House and Senate Democrats differ on alcohol tax

DFL legislative leaders appear to be at odds over raising taxes on alcohol.

DFL Senate Majority Leader Tom Bakk said this morning that the Senate tax bill will not increase the liquor tax, while the House DFL plan includes an increase in the excise tax on alcohol.

DFL House Speaker Paul Thissen said House Democrats are proposing the increase because problems related to alcohol cost the state a lot of money.

“Conservative estimates say that about $2 billion in state costs, including DWI related costs, health care costs and a whole variety of other costs, are paid out by the state related to alcohol use,” Thissen said at a University of Minnesota Humphrey School event. “And particularly alcohol use by those who use it excessively.”

Gov. Dayton did not include an alcohol tax hike in his budget plan but didn’t outright oppose the idea when speaking with reporters last week.

Thissen said the alcohol tax will amount to roughly seven cents a beer. But Bakk and others believe the tax will be higher.

Bakk said he doesn’t think there’s as much support for raising alcohol taxes as there is for a cigarette tax increase.

“Even among smokers I don’t think there’s a lot of anxiety about raising the tax,” Bakk said “I think when you go to alcohol it’s a lot of different. Clearly it’s 80-85 percent of people and most of them don’t want to quit – unlike cigarettes.”

Gov. Dayton, House Democrats and Senate Democrats are all proposing an income tax hike on top earners and increasing the tax on cigarettes. Bakk said “the die is cast” on those tax increases becoming law.

Senate Democrats are expected to release their tax bill tomorrow. It’s likely to also include expanding the sales tax to some consumer services and lowering the sales tax rate.

Bakk and Thissen stressed the need to raise taxes both to erase the state’s projected $627 million revenue gap and to spend more on early childhood education, K-12 schools and higher education. Bakk admitted that some of the tax proposals will be unpopular with the public but said a quality education system is vital to Minnesota’s economic climate.

“Some people are probably going to lose some elections because we’re going to raise some taxes, and many Minnesotans aren’t going to understand why we had to do that but sometimes leading is not a popularity contest,” he said.

Bakk also told reporters that the Senate is unlikely to take up a bill legalizing same-sex marriage or a bonding bill unless he has assurances that the House can pass those measures.

It’s not clear whether there are the votes in the House to pass the same-sex marriage bill. Democrats are unlikely to take the issue up until after all of the budget bills are passed.