Legislative recap: Brewing industry left pleased with results of this session

May this be the last time we have to use this file photo in 2023.

There was a big sigh of relief last weekend when the 2023 New Mexico state legislative session came to a close. It was not just from the media covering it, or the legislators and lobbyists who participated in it, but from numerous business groups around the state, including the New Mexico Brewers Guild.

I caught up with Tractor Brewing co-owner Skye Devore, who has long been the Guild’s point person in Santa Fe, and Guild executive director Ebbie Edmonston in a Zoom chat on Thursday morning to go over all of it.

To quickly sum it up, the results of the session were far more positive than negative for breweries, wineries, and distilleries statewide.

“All of the proposed excise tax increases were all rolled into the omnibus tax bill, House Bill 547,” Devore said. “So what that bill ended up doing was creating the Alcohol Harms Alleviation Fund. One of the important things that it did was have 100 percent of the excise tax reallocated for treatment and prevention programs for alcohol abuse. We’re very pleased with that.”

Rather than facing a hefty 25-cent-per-pint increase in the excise tax, as some legislators proposed as a means of basically pricing out some people from wanting to drink alcohol, local craft creators will not face any increase.

“A lot of different numbers were thrown about,” Devore said. “What ended up happening was a 20-percent increase, except small producers retained their existing tax structure, which includes all New Mexico brewers, wine growers, and distillers. There will be no increases this year for small producers.”

Though the Guild and its wine and distilling counterparts certainly advocated against an overly high tax increase, it still came as somewhat of a surprise that they will not face anything.

“I think it’s really great,” Devore said. “An exemption was not something that we asked for, but legislative sponsors and those who have breweries, distilleries and wineries in their districts took it upon themselves to write that into the bill. That was really good news for our industry.”

A last-minute effort to reallocate 50 percent of those new tax revenues into the general fund was shot down, so all of it will go to alcohol treatment programs, and it will not have a direct impact on locally owned breweries and the like that are still recovering from the economic downturn caused by the 2020-21 pandemic lockdown and its after effects.

Devore did note that Governor Michelle Lujan Grisham has not signed the tax bill into law just yet. She has until April 7.

“I have already heard that there will be another bill introduced next year that will increase the 20 percent and include small producers,” Devore added. “There will be a lot of work for the industry to do in the interim. By the time the next legislative session starts, the 20 percent won’t even have started. It starts January 1, 2024. We’ll have to be really mindful of that and make sure that’s watched.”

Ah, yes, the work is never really done. For Edmonston, who had primarily joined us for this interview so she could also catch up on the results of the session, it was her first direct experience with New Mexico politics mere months into her time in the role of executive director.

“I was just learning this year,” she said. “All I can say is I tried to listen to you guys as best I could. It was a tough year to have a 60-day session as the first session I have. I do not look forward to it next year, but I do know what to do. That was intimidating as hell.”

We can only imagine what it is like to be thrown into the deep end like that, so to speak, and we have been following past legislative sessions since about 2013 or so.

Back to the session, there were two alcohol delivery-related bills that were presented. HB 343 was the preferred bill of breweries like Rowley Farmhouse Ales and Beer Creek, but alas, it stalled in committee and never reached the House floor.

As for HB 364, it did end up passing both the House (58 to 10) and Senate (29 to 7) and now awaits the governor’s signature.

“So what it does is it changes some of the restrictions that were put on the initial delivery bill, basically making it easier to deliver, especially in Class A counties,” Devore said. “There were a lot of restrictions in the original bill. Some of those restrictions made it so no one was taking advantage of delivery. These changes really maintain a level of responsibility that we wanted.”

It also includes a means to keep macro breweries like Anheuser Busch InBev from putting their products at the top of the queue.

“There was a provision written in there where multinational corporations can’t pay to be listed higher with big stores like Total Wine,” Devore said. “There can’t be sponsored posts from big breweries.”

Besides HB 343, there were a few other bills that did not pass which could have had an impact on breweries, though opinions were mixed on whether or not those would have been good or bad or somewhere in between.

“There was SB 11, paid family medical leave, we couldn’t come to a consensus (as an industry),” Devore said. “I know my brewery was supportive, while the rest might not have been. We as an industry did not take a stance. Same thing with some of the additional minimum wage bills. There were a lot of general business legislation that could have affected us, but did not pass.”

Overall, it was an interesting vibe in Santa Fe this year. Even with the state purportedly awash in funds thanks largely to the oil and gas industry, things were rather contentious at times in both the House and Senate. Devore said she was not particularly surprised by this environment.

“Going into the session we weren’t super sure what to expect,” she said. “Not just because of money, but because of the change of leadership in the House and Senate. It all changed. That led us to being uncertain as to what was happening.

“We were certainly expect every time that there will be people who want to change things, change our industry, even when levying taxes to change consumer behavior is generally bad policy. I think what’s hard for us is being local and homegrown, and working hard to have these relationships, and then being painted as not good people. We know these legislators, (but) you don’t want to have to play on those relationships.”

If anything, the budgetary surplus emboldened some legislators and advocacy groups to aim higher than they might have if the state was lacking in extra funds.

“I think things get heated when there’s lots of money available,” Devore said. “We can give a little (in excise taxes) when there’s not. There was one year when the state faced a deficit, so 20 percent went to the lottery scholarship. Our thought is when the state doesn’t have any money, let’s help. When there’s lots of money, things get contentious.

“There’s the question of where the money is coming from, and balancing that out for legislators and the state. A lot of politics occur when there’s excess money.”

While the 2023 session is in the rear view mirror, the work has already begun in advance of the shorter 2024 session.

“Next session being a 30-day session, every bill has to be germane to the budget or get a message (of sponsorship) from the governor,” Devore said. “If we wanted to get something changed, we would have to get the governor to send a message. Otherwise it has to be budgetary (related).”

Before we wrapped up, Devore made sure to thank everyone in the brewing industry who got involved this session.

“I’m so happy of our industry and our board (of directors) and Ebbie for showing up, being dedicated, and taking direction on what to say and who to email,” she said. “Big kudos to the board and Ebbie, and also Alana (Harris) and Jess Griego who are not on the board anymore, but who are always there and being heard.”

Devore also wanted to thank one particular group of legislators.

“If we want to send out shout-outs, definitely the whole tax committee for me, who chose to leave our industry (out), they should get a thank you card from their beer constituents,” she said.

A big thanks to Skye and Ebbie and everyone else from all of us beer drinkers, too.

Keep supporting local!

— Stoutmeister

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