Alcohol tax increases die on the vine in California’s Capitol

California’s excise taxes on wine, beer and liquor remain a 1991 vintage, the last year the state hiked the price that producers pay on each gallon of alcohol. With California facing an ongoing fiscal crisis, lawmakers and Gov. Arnold Schwarzenegger have proposed using higher alcohol taxes to help balance the budget in recent years. More than four out of five voters supported a Schwarzenegger plan to charge an extra nickel a drink, one poll found.

But such taxes have gone nowhere in the Legislature.

Senate Democrats last month proposed an increase tied to the inflation rate since 1991 – adding less than half a cent to a glass of wine. That plan appears to be near death.

The annual rejection of new alcohol taxes and fees is a reflection of the industry’s political power, say tax-hike proponents. Major beverage manufacturers and wine growers spend millions to lobby the Capitol each year and sprinkle campaign contributions to members of both parties.

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