Governor Tom Vilsack is proposing an increase in the state tax on beer, but lawmakers are quickly rejecting the idea. Vilsack proposes a 10-cent-per-gallon increase in the state tax on beer. Today, the beer tax is 19 cents per gallon.
Senate Co-Leader Michael Gronstal of Council Bluffs, who like Vilsack is a Democrat, says a beer tax increase won’t happen. Gronstal says Vilsack told him he was adding a beer tax increase on top of his requested cigarette tax increase. “I don’t think adding another tax increase is going to help get Republican support,” Gronstal says.
Republican Representative Jamie Van Fossen of Davenport, chairman of the House Ways and Means tax-writing Committee, agrees. Van Fossen says it was a bad strategic move on Vilsack’s part since the governor is already finding it difficult to get legislators to pass an increase in another “sin tax” — the tax on cigarettes and other tobacco products. “You know I quit drinking so it won’t affect me as much as it will my constituents,” Van Fossen says. “I don’t like it.” Van Fossen last year considered but rejected the idea of creating a new “sin tax” — a state tax on pornography.
During his “Condition of the State” message, Vilsack did not mention his call for increasing the state beer tax, but the governor did say most Iowans favor a hike in the cigarette tax because higher-priced smokes lead some to kick the habit and prevent others from starting.
Gronstal, the Democrat Leader in the Senate, suggests there’s still a chance a cigarette tax increase might pass the 2006 legislature. Gronstal says Iowa has one of the highest beer taxes in the region, but one of the lowest cigarette taxes. Vilsack wants an 80-cent-per-pack increase in the state cigarette tax.
Republican House Speaker Christopher Rants of Sioux City is a no vote on increasing any so-called “sin” tax. “We’re not going to be raising taxes on beer and taxes on cigarettes,” Rants says. “I think it’s the wrong thing to do.”