Senators deal with alcohol taxes, child welfare payments


March 15th, 2012

Lincoln, NE – The Legislature moved Thursday to head off higher taxes on certain alcoholic beverages, despite concerns that they appeal to underage drinkers. And lawmakers took the first step toward paying some social service agencies that lost money in the controversial privatization of child welfare.

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The drinks in question are so-called flavored malt beverages – things like Mike’s Hard Lemonade, Bacardi Breezers, or Smirnoff Ice. And the question is whether they should be taxed like beer, at 31 cents a gallon, or hard liquor, at $3.75 a gallon.

Sen. Mike Gloor said taxing flavored alcohol to deter teens from drinking is a misguided approach. (Photo courtesy Nebraska Legislature)

Grand Island Sen. Mike Gloor said that approach was misdirected. “There are ways to flavor alcohol to make it more palatable to the youth palate. But they’re not drinking it for the flavor. They’re drinking it for the alcohol in those spirits,” Gloor said. “To try and reduce that amount of drinking for alcohol by focusing on a very, very small subset of the alcohol that’s available – an alcohol product that’s drunk legally, by thousands of Nebraskans, probably, to me is an overreach,” he said.

Lawmakers gave the bill first-round approval on a vote of 27-7. If the bill gets two more favorable votes and is signed by the governor, that would mean the lower tax rate would remain in effect.

On child welfare, lawmakers again took up the issue of whether the state should pay subcontractors who were not reimbursed before lead agency Boy’s and Girl’s Home ended its contract with the state in 2010. Most of the agencies were located outside the Lincoln and Omaha areas, and senators representing those districts said they needed to be paid in order to stay in business.

Sen. Steve Lathrop warned the state is "decimating" its child welfare provider infrastructure. (Photo courtesy Nebraska Legislature)

Omaha Sen. Steve Lathrop warned of what would happen if they were not paid. “We are decimating our provider infrastructure. We are doing it in the developmental disability area and we are doing it in the child welfare area,” Lathrop said. “These people, when they get done with their experience with Nebraska, they’re going to go wait tables or do something else because we don’t live up to our agreements. We are a bad person to count on to provide services to.”

Omaha Sen. John Nelson said the state has already paid the lead contractor, Boy’s And Girl’s home, and by paying its subcontractors, would in effect be paying twice. And he warned that the state could be sued for wasting money. “I hate to tell you in my opinion that if we do something wrong here, we might wind up paying a third time,” Nelson said.

Lawmakers voted 29-2 for an amendment to pay the $2.5 million. They then gave the bill first-round approval.

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