Live From Olympia, with the WA Brewers Guild

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The first reports are coming in (see below). Today, I’m live in Olympia where members of the Washington brewing community have descended upon the state capitol. Leading the charge, the Washington Brewers Guild. The mission, engage in meaningful dialog with lawmakers and other officials. The goal, inform and educate. In other words, make them understand that the proposed beer tax plan is a bad idea because it would jeopardize one of Washington’s only growth industries.

I am on the scene, and will share what I learn from the brewers as they return from these meetings. The Washington Brewers Guild is on twitter, by the way. @WaBrewersGuild

10:45 – Members are gathered to discuss the different meetings, messaging and strategy. The key points include: unfair tax on one industry, impact on brewing industry and related industries, and more. Some brewers are already out meeting with folks.

11:27 – Tom Mace from Black Raven Brewing of Redmond, WA just returned from a meeting with Gerry Pollet from the 46th district. Pollet is the representative in Mace’s home district in Seattle, a district in which there are breweries. Representative Pollet is in favor of taxing the breweries and offered, basically, no support.

Mace also met with Rodney Tom and Cyrus Habib (both of from the 48th district). The 48th is the home district for Black Raven Brewing. Thank you, Reperentatives Tom and Habib!

11:49 – Heather McClung, President of the Washington Brewers Guild, and one of the owners of Schooner Exact Brewing, reports: Representative Sharon Nelson (34th district) backed out of a scheduled meeting.

11:55 – Steve from Dirty Bucket Brewing (Woodinville, WA) reports: “We had a brief meeting with Roger Goodman’s office, and although I didn’t get a strong feeling he was on our side, he did seem concerned about the affect the tax would have on all breweries in his district.” Goodman represents the 45th district.

12:01 – Heather McClung reports that, apparently, Representative Reuven Carlyle is in favor of reducing taxes on the “Big Boys” and increasing taxes on craft breweries. Carlyle represents the 36th district. He is the chairman of the House Finance Committee. This is bad news!

12:32 – CALL TO ACTION!

I am asking all concerned craft beer lovers, breweries and brewery employees to please contact members of the House Finance Committee. Ask them to support an amendment that would exempt microbreweries from any beer tax proposal out of the committee. Ask them to become a prime sponsor of the amendment. Tell them that they can contact TK Bentler about sponsorship. Get direct links to their contact info here.

Here are the members that need to be contacted (or use the link above).

Representative –   Phone
Carlyle, Reuven (D) Chair  – (360) 786-7814
Tharinger, Steve (D) Vice Chair  – (360) 786-7904
Nealey, Terry (R)  – (360) 786-7828
Orcutt, Ed (R) -  (360) 786-7990
Condotta, Cary (R) -  (360) 786-7954
Fitzgibbon, Joe (D)  – (360) 786-7952
Hansen, Drew (D) -  (360) 786-7842
Lytton, Kristine (D) -  (360) 786-7800
Pollet, Gerry (D)  – (360) 786-7886
Reykdal, Chris (D) -  (360) 786-7940
Springer, Larry (D) -  (360) 786-7822
Vick, Brandon (R)  – (360) 786-7850
Wilcox, J.T. (R)  – (360) 786-7912

12:54 – Joel, Mark and Brent from Two Beers Brewing (Seattle, WA) met with Representative Bergquist earlier. He speaks of a possible tiered tax system. Offers a little support, but says a tax will most likely happen. Bergquist represents the 11th district. See another update below regarding Rep. Bergquist.

Joel (Two Beers) met with  Representative Hudgins, also from the 11th district, who offered little support and said that he doesn’t know what will happen now.

Brent and Mark (Two Beers) met with Representative Pederson’s staff.  They were told that Representative Pederson is well informed and would like to see the exemption stay in place. Thank you Representative Pederson!  Pederson represents the 43rd district.

12:56 – This news comes from Donald and Bryan from Naked City Brewing (Seattle, WA). Representative Gael Tarleton (36th district) says she supports continuing the exemption and actually offered an alternative tax proposal. Good on ya, Representative!

UPDATE – I was contacted by Rep. Gael Tarleton’s office. They asked me to clarify her position: “Rep. Tarleton doesn’t like the tax, but talked about how they’re probably looking at an alternative tax proposal.”

1:13 – Pam and Oliver Brulotte, of Icicle Brewing in Leavenworth, WA report the following: “Met with Cary Condotta one of our 12th dist reps and he is very supportive of small business and specifically the craft brewing industry. He understands the need for our industry to continue to invest in our establishments and how higher taxes will impede this growth. ” Thank you Representative Condotta!

1:15 – Heather McClung reports that Representative Bergquist will support a tax raise of 15 cent per gallon. Note that the current proposal would be closer to 50 cents per gallon, but it still shows a lack of understanding of the impact tax increases will have on the craft beer industry and consumer.

1:41 – Heather McClung reports:

Representative Eilene Cody (34th district) says she will raise taxes on craft brewers. Senator Sharon Nelson, also of the 34th district, sounds unsupportive.

We are hoping Representative Joe Fitzgibbon will be persuaded to prime sponsor an amendment to exempt small brewers from any tax increases coming out of the House Finance Committee.  You can call Fitzgibbon’s offices at (360) 786-7952 or send him an electronic message (click here).

Tell Representative Fitzgibbon: “I would like you to prime sponsor an amendment to exempt small brewers from any tax increases coming out of the House Finance Committee.”

2:30 – Steve from Dirty Bucket Brewing also reports – “Met with Sen. Andy Hill (45th district) who chairs the Ways and Means Committee and is a strong supporter for the Craft Beer Industry. Very supportive and restated that the senate has submitted their budget proposal that allows the excise tax to not only sunset as promised, but does not impose any new taxes and comes up with 1.8 Billion for public education.”

2:45 – Roger from Georgetown Brewing reports that he met with a couple of people this morning/afternoon. First off, he met with Senator David Frockt (46th district). He did not commit, but seemed reasonable, understand the concerns, and agreed that this tax does not sound like the best idea. Thank you, Senator Frockt, but now we need you to commit to opposing any tax on craft beer.

Roger Also met with Representative Zack Hudgins of the 11th, as did others. He said that Hudgins was uncommitted, but sounded as if he understood the issue. Thank you, Representative Hudgins, now get onboard and oppose any tax on craft beer.

4:58 – The meeting with the Governor went well. He generously gave the Brewers Guild an hour of his time, especially generous during a budget session. He listened dutifully to the Guild’s positions. He seemed concerned not only about the impact it will have on Washington small businesses, but also the impact it would have on consumers. More details to come.

That’s encouraging, but it doesn’t mitigate some of the tough words coming out of the legislature against craft beer.

27 Responses to Live From Olympia, with the WA Brewers Guild
  1. Kim
    April 8, 2013 | 12:13 pm

    If you want to help our craft brewers today, call or e-mail your Washington State Legislator. Links and more here: http://www.craftbeer.com/action-alerts/support-your-local-brewery-alert-oppose-state-tax-increase-for-washington-small-brewers

  2. Craft Beer Monger
    April 8, 2013 | 12:24 pm

    Carlyle is an idiot for his idea to tax only small, local brewers & give a break to the ‘big boys’. I’m forced to wonder who from big beer is paying him under the table?

  3. Jack Hatley
    April 8, 2013 | 12:38 pm

    So we have representatives who are hiding from sight and others who apparently want to shift the lion’s share of the fee burden the small business owners.
    This is getting pretty hairy folks.
    Reuven Carlyle: so you want to tax the little guys more than the big guys? What sense does it make to tax a brewery that creates 10bbls a month more as a percentage of their production than a larger brewer? First off you are not going to get as much in revenue (since that is your goal right?) Second, the number of entities you are taxing will wither and die and this source will become reduced.

  4. Alex
    April 8, 2013 | 12:38 pm

    Is it too late to change my vote for Pollet?

  5. Kevin Klein
    April 8, 2013 | 1:20 pm

    Good for Gael. Met with her a while back and she totally gets what the craft industry means across the state, from retailers to brewers to agriculture in Eastern WA (hops and barley). For jobs, for the economy, and for bringing W and E washington together on certain issues. Now if only her counterpart in the district, Mr. Carlisle, would see just a little light.

  6. Kim
    April 8, 2013 | 2:02 pm

    Just sent a second e-mail to my rep, Eileen Cody letting her know that this news is deeply disappointing. Keep the news coming, hopefully we’ll hear some more good news soon.

  7. Kim
    April 8, 2013 | 2:07 pm

    Also just messaged my rep Joe Fitzgibbon, hoping for his support on this!

  8. Jack Hatley
    April 8, 2013 | 2:15 pm

    For further evidence that our State is about to take a backward step please see the study which accompanies the FEDERAL bill to reduce excise taxes to create more demand for craft beer and create jobs (ie: stimulate the economy). http://www.brewersassociation.org/pages/government-affairs/excise-taxes/economic-benefits
    This will be negated at our state level if we have this increase go through.

  9. Laht Neppur Brewing Co.
    April 8, 2013 | 2:23 pm

    Called and emailed:

    Gov. Jay Inslee
    Sen. Mike Hewitt
    Sen. Karen Fraser
    Rep. Maureen Walsh
    Rep. Terry Nealey
    Rep. Chris Reykdal
    Rep. Sam Hunt

    No responses yet.

  10. John VandenBrink
    April 8, 2013 | 2:24 pm

    I called Rep. Joe Fitzgibbon and sent him an email asking for his support on being a prime sponsor.

  11. Karinn Reister
    April 8, 2013 | 2:40 pm

    I sent messages to Senator Karen Fraser, and Representatives Sam Hunt and Chris Reykdal, and Joe Fitzgibbon, let’s hope they can get those in opposition to change their minds.

  12. Aubrey Laurence
    April 8, 2013 | 3:16 pm

    District 42 (most of Whatcom County) is looking good so far. I have already received two replies. Rep. Jason Overstreet said, “I agree and will not support an extended or expanded beer tax. In fact, let’s lower it.” And Senator Doug Ericksen’s assistant said, “I will make sure Sen. Ericksen sees your message. He supports letting the beer tax expire.” I have not heard back from Rep. Vincent Buys yet, though I just sent emails out on Friday.

  13. Ben
    April 8, 2013 | 3:41 pm

    I emailed my three 34th District reps five days ago, Weds 4/3. Of the three (Cody, Nelson, Fitzgibbon), I only received a response from Cody — it was noncommittal and canned (“it is my pledge to consider all viable options, to maximize our existing resources, and to make sound decisions”, etc.).
    .
    I’ve just left a voicemail for Fitzgibbon. Here’s hoping he’s more responsive and receptive.

  14. Devon Bray - Loowit Brewing Co.
    April 8, 2013 | 3:46 pm

    Emailed:
    Sen. Annette Cleveland
    Rep. Jim Moeller
    Rep. Sharon Wylie

    No responses yet.

  15. Ben
    April 8, 2013 | 4:18 pm

    I’ve also followed up with emails to Reps. Cody and Fitzgibbon.

  16. Sean
    April 8, 2013 | 5:12 pm

    I just wanted to add my two cents that there is probably some traction to be gained by framing this as an anti-small business tax. Those who don’t drink, may not feel the need to support a lower rate by craft brewers, but anybody who runs (or hopes to run) a small business may fear that this may happen to them one day.

  17. Marc Milrod
    April 8, 2013 | 5:19 pm

    I contacted my reps a while ago. I recieved one email response from Eileen Cody (at least she tried).

    Beyond opening remarks about some business she imagined I had (brewery or tavern), she dropped several fallacies worth mentioning leading one to perhaps understand the mindset in Olympia.

    “The beer tax was originally enacted as a temporary response to an economic recession. At the time, we could not have known how long that recession would continue, but our state still faces an immense budget shortfall. The Supreme Court has ruled that we must find an additional $1.2 billion in revenue to fully fund our education system.”
    Sentence 1, Increase taxes during a recession does not work out as planned, people withdraw spending.
    Sentence 2, Increasing taxes during a recession did not help after all (low hanging fruit are all rotten).
    Sentence 3, The Supreme Court did NOT require an additional $1.2 Billion in revenue but Olympia urgently need to FULLY FUND EDUCATION, now, now, now. This is different from what they are saying, even if the end product is the same, it can be arrived at by different means.

    Apparently this can has been kicked to a corner, the Supreme Court sez: do it now. Now Olympia as a whole has the nerve to act surprised, and are currently on a massive money hunt, and are grabbing all they find, ‘Thank you very much for your vote’.

    I have severe doubts any effort will dissuade Olympia from gouging any class of citizens or businesses that has money they can justify taking, to make up for decades of shortfall and legislative neglect and creative accounting.

    I for one am just glad the Supreme Court did not make them fix King County’s roads. In case you have doubts, we have some of the highest gas taxes in America with revenue slated for road repair, yet have some of the least maintained roads. Just where did this money collected for road repair go? Answer: the General Fund.

    IMO, this is a clarion call to eliminate the General Fund, to have dedicated line item budgets fiscally aligned with their tax revenue bases. If there isn’t enough revenue generated then edit-and-adjust collection or spending, but stop robbing one account to spend for any cause however noble or politically exigent.

    There is no real reason to continue having expensive special elections to float levy bonds for routine education spending as we did recently.
    Education (and many public projects) ought to have dedicated a slice of concrete revenue, assigned to an account that is proof against nameless pilfering. That is, IF they redirect the money whomever does has their names on the withdrawal slip so we know who to vote out of office and ride out of the state on a rail, or Tar-and-Feather as earlier Americans did.

    Sorry, Brewing community. I will continue to support at my same levels, but I think this one is a foregone conclusion (#@$% !).
    I also think we need new thinking in Olympia, and that may mean a whole slate (state?) of new legislators.

    Sorry I took up so much space.

  18. Laht Neppur Brewing Co.
    April 8, 2013 | 5:25 pm

    Just got a very supportive email back from Senator Hewitt. He states that he will continue to fight the taxation on craft brews just as he has in the past. Senator Hewitt wrote, “I voted against it three times and support the Senate budget proposal which does not raise or extend the beer tax.” Woot!

  19. Laht Neppur Brewing Co.
    April 8, 2013 | 5:31 pm

    And another positive email; this one from Rep. Nealey: “Thank you for your email. I agree with your position and plan to vote against the extension of the beer tax. There is a chance it will be incorporated into the overall budget, which will make it more difficult. We only get one vote on the budget as a whole. The Senate passed their budget out last Friday and did not include this tax increase. I will continue to follow this issue.”

  20. Good Beer Trips
    April 8, 2013 | 6:15 pm

    Marc, for the last few years the King County Sheriff’s Dept. has been receiving several millions a year from KC Roads. Thanks in part to laws passes after 9/11 allowing the transfer of the funds for Homeland Security. That may explain a part of why KC roads are in despair.

  21. James Fick
    April 8, 2013 | 10:41 pm

    I email Rep. Susan Fagan, Rep. Joe Schmick, and Sen. Schoesler from the Pasco area (my district). They all said they would oppose the proposal for the tax to continue (remember it was TEMPORARY) and also they would oppose applying it to below 60K barrels of production per year.

  22. Reuven Carlyle
    April 9, 2013 | 9:05 am

    Rep. Reuven Carlyle here. Like most folks I support a fair, balanced, and responsible approach, acknowledging that the vast majority of sales are from large scale commercial breweries and a much smaller number comes from high-quality, craft microbreweries – many of which are in the 36th district. And because I favor a fair and balanced approach I am extremely uncomfortable with the level of taxation proposed by Governor Inslee on small breweries. Asking you to pay the same $.50 / gallon surcharge as large brewers is, in my opinion, too heavy of a burden.

    Let’s take a look at the governor’s proposed numbers, breaking down the beer tax into its two parts.

    The first part is the state’s base beer tax. When a brewery produces more than 60,000 barrels per year, it pays a per barrel tax of $8.08 above that threshold, and $4.78 on everything else. No one has suggested any changes to this tax.

    The second part – the part that’s so contentious – is a $.50 / gallon surcharge. This number works out to $15.50 per barrel. As it currently stands, only large breweries pay this tax above the 60,000 barrel threshold. Small, micro, and nano breweries are exempt. Governor Inslee suggested that microbreweries also pay the tax, raising the total per barrel tax from $4.78 to $20.28. This is too much. Still, keep in mind that the current state tax level translates into a tax of: At the grocery store, a total 42.7 cents tax/six-pack and 8.3 cents/pint for macro breweries. Total 8.6 cents/six-pack and 1.7 cents/pint for microbreweries.

    Again, I feel this is too onerous for small brewers, and I’ve been engaged in negotiations and discussions with the governor to consider alternative plans that are far less impactful and punitive on the microbrew industry. At the same time, we have a responsibility to strive for a degree of equality and parity in how we tax alcohol from small crafted beer to the crafted spirits to large scale commercial beer, wine and spirits.

    Tomorrow, Wednesday, the House will announce its budget package, and I look forward to continuing this discussion. I really appreciate the strong dialogue from brewers around the state and the 36th district. In particular, I’d like to thank Mike Hale from Hale’s Ales, David Buhler from Elysian Brewing, George Hancock and Matthew Schumacher from Maritime Pacific Brewing, Bryan Miller and Donald Averill from Naked City Brewery, and Adam Merkl and Ryan Hilliard from Hilliard’s Beer, and many others who have reached out to me.

    My door is open. Send me an email with specific data, analysis and information that you think would be helpful for me to understand. Reuven.carlyle@leg.wa.gov

    Your partner in service,
    Reuven

  23. Kendall Jones
    April 9, 2013 | 9:27 am

    Representative Carlyle, thank you for such an informative and well-considered comment. And thank you for supporting craft beer! Your district has gained quite a reputation for its many breweries.

  24. Rob Lowry
    April 9, 2013 | 2:06 pm

    Contacted my Reps as well, and so far have only heard back from Senator Randi Becker, with the following from her assistant:
    Thanks for writing in to voice your support for “sunset” of the temporary beer tax. Senator Becker is “in your camp” on this issue, and we will be sure she is aware of your comments.

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