More states have floated legislative proposals to use alcohol excise taxes to fund substance abuse treatment and prevention programs, but the plans face significant opposition from the alcohol industry and lawmakers reluctant to raise taxes.
Ten states currently dedicate some portion of excise-tax revenues to fund alcohol treatment programs, according to Ensuring Solutions to Alcohol Problems, a George Washington University think tank that tracks alcohol-tax issues. Oklahoma, Missouri, Massachusetts and Oregon are among the states that have recently debated similar proposals.
By increasing alcohol taxes, states can significantly reduce alcohol consumption and its associated negative consequences, particularly among underage and underprivileged populations, according to Assessing State Readiness to Act on Alcohol Tax Research Findings (PDF), a report by the Substance Abuse Policy Research Program (SAPRP) of the Robert Wood Johnson Foundation.
“The price of alcohol matters, especially with teenagers,” said Dr. Richard A. Yoast, Director of the AMA Office of Alcohol and Other Drug Abuse. “Higher alcohol prices are proven to reduce everything from violent crimes to rape.”
States facing financial pressures may be more receptive to tax increases to help reduce deficits, and “most state budgets coming out of this recession severely weakened,” says the SAPRP report.
So far, however, the obstacles to raising alcohol taxes have largely trumped public-health arguments. For example, despite the prominent political and economic role played in the state by St. Louis based brewer Anheuser-Busch, Missouri poll respondents have shown support for a two-cent-per-drink increase on excise alcohol taxes. A proposed Missouri excise-tax increase would generate an estimated $44 million per year, which could help offset the $10.9-million 2006 budget reduction facing the state Division of Alcohol and Drug Abuse and the corresponding loss of over $33 million in federal funds over the next three years, supporters say. Without a revenue increase, state addiction-service providers fear many existing treatment programs will suffer or be eliminated altogether.
But Missouri Representative Bill Deeken's proposal to apply excise-tax proceeds towards treatment, prevention, and enforcement faces anti-tax opposition from lawmakers, and remains stalled in the state legislature. Despite the budget difficulties and public support, Missouri House Speaker Ron Jetton said the bill has little chance of passage, and he has not referred the measure to any legislative committee.
Oklahoma state representative Darrell Gilbert (D-Tulsa), frustrated over lack of progress for his plan to double the current state excise tax on beer and alcohol to raise $70 million a year in funds for substance abuse treatment and prevention, is proposing a constitutional amendment so that the issue can go to a popular vote.
“During [a] debate on increasing the cigarette tax, I got a lot of questions from my constituents asking why we weren't trying to do the same with beer and alcohol and taxes,” Gilbert said. “It was their opinion that beer and alcohol bring more trouble to people's lives than cigarettes do.”
Massachusetts State Senator Marian Walsh (D-West Roxbury) has also proposed an increase on excise alcohol tax, which she said could generate up to $58 million every year to fund treatment and prevention programs while adding one cent to the cost of a glass of wine and two cents to a bottle of beer or shot of liquor.
But lobbyists for the alcohol industry have dampened the reception for Walsh's bill, which failed in 2001 and 2003. The Distilled Spirits Council of the U.S. argued that the increased tax would unfairly impact the 90 percent of consumers who drink responsibly.
The same arguments from the alcohol industry have daunted a similar bill in Oregon that proposes to raise beer taxes by up to 10 cents a bottle to generate $150 million a year for treatment and prevention of addiction.
Co-sponsors Representative Jackie Dingfelder (D- Portland) and Senator Bill Morrissette (D-Springfield) termed the legislation “an attempt to collect a long-past-due bill from the beer industry.” But House Speaker Karen Minnis has indicated that Oregon Republicans have no interest in introducing new taxes.
While anti-tax sentiments abound, alcohol taxes remain generally popular among voters nationwide, especially if increased revenue is earmarked for treatment and prevention. A 2004 American Medical Association (AMA) poll of 800 voters showed that two-thirds of Americans favor a state tax increase on alcohol to fund prevention programs.