The state wholesale tax on beer, wine and liquor should be raised to provide local governments with money needed to pay for law enforcement, jails and other programs where costs have skyrocketed due to alcohol abuse, a legislative committee was told Monday.
The proposal is intended to raise the tax by a dime a drink. The tax would provide $35 million to help cities and counties deal with rising law enforcement budgets, according to county officials and others.
Alcohol is involved in many crimes, so those who drink should pay a tax to help cover the cost of the criminal justice system, county officials said. The counties' ability to increase property taxes is limited, so they are having trouble paying for programs related to alcohol abuse, they said.
"There's a crisis brewing," Minnehaha County administrative assistant Ken McFarland said.
But lobbyists for beer and liquor distributors and wholesalers said the proposal would triple the average tax on alcoholic beverages. That would put an unfair tax burden on people who drink responsibly, and it also would hurt South Dakota businesses by driving customers to other states to buy beer, wine and liquor, they said.
The proposal would give South Dakota the highest tax on beer in the nation, said Bob Riter of Pierre, representing the Beer Wholesalers of South Dakota.
"This would put the South Dakota merchant at a terrible disadvantage," Riter said.
The Senate State Affairs Committee heard more than an hour of testimony on the tax proposal Monday. A vote on the bill was delayed until at least Wednesday.
SB61 would impose an extra tax of $1.06 on a gallon of beer, $2.56 on a gallon of wine and $8.54 on a gallon of liquor. Officials estimates it would provide about $35 million a year.
Counties would get 62 percent of the money, while cities would get 15 percent. The rest of the new revenue would go to programs that combat drunken driving and domestic violence, the teen court program and organizations that provide legal services to poor people.
Similar measures that have sought a nickel-a-drink tax have failed in recent legislative sessions. Some county commissioners have said if the Legislature will not approve a drink tax to help with law enforcement costs, they may start a petition drive to put such a measure on the ballot for a statewide public vote.
Dick Tieszen, a Pierre lawyer representing the South Dakota Sheriffs Association, said much of the work done by sheriffs' departments is related to crimes and other problems caused by alcohol.
Attorney General Larry Long also testified in support of the bill, saying it would provide money needed for a program that keeps habitual drunken drivers out of jail by placing them under intensive supervision.
But Jeremiah M. Murphy of Rapid City, representing Republic National Distributing Co., said the tax would unfairly hit people who drink responsibly and never wind up in legal trouble.
The proposed tax increase would cause many South Dakotans to buy beer, wine or liquor in bordering states, Murphy said.


