ORONO
– Maine’s new beverage taxes, at the heart of Question 1 on this
November’s ballot, will cost Maine businesses and households as much as
$40.7 million annually in higher taxes on beer, wine and nonalcoholic
beverages, according to new research by University of Maine economist
Todd Gabe.
These taxes, imposed by Public Law 629, also would
result in the reduction of $17.5 million in beer, wine and soft drink
net sales revenue. Including multiplier effects, the total economic
impacts are an estimated reduction in sales revenue of $26.3 million
statewide, with a loss of 395 full- and part-time jobs that provide
about $8.8 million in income, according to Gabe.
"These total impacts are spread across the entire Maine
economy, but concentrated in restaurants and bars, retail stores and
other companies that sell and distribute beverages," he says.
"Many people might be tempted to combine the $40.7
million in additional taxes and the $26.3 million in reduced sales
revenue into a single impact figure. But that would be comparing apples
and oranges," Gabe said. "They are different types of impacts, but the
bottom line is an increase in the price of beverages and a loss of
sales revenue to the beverage industry."
Gabe’s study on the fiscal and economic impacts of the
beverage tax was commissioned by "Fed Up With Taxes," a coalition of
businesses and individuals, and several associations representing
stakeholders.
The report does not take a position on Question 1, Gabe
says. "It simply estimates the effects of the new law on beverage
taxes, as well as the economic impacts of the statewide reduction in
beverage sales revenues associated with the tax hike," he says. "Other
aspects of the law need to be considered to make a judgment about
whether Public Law 629 is ‘good’ or ‘bad’ for Maine."
The intent of the study is to inform the debate on Question 1 – the repeal question – on the upcoming ballot, Gabe says.
"This kind of information is important for voters to
consider," he says. "It’s a lengthy report, but the majority of it is
about how the numbers were generated."
Gabe can be reached for comment at (207) 581-3307.