Alcohol tax increase attempt – 2002

January 27, 2002 | Oregonian

Paul Romain sits in his 19th-floor office looking out on Portland’s West Hills, but his gaze is fixed 50 miles south.

That’s where Gov. John Kitzhaber has just announced he wants to increase beer and wine taxes by about a nickel a drink to help fill an $830 million budget shortfall.

Outwardly, Romain is as unperturbed as his curly gray hair. But he already is putting his two decades of Capitol savvy and skill to work on a plan of attack. He is getting ready to win again.

Romain has been the Oregon beer and wine industry’s lead lobbyist for 18 years. During that time, state taxes on the two libations have not increased, although lawmakers have tried again and again.

Now Kitzhaber is taking fresh aim at his clients. The game is on. And the 54-year-old lawyer plays it with as much expertise, and relish, as almost anyone.

History is proof of that.

Take 1993. Lawmakers were struggling to plug about a billion-dollar shortfall in the state’s $6 billion budget.

Two of the state’s most powerful politicians — Gov. Barbara Roberts, a Democrat, and House Speaker Larry Campbell, a Republican — were backing an increase in beer and wine taxes. That kind of clout usually is enough to get a bill to the floor for a vote. But the proposal never made it that far, dying in a House committee.

“He knows where to put the pressure,” Roberts says of Romain. “He knows the system inside and out, every member, every nuance, every committee, every committee structure. . . . He’s very good at it, and he’s had a lot of practice.”

Romain looks back on the 1993 proposal the way an old athlete remembers a championship game. He smiles.

“That was a fun fight,” he says, his eyes twinkling mischievously.

Drinks and conversation

After a full day doing the people’s work in the Capitol, about 18 Oregon legislators from both parties arrive at the KOIN Tower in downtown Portland. They ride up to lobbyist John DiLorenzo’s $610,000 condominium on the 30th floor, where DiLorenzo, Romain and other lobbyists treat them to a wine-tasting.

While the lawmakers sip about $800 worth of French and Italian vintages poured by two men from a wine distributor, the lobbyists savor what to them is a taste of heaven: Hours alone with a group of lawmakers, able to talk uninterrupted in a comfortable, secluded place.

Without access, lobbyists can’t do their jobs. They need to tell lawmakers what issues are important to their clients, answer questions and put the heat on when matters become urgent.

A lobbyist’s stock in trade is talking, and Romain puts his whole body into it. Whether he’s in the Capitol hallways or in private conversations, he drops his hands quickly to his sides to show he’s exasperated with someone’s position, snaps his fingers to illustrate how quickly something happened, and jabs and moves his hands to punctuate a point or story.

This event on a spring evening during the 2001 legislative session is just one of many ways the beer and wine distributors gain access. They throw a party at the start of each legislative session. They also contribute generously to Oregon politicians — a total of $312,452 in the 1998 and 2000 elections.

Romain is at home in all corners of the room. Politically, he can talk both major parties’ language — once a Democrat, he switched to Republican years ago. Professionally, his legal and lobbying clients have ranged from Godfathers Pizza to auto dealers to pawnbrokers. Personally, his involvement in Jewish affairs has expanded his access to politicians; he escorts lawmakers on trips to Israel paid for by the American Jewish Committee’s Project Interchange, which he heads.

He also takes legislators and their wives to beer and wine conventions in Hawaii and other places. That led to a state ethics commission inquiry in 2000 into whether Romain illegally paid for the wives’ trips, but a judge cleared him.

Romain knows lobbying is a team sport. A key to his winning streak on tax-increase proposals is his ability to work with other powerful groups such as the Oregon Restaurant Association and the Oregon Grocery Industry Association.

His co-hosts for the wine-tasting are lobbyists for Portland General Electric and Georgia-Pacific, plus DiLorenzo, who is as close to Republican legislative leaders as any lobbyist.

Between sips of white Burgundy and red Bordeaux, Romain chats with lawmakers. He doesn’t forget to talk to them about his other clients, including MCI WorldCom, the Oregon Greyhound Association and the Oregon Petroleum Marketers Association.

After all, he says later, “they’re a captive audience for a period of time.”

Between that and the fine wine, he says, the event “turned out to be 12 times better than I hoped it would be. People loved it.”

Playing for keeps

Romain used to play golf and tennis, and although back and knee surgeries have put those sports in his past, he maintains his competitive drive.

Lobbying, to him, is “like a sports event,” and he approaches it that way: practice, preparation, teamwork, execution, relentlessness.

“I try to anticipate where the thing is going and get there before other people can get there,” Romain says. He takes pride in his ability to put complicated concepts in simple, understandable terms. “I’m a good translator,” he says.

Romain, who grew up in Los Angeles and attended law school in Berkeley, plunged into Oregon politics shortly after moving here in 1973, getting a job with the Legislative Counsel office.

He ran Jim Redden’s campaign for attorney general in 1976. After Redden won, Romain went to work in the attorney general’s office, where his duties included Oregon Liquor Control Commission issues. He left the attorney general’s office in 1978 for a private practice emphasizing liquor law.

He started doing some lobbying the following year, then immersed himself in it in 1983 when the beer and wine distributors hired him as executive director and lobbyist with the understanding he could have other clients, too. That same year, he married his second wife, Gayle, a member of Portland’s influential Schnitzer family.

Romain, who receives more than $100,000 in reportable income from his lobbying clients in a legislative year, and his wife live in a five-bedroom home in the West Hills.

The beer and wine industry has grown in influence during the past decade as it has grown in size. The state now has nearly 200 wineries and 68 breweries, and it’s among the few states that grows hops for beer-making.

Taking the job has put Romain in partnership with the rest of the industry’s formidable team in Salem, which includes longtime lobbyists such as Mark Nelson for Anheuser-Busch, Gary Conkling for the Oregon Winegrowers Association, and John Powell for Miller Brewing.

That lineup gives the industry a huge advantage, Roberts says, particularly since term limits have left the Legislature with fewer experienced members.

“If you were putting a medical team together to save your life in an open-heart surgery, do you want the guys who’ve got 60 years experience or do you want the guys who have eight?” Roberts asks. “It’s a very delicate balancing operation, and they have all the checkers.”

Forming a strategy

By Thursday, the day after Kitzhaber’s announcement last week, Romain has identified what he sees as a big problem with the governor’s plan, which would increase state revenue by about $44 million.

Romain has poked holes in tax-increase proposals before. So-called sin taxes are a popular place to turn to when government budgets need help. Oregon almost doubled its cigarette tax in 1997, for instance.

At first glance, the state’s beer tax — about the fifth-lowest in the nation and one-third of the national average — looks like a ripe target. At 8 cents a gallon, it has remained unchanged since 1977. That’s less than a penny for a 12-ounce beer.

The wine tax, which at 67 cents a gallon ranks in the middle among states, hasn’t increased since 1983.

The hole Romain has found? Fairness.

Microbreweries account for 10 percent of the beer consumed in Oregon, the highest percentage in the nation. Kitzhaber’s proposal to increase the beer tax sixfold would exempt breweries that produce less than 3.1 million gallons — which Romain says means every microbrewery except the state’s two largest, Deschutes and Widmer.

“I think we’ll call it the Kurt Widmer Tax,” Romain says with a smile.

He adds it to his stockpile of ammunition. He has enough to make a prediction about Kitzhaber’s plan. It’s what he’s said — accurately — about similar proposals for 18 years.

“I still think it’s dead,” Romain says.

May 26, 1993 | Oregonian

Proposals to boost the tax on beer and wine haven’t gone far in the state Legislature this year, but Rep. Gail Shibley has come up with a concoction she thinks has appeal:

A nickel-a-drink tax on fortified beer and wine with the money to go for drug-free housing for people overcoming alcohol and drug addictions.

“Those most in need of the services will be the ones paying the tax,” Shibley, a Portland Democrat, said Tuesday at a news conference on House Bill 3651.

That’s because many or most of those who buy malt beverages and wine with heavy-duty alcohol content are people looking for a fast alcoholic high to feed a growing or established addiction, said Shibley and others who joined her.

The tax, which would amount to five cents a drink, would apply to malt beverages with more than 4 percent alcohol content, and fortified wines of 14 percent to 21 percent. The law could raise nearly $2.5 million in the next budget cycle.