FISCAL NOTE
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund,Special Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to increase the barrel tax on nonintoxicating beer; and to require the increased moneys from this tax to be expended on alcohol and drug abuse programs.
As written, this bill would increase the barrel tax on nonintoxicating beer from $5.50 per barrel to $11.00 per barrel. Also, the bill calls for the “increased tax” to be paid to the Director of Mental Health to be expended on programs within the Division of Alcoholism and Drug Abuse. If the intent of the bill is to provide funding for alcohol and drug abuse programs from the net gain in revenue from the tax rate increase, the passage of this bill would result in a gain of roughly $7 million in FY2011 and approximately $7.6 million per year thereafter to be expended on those programs. There would be a slight decrease in General Revenue Fund collections due to a decline in consumption from the increased tax rate.
However, if the intent of the bill is to expend all Beer Barrel Tax revenue on alcohol and drug abuse programs, there would be a loss of roughly $7.8 million per year to the General Revenue Fund and a gain of about $14.1 million in FY2011 and $15.4 million per year thereafter for the Director of Mental Health.
Additional administrative costs to the State Tax Department would be minimal.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2010
Increase/Decrease
(use"-") |
2011
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
As written, this bill would increase the barrel tax on nonintoxicating beer from $5.50 per barrel to $11.00 per barrel. Also, the bill calls for the “increased tax” to be paid to the Director of Mental Health to be expended on programs within the Division of Alcoholism and Drug Abuse. If the intent of the bill is to provide funding for alcohol and drug abuse programs from the net gain in revenue from the tax rate increase, the passage of this bill would result in a gain of roughly $7 million in FY2011 and approximately $7.6 million per year thereafter to be expended on those programs. There would be a slight decrease in General Revenue Fund collections due to a decline in consumption from the increased tax rate.
However, if the intent of the bill is to expend all Beer Barrel Tax revenue on alcohol and drug abuse programs, there would be a loss of roughly $7.8 million per year to the General Revenue Fund and a gain of about $14.1 million in FY2011 and $15.4 million per year thereafter for the Director of Mental Health.
Additional administrative costs to the State Tax Department would be minimal.
Memorandum
The stated purpose of this bill is to increase the barrel tax on nonintoxicating beer; and to require the increased moneys from this tax to be expended on alcohol and drug abuse programs.
This bill proposes to increase the tax rate in W.Va. Code §11-16-13 from $5.50 per barrel to $11 per barrel. The “increased tax” is to be paid to the Director of Mental Health to be expended on programs within the Division of Alcoholism and Drug Abuse. However, it is unclear whether the bill intends for the revenue collected above the current $5.50 to be expended on those programs, or the revenue from the entire proposed $11 per barrel tax.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov