Jul 31, 2009 7:00 pm US/Eastern
25 Percent 'Sin Tax' Set To Hit N.J. Liquor Stores
Many Lawmakers Tuck Tail And Run On Eve Of Hike, But Corzine Defends Increase, Blames State's Budget Problems
NEW BRUNSWICK, N.J. (CBS) ―
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If you want to buy hard liquor and wine in New Jersey, you are going to have to reach a little deeper into your pocket starting Aug. 1 due to the state's increased "sin tax."
Justin Sullivan/Getty Images
Buying booze in New Jersey is about to get a little more expensive -- and it's all because of the state's budget problems. An increased tax will cost residents every time they raise their glass.
Mike Chedid spent Friday re-pricing his inventory of hard liquor and wine -- the fallout from New Jersey's new so-called "sin tax" that'll hit liquor stores, restaurants and bars starting Saturday.
"It's not going to help. A lot of people are trading down, cheaper brands, smaller sizes," Chedid said.
Among customers, there was both anger and understanding.
"I think it's going to be fine. They gotta get the tax from somewhere," Ose Medera said.
"This is just passing on a couple things to people, certain people, and I don't think it should happen," another New Jerseyan said.
But New Jersey's Legislature felt it had no choice given the state's economy and budget deficit.
When CBS 2 HD initially did the story this spring on the eve of the vote, state lawmakers didn't want to talk about it because, obviously, they didn't want their name associated with a tax increase. Now on the eve of this tax increase, you guessed it, lawmakers were tough to find.
"I think you're talking about $50 maybe a year for a heavy drinker," Gov. Jon Corzine said.
But Corzine didn't hide and on Friday defended the tax increase.
"There are no good options when you have revenues fall $4.5 billion, which is exactly what happened," Corzine said.
The 25 percent increase would bring in an additional $1.10 per gallon of hard liquor and 17 cents per gallon of wine for an expected $22 million windfall annually to state coffers.
Restaurants and bars have little choice but to comply.
"We try not to pass it on to consumers, but hopefully we have to do what we have to do to stay in business," restaurant manager Mike Citarella said.
In real terms, the increase means about an extra penny per glass of wine -- a little more for a mixed drink.
"It's certainly not going to deter me from going out. I might kind of cut back on the amount of drinks I buy," Leonia resident Alex Rosenthal said.
Beer is not seeing a tax increase. Corzine said that's because there are already water taxes and other revenue enhancers attached to this kind of alcohol.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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