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California cocktail tax would spike end-of-session mix

Video: Sacramentans react to proposed cocktail tax

The Cocktails for Healthy Outcomes Act would add a 5 cent tax to raise monies for services for the disabled. But is it fair?
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The Cocktails for Healthy Outcomes Act would add a 5 cent tax to raise monies for services for the disabled. But is it fair?

A California lawmaker is blending a five-cent-a-drink tax on cocktails into the hectic end-of-session legislative push.

Angered by a budget deal they see as cutting out disabled Californians, advocates have been pushing lawmakers to better fund services. Assemblywoman Susan Bonilla, D-Concord, is hoping the extra revenue can pour into state coffers from martini, margarita and Manhattan glasses.

“I’ve been aware for a while now that compared to other states our alcohol taxes are abysmally low,” Bonilla said, arguing that cocktails are optional luxury items. “I was really looking for a way to fund disabilities services that wouldn’t involve a regressive tax.”

The nickel-a-drink levy would be placed on any drink containing distilled spirits sold at bars and restaurants. Tax on beer and wine would remain the same. California has one the nation’s lowest taxes on beer, wine and distilled spirits, and the Legislature has not raised booze levies since 1991. Before 1991, California had not raised its taxes on wine and beer since the 1950s, nor on distilled spirits since 1967. Wholesalers pay the tax, and it is presumed that retailers roll the cost into the price of a drink.

Bonilla has submitted her Assembly Bill x2-18 under a special legislative session devoted to healthcare funding, pursuing the same tactic as lawmakers who have revived previously defeated attempts to regulate electronic cigarettes and allow dying Californians to end their lives.

Any bill imposing a new tax requires a two-thirds vote and thus long-shot Republican support. The minority party has already roundly rejected new taxes and fees to fund transportation infrastructure and other healthcare needs, but Bonilla said her legislation will serve in part to ensure the disabled aren’t left out of the discussion.

“I think most people in California don’t realize there’s a crisis,” Bonilla said, but amid the debate about boosting Medi-Cal reimbursement rates or taxing managed healthcare plans, “no one has really focused on the fact that we have a statutory obligation to fund these services.”

Jeremy B. White: 916-326-5543, @CapitolAlert

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