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HomeMy WebLinkAboutMINUTES - 06191990 - 1.38 t -038 M TO: BOARD OF SUPERVISORS � ......... sL Contra FROM: CoSta Phil Batchelor, County Administrator -z -Y...: �.. County DATE: June 11, 1990 rT9 COUK� SUBJECT: LEGISLATION: ASSEMBLY CONSTITUTIONAL AMENDMENT 38 (Cortese) SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION Indicate that the Board of Supervisors continues to OPPOSE ACA 38 by Assemblyman Cortese which would provide an alternative to the pending Alcohol Tax Initiative and place a lower level of alcohol tax into the State Constitution than is being proposed in the initiative effort. BACKGROUND: On April 3 , 1990 the Board of Supervisors voted to oppose ACA 38 by Assemblyman Cortese. On June 5, 1990 the Board of Supervisors reaffirmed its opposition to ACA 38 as the measure was amended May 9 , 1990 . On June 12, 1990 the Board of Supervisors reaffirmed its opposition to ACA 38 as amended on May 17, 1990. On May 29, 1990 the measure was again amended. Current statutory law places an excise tax on. alcoholic beverages. These taxes have not been raised for many years. The Legislature has been unable to generate the will to increase these taxes. As a result, Assemblyman Connelly has headed up an initiative effort which would place on the ballot a substantially increased level of tax on alcoholic beverages. It now appears that this initiative has qualified for the November 1990 ballot. The initiative would raise about $800 million a year, nearly all of which would be dedicated to specified drug, alcohol and health CONTINUED ON ATTACHMENT:Ye S YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): UjIaf- y ACTION OF BOARD ON June719, 1990 APPROVED AS RECOMMENDED _ OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE 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. Q CC: ATTESTED 9 // P6 County Administrator PHIL BA HELOR,CLERK OF THE BOARD OF Health Services Director SUPERVISORS AND COUNTY ADMINISTRATOR Drug Program Administrator Alcohol Program Administrator M382 (10i88)"Les Spahnn, SRJ. Jackson, Barish &Y Asse 'DEPUTY 4- care programs at the local level. The proposed initiative effort is an initiative statute which simply increases the level of tax which is now in the statutes and specifies how much of the increased tax will go to each of the specified programs. The alcoholic beverage industry has convinced Assemblyman Cortese and 16 co-authors, including the Speaker of the Assembly and the Majority Leader of the Senate, to amend ACA 38 to provide for an alternative increase in the alcohol tax. (The Committee analysis done for the hearing on April 4, 1990 lists as supporters of ACA 38 the California Beer and Wine Wholesalers Association, the Distilled Spirits Council of the U.S. and the Wine Institute) . The intent is apparently to place ACA 38 on the November, 1990 ballot along with ' the Alcohol Tax Initiative, assuming the initiative has now qualified for the ballot. As amended May 29, 1990, ACA 38 does all of the following: 1. Locks into the Constitution the present level of alcoholic beverage taxes and then imposes a surtax on these taxes. BEVERAGE PRESENT PROPOSED TAX SURTAX TOTAL (all figures are cents per gallon) Wine - 140 or less alcohol Effective March 1, 1991 1 19 20 Wine - More than 14% alcohol Effective March 1, 1991 2 18 20 Beer Effective March 1 , 1991 4 16 20 Distilled Spirits - Proof strength or less Effective March 1, 1991 200 130 330 Distilled Spirits - More than proof strength Effective March 1, 1991 400 260 660, A corresponding surtax is imposed on all floor stocks which are the possession of any person licensed as an alcoholic beverage retailer as of March 1, 1991 and on which the surtax has not yet been paid, with the exception of beer and wine which are in the possession of an alcoholic beverage manufacturer and with the exception of distilled spirits which are in the possession of a distilled spirits wholesaler or importer. 2.' The proceeds from the surtax would be deposited in the State General Fund for allocation as the Legislature might determine. There is an uncodified statement of intent that the portion of the additional revenues which would go to the schools under existing law may be made available to combat the use of illegal drugs and alcohol abuse by improving the long-term effectiveness of educational programs. For the portion which is not allocated for use by the schools there is an uncodified statement of intent urging that the funds be made available to California counties and other local agencies for stronger law enforcement and the prevention, arrest, prosecution, and incarceration of drunken drivers, for the prevention of the possession, use, or sale of illegal narcotics or controlled substances, for medical treatment, including emergency trauma care, mental health and long-term rehabilitation and recovery programs as well as for educational programs. We do not believe that this statement of intent, other than as may be accepted by a court as an expression of the intent of the voters, is in any way binding on the Legislature in terms of restricting their ability to appropriate the funds for any legitimate public purpose. 3 . ACA 38 increases the State' s Gann Appropriations Limit by the amount of revenue received from the surtax on alcoholic beverages for the 1990-91 fiscal year. It does not, however, increase the Gann appropriation limit of the counties for the same purpose. Effective with the 1991-92 fiscal year, ACA 38 adjusts the State' s Gann appropriation limit each year by the amount of the alcoholic beverage surtax, in addition to any other adjustments which are made by law. 4 . The estimate of the revenue which would be produced by the surtax is as follows, according to the staff from the Board of Equalization: Revenue Increases in Millions of Dollars 1991-92 fiscal year and thereafter Wine $ 17. 9 Beer $114.7 Distilled Spirits $ 52. 0 TOTALS $184 .6 These amounts of revenue should be placed in perspective. The proposed Alcohol Tax Initiative would raise an estimated $800 million annually, more than four times as much as would be raised by ACA 38 . 5. ACA 38 provides that if it and the Alcohol Tax Initiative both qualify for the November 1990 ballot, whichever measure receives the most votes shall prevail and the other measure shall have no effect. Despite the fact that ACA 38 has been amended so that it will no longer automatically prevail over the Alcohol Tax Initiative, we believe that it is still appropriate for the Board of Supervisors to express its opposition to the measure, primarily on the basis that if it draws more "yes" votes than the Initiative ACA 38 will prevail and raise insufficient funds to address the alcohol and drug abuse problems in California. ACA 38 passed the Assembly on June 26 , 1989 before it was amended to address the increase in the alcoholic beverage tax. The measure passed the Senate Revenue & Taxation Committee on May 8 , 1990 by a vote of 5: 2. The measure passed the Senate Constitutional Amendments Committee on May 15, 1990 by a vote of 3 : 0 and passed the Senate Appropriations Committee May 25 by a vote of 8:1. The measure is now on third reading on the Senate Floor.