New California Alcohol Tax Bill

September 24, 2015

During the recent special session of the California Legislature dedicated to healthcare funding, Assembly Member Susan Bonilla (D-Concord) introduced Assembly Bill X2-18, a bill to levy a 5-cent tax increase on distilled spirits sold at bars and restaurants. The bill was announced as a strategic approach to fund disabilities services. Proponents call it the "Cocktails for Healthy Outcomes Act."

ABX2-18 would address severe cuts to services for developmentally disabled Californians in the last decade and help the state comply with the Lanterman Act, which requires that such services be provided. A Public Policy Institute of California survey revealed that 62% of likely voters, and 73% of parents with children 18 or younger, support increasing state alcohol taxes.

California tax rates on beer, wine, and spirits are abysmally low, and have not seen an increase since 1991. Since California's alcohol tax rates are not annually indexed to inflation, the state beer tax rate has lost 42% of its value since its last increase. ABX2-18 includes an inflation index.

According to the Alcohol Justice tax calculator, a state nickel-a-drink increase for all types of alcohol would raise $802 million annually. Alcohol Justice supports this bill for raising the price of an under-taxed, harmful product and for raising revenue for health and human services. We also believe that a significant excise tax increase with an inflation index would be very efficient, and Alcohol Justice wiil soon be calling upon Governor Jerry Brown to introduce an increase in the alcohol excise tax in his FY 2016-2017 budget.

Take ACTION on the 5-cent cocktail tax here.