New York could tax beer to raise money for colleges

Levy on a gallon of suds would more than double

A proposal to more than double New York’s beer tax and use the money to pay for public colleges is gaining traction.

Continue Reading Below

State Assemblyman Harvey Epstein, a Democrat, introduced a bill at the end of 2019 that would increase the state tax on beer from 14 cents a gallon to 30 cents.

Revenue from the levy, which Epstein estimates could raise as much as $50 million annually, would be split evenly between two public college systems, the State University of New York and the City University of New York, at a time when tax dollars aimed at higher education have faltered. In 28 states, tuition provided more revenue than public appropriations for public universities, a 2018 report by the State Higher Education Executive Officer found.

CLICK HERE TO READ MORE ON FOX BUSINESS

“That would go a long way to covering some really critical needs that we have and operating needs that we have at both SUNY and CUNY,” Epstein, a Democrat, told FOX Business.

The bill made a significant stride this week when it received a senate sponsor, Robert Jackson, a Democrat who represents Washington Heights in Manhattan.

At 14 cents a gallon, New York’s beer tax ranks 39th in the U.S., according to the Tax Foundation, an independent group based in Washington, D.C. Tennessee has the highest tax, at $1.29. Epstein said he hoped to bring the beer tax in line with the state’s 0.30-cent wine tax.

TAX CHEATS LESS LIKELY TO FACE AUDIT AMID IRS BUDGET CUTS

Still, it faces an uphill battle to passage. The industry, with more than 430 craft breweries and nearly 20,000 workers statewide, has vowed to fight the tax hike. Over the past five years, New York’s craft-brewing scene has exploded: According to the State Liquor Authority, the state has to 1,153 craft beverage manufacturers, which includes beer and other beverages like wines, liquors and ciders. That's a 68 percent increase from 2014.

“We think it’s a foolish proposal,” Paul Leone, executive director of New York State Brewers Association, said during an interview. “If you raise their taxes 115 percent, there are going to be job losses, and there are going to be breweries that will not be able to expand or grow anymore.”

It’s also unlikely to be endorsed by New York Gov. Andrew Cuomo, who’s previously sponsored state legislation helping to expand the alcohol industry in the state. And in his State of the State address on Wednesday, the Democrat vowed to change the law to allow alcohol sales at movie theaters, in hopes of helping them compete with streaming services.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

“I really am a firm believer in public education, and I think we need it anyways we can expand public education opportunities so people have a pathway to a better life is through higher ed,” Epstein said.