Craft Brewers and Big Oil Make Strange Bedfellows in California

California’s Prop 23, aka the Dirty Energy Proposition, is not doing so well in the polls.

So, instead, the shrewd polluters are backing Proposition 26 — aka the Polluter Protection Act—a ballot measure that may pose an even greater threat because it’s flying under the radar. (There’s a good summary of why Prop 26 “may be even worse” than Prop 23 here.)

As always, following the money behind Prop 26 is very illustrative, as Oil Change International points out. Big Oil and other dirty energy purveyors are, of course, big-time donors, with Chevron topping the list (to the tune of $4 million). Other givers include Shell ($200,000), ConocoPhillips ($525,000), Exxon (amount undisclosed), PG&E — a major electric utility ($603,000), Philip Morris/Altria ($3,350,000) and the California Chamber of Commerce ($3,587,323).

All, so far, par for the course.

What’s more shocking are the smaller businesses on the donor list, including craft brewers such as Lagunitas Brewing Co., Anchor Brewing Co., and Russian River Brewing Co.($5,000, $5,000, and $2,000, respectively)—all companies whose beer I love. Other craft brewers donating to Prop 26 include Stone Brewing Co. ($5,000), Firestone Walker Brewing Co. ($3,000), and Sierra Nevada Brewing Co. ($5,000).

True, their donations are relatively small potatoes. But craft brewers and Big Oil seem like awfully odd bedfellows. So what gives?

Well, just as the Yes on Prop 23 line of attack is that it’s a job-creator, the Yes on Prop 26 line is yet another of conservatives’ favorite whipping posts: lowering taxes.

Vinnie Cilurzo, owner of Russian River Brewing, sounds this very anti-tax theme: “We already pay enough excise tax as it is,” Cilurzo told me via email. “Aside from our regular income tax and sales tax, we pay federal excise tax, state excise tax, CRV [the California Refund Value tax], supplemental fire and police fee (locally), alcohol fee (locally). Last week we got a letter from the state saying we haven’t paid our ‘tourism fee,’ I’ve never even heard of a ‘tourism fee’.”

The whole story about Prop 26 is pretty complicated, as you might imagine, and it doesn’t only concern taxes. But a big part of that story is how corporate polluter interests are using Prop 26 as a stealth attack against California’s environmental laws, and camouflaging that attack with support from small businesses who don’t necessarily agree with their agenda.

Craft breweries are generally quite proud to be a part of the green movement, actually. But they’re also fighting for their lives against excessive fees and taxes, according to Tom McCormick of the California Small Brewers Association. McCormick points to a recent bill proposed by California Assemblyman Jim Beall, Jr. (D-24), AB 1694, claiming it would have raised taxes on the CSBA’s member companies by as much as 500 percent.

So craft brewers naturally believe that Prop 26 would help them. The measure would indeed make it harder for California’s state and local governments to pass new fees to pay for the public costs associated with alcohol consumption. But, conveniently, the way the measure is structured, it would also make it harder to make polluters pay for their own damaging impacts—exactly, of course, what Big Oil operators are counting on. The No On Prop 26 campaign cites the non-partisan Legislative Analyst figures showing that Prop 26 would starve California of $1 billion every year that it can not afford to lose.

Basically, Prop 26 would let major polluters off the hook, while we keep paying for the costs of their dirty business. But craft brewers see Prop 26 as a viable means of ensuring a certain measure of reasonableness in how fees levied against their industry are created. In fact, McCormick seems somewhat surprised by the connection environmentalists are making between Prop 26 and Prop 23 — as surprised as he is to find the craft brewers in league with the likes of Chevron, Exxon, and Shell.

“We felt a little weird being on the same side of the aisle with some of these guys, but we saw it was broad-based, and many other smaller industries are in there as well,” McCormick said of his group’s support for Prop 26. The biggest difference between environmental regulation-evading polluters and his industry? “We’re not totally opposed to tax increases on alcohol, as long as they’re well-written and reasonable.”

“We supported this as a small business who are suffocated by these fees, particularly when used as a tactic by the anti-alcohol lobby. It was not our intent to be aligned with any other interests than those of craft brewers,” says Dave Walker of Firestone Walker Brewing in Paso Robles, CA. He adds: “80% of our beer is brewed and consumed within 90 minutes of our brewery; finding a beer with a better carbon footprint will be hard.”

There is an inherent flaw in a system that drives small entrepreneurs out of business while allowing Chevron to casually toss off $4 million to support an anti-tax measure as a stealth attack against environmental regulations. I certainly don’t want my favorite breweries being taxed to death, and feel for every small business owner struggling to stay afloat. I sympathize with the craft brewers’ position on Prop 26, to a degree. But simply put, there’s a damn good reason why a company like Chevron has ponied up $4 million, and it ain’t because Prop 26 is going to protect small businesses.

Prop 26 would be a disaster for the environment, and should be defeated. There’s got to be a better way to protect small businesses without letting big polluters off the hook at the same time. Check out the No on Prop 26 campaign, and pledge to vote against Prop 26 now.

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