Governor Corzine has called for a tax on liquor and wine in his FY 2010 budget, but not beer. Why is that? Well some would say the populist backlash – much like we are now seeing against executive compensation bonuses at AIG – would shut down the plan before it left the gate. Maybe. But a source tells me there is a backstory.
According to this individual, a couple of years ago Corzine was considering a beer tax to raise revenue. Auggie Busch himself got on a plane, flew to the State House and met with the Governor face to face. in that conversation Busch allegedly told the Governor that if he taxes beer in New Jersey, the Budweiser plant in Newark would be immediately shuttered, and all 6000 jobs lost. He then supposedly wished Corzine luck, and got back on his plane and left.
Not sure how true this is, but i think we get the idea. That plant is an institution in Newark. First opened in 1950, it is a relic of Newark’s rich beer making past. Many of the breweries first came to Newark because of the purity of the water for beermaking. Most have since moved on. We’ll see what happens to the Newark plant now that InBev, the European company has purchased Anheiser Busch for $52 million. Word is those jobs are protected for at least another 4 years.
Anyway, the Governor is looking at a 25-30% tax increase on liquor sales. The state currently raises $110 million annually with its excise tax. People actually drive to NJ to purchase booze because its cheaper, according to industry insiders. A new tax of $4.40 per gallon is counter-intuitive they say, because those sales will dry up.