Throughout the 63rd legislative session, members of both parties have touted their efforts to create jobs and strengthen Montana’s economy. Whether it is reducing tax burdens on small business or making new investments in education, there is good news coming out of the legislature.
But occasionally ideas emerge that are contrary to the goal of economic development. Case in point is the recent legislative attempt to stifle Montana’s flourishing brewery industry. A bill has been introduced that would impose an additional $100,000 tax on all existing breweries and cap the creation of new breweries. The obvious aim of this bill is to shut down existing breweries and prevent future expansion.
To appreciate how strange this legislation is, you must understand the history of Montana’s brewing industry and the extremely restrictive rules under which it operates. In 1999, the legislature permitted breweries to operate under some of the most restrictive regulations in the country. These rules require that breweries serve no person more than 48 ounces of beer, close their doors at 8 p.m., and sell only beers they create on their premises. Unlike most bars and casinos, breweries are prohibited from serving liquor or allowing gambling.
Given these tight regulations and the high cost of brewing equipment, which can exceed $500,000, the breweries initially limped along. In recent years, however, breweries around Montana have miraculously innovated, despite the confines of the law, to create thriving small businesses with unique ambiances and high quality beers which are sold on site and distributed to stores and bars.
Thirty-eight breweries now exist in Montana and many more would like to open. Beer manufacturers have created over 450 jobs and generated more than $50 million in Montana-made products. Breweries utilize wheat and barley from Montana farmers and create value-added products which are sold locally. This is precisely the model of manufacturing our state needs to follow in order to expand its economy.
Many bar owners appreciate the opportunity to serve Montana-made brews their patrons enjoy. However, other bar owners feel threatened by the success of these taprooms. For these owners, several lobbyists have been hired in Helena to try to effectively write breweries out of the law and tax them out of existence with a new $100,000 fee.
When the brewers purchased their equipment and invested in their buildings, they had no way of knowing that that the legislature would attempt to arbitrarily saddle them with a $100,000 tax. The threat of this legislation has already delayed the opening of a brewery in downtown Great Falls and will prevent the opening of many more across the state.
We understand that some tavern owners invested heavily in their licenses and are unsure how their business may fit in with local breweries. However, the solution is not to use governmental regulation to destroy the breweries. As an alternative, we have proposed a study resolution which aims to equitably resolve the concerns of the tavern owners while creating a clear path forward for Montana’s brewing industry.
Both Democrats and Republicans value the new and thriving craft beer industry. As we seek to find ways to expand Montana’s economy, add value to our agriculture products, and grow local jobs, we prefer to nurture this burgeoning industry in our state – not burden it with more licensing and regulation.
Rep. Christy Clark (R), Choteau
Sen. Anders Blewett (D), Great Falls