Critics malign Oregon's strong "beer lobby"

Modern Brewery Age, August 18, 2003

Associated Press--As members of a House committee listened closely, wine and beer lobbyist Paul Romain warned that a proposed bill to raise the beer tax would endanger jobs paying $50,000 a year.

Rep. Pat Farr, a Eugene Republican, posed a question: How many people are employed by the beer industry in Oregon?

Romain shifted in his seat during the hearing this past week, and said he didn't have those numbers.

"Sorry for the unforeseen question," said Farr, letting one of Oregon's most powerful lobbyists off the hook.

The question was far from unreasonable: such inquiries are the norm during committee hearings. But the interaction shows how lawmakers' deference for Romain, and the industry he represents, contributes to keeping Oregon's beer tax one of the lowest in the country.

Brewers pay $2.60 in tax per 31-gallon barrel, which is what they've paid since the tax was last raised in 1977.

Romain, 56, is a Portland lawyer and executive director of the Oregon Beer and Wine Distributor Association, which he has represented for 20 years.

His influence is a combination of the personal relationships he's formed with legislators, eloquent arguments about the need to protect Oregon's beer industry and plenty of money in the form of campaign donations.

In 2002, beer, wine and liquor lobbies gave $190,027 to legislative campaigns and $28,686 to the Democratic and Republican parties, said Janice Thompson, executive director of Money in Politics Research Action Project.

The alcohol industry pays its lobbyists well. Between 1997 and 2002, beer, wine and liquor lobbyists were paid over $1.8 million, Thompson said.

A handful of legislators pushing to increase the beer tax say the roadblocks are obvious.

"It's all about politics and money," said Rep. Jackie Dingfelder, D-Portland. "And one of the most powerful lobbyists is Paul Romain."

Romain, who has curly gray hair, a boyish smile and a friendly personality, says contributions have nothing to do with his success.

"That's such a crock," Romain said, responding to a question about money's influence. "I've never asked anybody to give me a vote based on a contribution."

Instead, Romain says legislators are convinced the brewers need low taxes. Brewers say their industry has boomed in Oregon since the 1970s, creating thousands of jobs, because the taxes haven't gone up.

Raising them, the argument goes, would force Oregon brewers to cut jobs to compete with national beer companies that can more easily absorb the higher taxes. "Oregon's a producer state," Romain said. "They can't get through an increase that won't hurt the locals."

Given the state's budget crisis, many legislators, along with Gov. Ted Kulongoski, have called for increases on both the beer and wine taxes this session. Over the past seven months, a half-dozen proposals have been whittled down to a beer tax increase of about 2 cents per 12-ounce bottle.

This bill would raise about $24 million over the next two years, exempting small brewers that produce fewer than 5,000 barrels a month.

Originally, the beer increase was part of a $500 million House package of revenue-raising measures, but during the past week the beer tax was culled from the package and made into a separate bill. The change dims the bill's chances in the Republican-controlled House, where all revenue raising measures must begin.

Even if an increase is passed by the Legislature, Romain has said the beer industry will collect signatures to refer it to voters. The industry would need to collect 50,420 signatures, putting it on the November 2004 ballot.

Polls are split on how Oregonians would vote on an increase. The last time a beer tax referendum was attempted--in 1988 for a 1 cent per bottle increase--over 60 percent of voters rejected it.