage in the Assembly Revenue & Taxation
Committee on June 12, 1989 .
AB 2051 (Connelly) - As amended June 15, 1989
Imposes an unspecified tax on each alcoholic beverage on a per
drink basis (12. ounces of beer, 6 ounces of wine, 1 1/2 ounces of
distilled spirits) which apparently is to be collected at the
retail level. The tax would be effective January 1, 1990.
AB 2051 is currently on referral to the Assembly Revenue &
Taxation Committee. The bill did not receive a hearing
during 1989 .
AB 2066 (Rillea) - As amended May 24, 1989.
Increases the tax on beer from $0 . 04 per gallon to $0. 20 per
gallon, effective July 1, 1990.
Increases the tax on wine from $0 . 01 per gallon to $0.15 per
gallon, effective July 1, 1990 and at higher rates for wines with
a higher percentage of alcohol in them as well as for champagne
and sparkling wine.
Increases the tax on distilled spirits from $2.00 per gallon to
$3. 25 per gallon, effective July 1, 1990.
One-half of the increased tax revenue is allocated to the State
General Fund. Of the other one-half, 30% is allocated for drug
and alcohol abuse prevention, education, and treatment programs,
including activities in the public school. Forty percent of this
one-half is allocated to providing trauma care. The remaining
30% of this one-half is allocated for the cost of providing law
enforcement.
The bill also provides that each year the Board of Supervisors
will report to the Legislature regarding the accomplishments of
drug and alcohol abuse prevention, education and treatment
programs funded by this legislation. The bill also requires that
a specific type of evaluation mechanism be designed, including
specific numerical objectives which must be met or exceeded if a
program is to be judged successful.
AB 2066 has passed the Assembly Revenue & Taxation Committee
and is currently on referral to the Assembly Ways and Means
Committee where it failed passage on June 20 , 1989 .
Reconsideration has been granted.
AB 2441 (Cortese) - As introduced.
This bill would increase the tax only on wine from $0. 01 per
gallon to $0. 10 per gallon and at higher rates for wine with
higher alcohol content.
The bill also provides that it would only becomes effective if
ACA 41 (Cortese) is approved by the voters.
AB 2441 is currently on referral to the Assembly Revenue &
Taxation Committee. The bill did not receive a hearing
during 1989.
ACA 41 (Cortese) - As introduced.
This proposed amendment to the State Constitution would exempt
from state and local agencies' expenditure (Gann) limits the
proceeds of any increase in the excise tax on wine which are
levied on or after January 1, 1990 .
ACA 41 is currently on referral to the Assembly Revenue &
Taxation Committee. The bill did not receive a hearing
during 1989.
SB 1243 (Garamendi) - As introduced.
At this point this is only a spot bill which makes only technical
changes to the tax on alcoholic beverages.
SB 1243 is currently on referral to the Senate Revenue &
Taxation Committee. The bill did not receive a hearing
during 1989.
SB 1597 (Alquist) - As amended May 11, 1989.
SB 1597 is an identical companion bill to AB 2441 which increases
the excise tax on wine from $0.01 per gallon to $0.10 per gallon.
SB 1597 passed the Senate June 28, 1989 by a vote of 28:5
and is currently on referral to the Assembly Revenue &
Taxation Committee. The bill has not received a hearing in
the Assembly during 1989.
CLVM:nrl
alcohol
cc: Health Services Director
Mental Health Director
Alcohol Program Chief