OPINION: Oregon brewers can't afford a new state tax Increase
When pFriem Family Brewers was ordered by the state of Oregon to close our tasting room and restaurant, it was devasting to our business. The restaurant is a third of our business and half of our beer production is sold in kegs to other restaurants across the state — other restaurants that were also forced to close. Sadly, this resulted in us losing more than 60% of our employees, who are like family to us.
Even with restaurants partially reopened, our business was down by about 50%. For the safety of our customers and employees, we operated with outdoor-seating-only this summer and only recently opened our inside tasting room at limited capacity, only to have it closed again by the new freeze.
The last thing we need as a small business dealing with a COVID-19 recession are tax increases.
Yet the Oregon Health Authority has released a proposal to Gov. Kate Brown with a recommendation aiming to raise $293 million in the 2021-22 budget through tax increases on beer, wine and cider. That's an 800% tax increase on an economic segment that is an essential part of Oregon's economy and identity.
What's worse, OHA's proposal would only dedicate 10% of the tax money to substance abuse programs.
Prior to the COVID-19 pandemic, Oregon was home to 400 breweries, which helped create 43,000 good-paying jobs and $2 billion in annual wages for Oregonians. Unfortunately, a recent economic report from the Beer Institute and Brewers Association estimates 10,000 of those Oregon beer jobs will be lost by the end of 2020 because of the COVID-19 recession.
Oregon is proudly one of the birthplaces of the craft beer movement, with pioneers like Widmer Brothers, Deschutes and Rogue.
Beer is part of the fabric of our state, which is likely why 81% of Oregonians oppose increasing the state's beer tax, according to a recent Patinkin Research Strategies survey. And at least seven in 10 Oregonians said they are concerned additional taxation would hurt Oregon brewers.
Tax increases only make it harder for brewers to invest in rehiring, equipment, upgrades and expansion, and will result in higher prices for consumers. For perspective, Oregon's average beer price is already the tenth highest of 50 states.
With restaurant, bar, brewpub and tasting room closures this year, the beer, wine, cider, spirits and hospitality sectors have already taken one for the team. Raising taxes on an industry that is the third-largest source of revenue for the state will add insult to injury for those businesses already overwhelmed by COVID-19.
In order to survive, Oregon's breweries, wineries, cideries, distilleries, restaurants and bars need the support of our elected officials. We hope Gov. Brown and lawmakers in Salem realize now is not the time to be raising taxes on our homegrown businesses.
Ken Whiteman is co-founder of pFriem Family Brewers in Hood River and vice president of the Oregon Brewers Guild.
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