From: Alissa Keny-Guyer <alissa@alissakenyguyer.com>
Date: February 19, 2025 at 10:39:57 AM MST
To: Meredith Ross Machen <meredith.machen@gmail.com>
Subject: Fwd: Data on alcohol tax, HB 417
NOTE NEW CELL #!505-210-5000
Begin forwarded message:From: Alissa Keny-Guyer <alissa@alissakenyguyer.com>
Date: February 19, 2025 at 10:25:31 AM MST
To: "NM Rep. Elaine Sena Cortez" <elaine.senacortez@nmlegis.gov>
Subject: Data on alcohol tax, HB 417Rep. Sena Cortez,Here is some of the data you requested about alcohol abuse and how increasing alcohol tax reduces the harms.The Problem: Worst in the Nation
New Mexico has been the WORST state in the nation for per capita alcohol-related deaths and for costs related to alcohol since 1997, and has ranked first, second, or third worst since 1981.
- New Mexicans die of alcohol-related causes at nearly three times the national average;
- one in five deaths of working-age New Mexicans in attributable to alcohol;
- 30-40% of people who die violently in New Mexico have alcohol in their blood
- 20-40% of hospitalized patients have alcohol-related conditions;
- more deaths involve alcohol than fentanyl, heroin, and methamphetamines combined;
- the crisis is escalating, and taking up more and more hospital beds, according NM DOH.
Alcohol-related deaths include injuries in motor-vehicle crashes, violence in which the victim was intoxicated, and illnesses such as liver disease and cancer. 62% of alcohol-attributable deaths in 2021 are due to chronic drinking; 38% of alcohol-related deaths result from acute intoxication such as injuries and poisonings. The health care costs are astounding.
Alcohol abuse is highly correlated with trauma, homelessness, domestic violence, and gun violence – issues that New Mexico struggles with. A NM Department of Health study estimated that in 2018 (latest year for available figures), 101,012 New Mexicans were living with an alcohol use disorder, with 73,178 (72.4%) unable to get treatment.
While higher income New Mexicans may be able to afford treatment, sometimes out of state, low-income people suffer disproportionately from the physical, emotional, and financial costs of alcohol addiction and have no recourse. Without access to treatment, some end up in jail, losing wages and unable to rent, work, and participate in society after release from incarceration – sometimes leading to homelessness. We will remain worst in the nation in so many indicators until we grapple with this problem in a serious, bold manner.
The Solution: Raise the Alcohol Tax for the first time since 1993
The Alcohol Harms Alleviation Coalition formed in 2022 to advocate for the increase in alcohol tax in the ’23 session. It continued growing, meeting biweekly, and gathering feedback about the needs and services during the interim to reintroduce an alcohol tax bill in ’24 and ‘25. We identified over $300 million in needed programs and secured the formal endorsements of 25 groups, including Alcohol Justice, Health Equity Council, NM Alliance of Health Councils, NM Society of Addiction Medicine, and the Tribal Behavioral Health Providers Association.
A) Raise taxes to increase revenue to provide a sizeable and dependable funding stream
Increased revenue can fund our existing programs, and additional wellness programs that address root causes and studies like the HB 213 sponsors suggest, and additional treatment of alcohol use disorder, particularly in low-income families and communities who are ravaged by this disease and have no access to treatment and wrap around services.
We need to dramatically increase prevention (wellness), treatment, and culturally appropriate, trauma-informed wrap-around programs in every corner of the state to help rural and low-income New Mexicans, and those who have suffered from individual and/or societal trauma.
B) Raise alcohol taxes to reduce consumption, particularly to those most price sensitive – youth, heavy drinkers, and low-income populations – resulting in a decrease in cirrhosis deaths, drunken driving, violence and crime, and sexually transmitted disease.
According to Erickson et al, 2018: International research studies have demonstrated that increasing liquor prices can reduce both overall consumption levels and alcohol-related harms at a population level. In particular, raising the minimum price of liquor has been proposed as an effective strategy that especially targets the heaviest drinkers who are known to spend the least money per drink. Studies have found raised minimum prices to be associated with decreased alcohol consumption, reduced alcohol-attributable hospital admissions and mortality, and lowered crime rates. Furthermore, according to a UK modelling study, people with hazardous drinking patterns and low incomes are the most sensitive to raised prices and would exhibit the greatest reductions in consumption, premature death risk and years of life lost.
There are well over a hundred studies showing this correlation, as summed up by:
States that raised alcohol taxes have led to lower consumption. When Alaska raised its alcohol taxes in 1983 and again in 2002, it cut alcohol-related mortality by a total of 40%. When Illinois raised taxes in 2009, it cut fatal alcohol-related crashes by 26%, with an even larger reduction among drivers under 30. When Maryland raised the sales tax levied on alcohol in 2011, the change reduced alcohol sales, accelerated a decline in binge-drinking, and cut alcohol-involved crashes and unsafe sex.
*Note that Maryland tax kept its existing excise (volume-based) tax and added a new sales or ad valorem (price-based) tax to raise more revenue. Fifty states have excise taxes; eleven states have added ad valorem taxes on top of their excise taxes; but none have eliminated their excise tax. David Jernigan, who testified for HB 179 and against HB 213, authored that Maryland tax bill and believes strongly that we need to increase taxes to address our crisis.
In conclusion, increasing taxes is a two-sided coin, with one side providing more resources and the other decreasing consumption, as validated through numerous studies. While the price drives down consumption for some, the added resources are need to treat people with serious addictions who – without treatment - will do whatever they can to access alcohol.
Addressing concerns about increasing the tax, especially for low-income populations:
1) How will this tax impact low-income people?
A 2021 survey by the Centers for Disease Control and Prevention found that New Mexican adults with household incomes of more than $100,000 a year were twice as likely to report drinking in the last month as adults in households earning $25,000 or less. That means wealthy residents are more likely than poor ones to pay any alcohol taxes…. Alcohol imposes many costs above and beyond its sticker price on those who drink excessively — whether lost income due to missed days of work, medical expenses, or property damage sustained while intoxicated — and poor people are most exposed to them. (Ted Alcorn)
Low-income people are more price sensitive and thus have greater decreases in consumption with a higher tax. Higher income people are less likely to drop their consumption, and thus pay increasingly greater percent of the tax. It’s critical, when calculating the cost to low-income populations, that we look not only at the cost of alcohol, but at all the costs born by those populations related to alcohol. Lowering alcohol taxes to “help” low-income people actually costs them far more over time. Looking at it purely through a (regressive) tax lens misses the whole picture of who benefits from the tax.
The article “The Impact of a 25 Cent-per-Drink Alcohol Tax: Who pays the Tab” concludes with “Raising alcohol taxes provides multiple benefits in… public health and economic fairness.”
2) Many studies show the overall impact of higher alcohol taxes on marginalized groups:
Excerpt from “Heterogeneous population effects of an alcohol excise tax increase on sexually transmitted infections morbidity” includes this conclusion from the increase in the Illinois alcohol tax:
“Alcohol excise tax increases differentially affect alcohol-related morbidity, specifically STI rates, across racial and ethnic groups. The largest effects are among the subpopulation with the highest burden from STIs—non-Hispanic blacks—potentially because of their lower average household income and Illinois’ nearly 10 times greater taxation increase on spirits, this subpopulation's preferred beverage. This study confirms findings from previous research that alcohol tax policy has substantial effects on health outcomes, and indicates that the largest health benefits of alcohol tax increases appear to accrue among lower-income and more disadvantaged subpopulations carrying particularly high burdens of disease.”
3) Since pricier drinks lead some people to “downshelf,” it is critical to not make cheaper alcohol even cheaper by taxing it less. Cheap alcohol is still very harmful to the populations we are trying to help, and lowering taxes will ultimately increase health disparities.
4) While some argue that we should fund programs with general dollars from the windfall revenue this year, we can’t count on those dollars in the future. Even if we dedicate all of the current alcohol taxes entirely to alcohol harms reduction, we need a much larger, steady source of funds to build and maintain effective, comprehensive programs year after year.
5) Regarding the concern that New Mexicans will travel to states with cheaper alcohol prices: The actual price of beer in UT, CO, OK and TX is higher than in NM, and AZ has higher prices for hard liquor, presumably because of higher rents, higher wages, and mark-up. (Distributors know New Mexicans are poorer and they keep the prices lower to entice them.) Additionally, it’s unlikely that New Mexicans will spend their time and gas money to find a cheaper deal across state lines. The Alcohol industry has been successful at defeating taxes all over the country, which is why taxes are lower than optimal in most states.
6) For those concerned about small business, small producers of alcohol are exempt from the tax increase in HB 179 so will not be impacted. If anything, customers, restaurants, and hotels may purchase alcohol from small producers because the prices will not change.
Comparison to NM cigarette taxes:
The argument over cigarette taxes has been similar to the one on alcohol taxes; yet New Mexican law makers have increased the cigarette tax four times since 1993, based on the evidence that higher taxes and funding for programs decrease consumption and adverse impacts, especially for price-sensitive populations. Increases have been:
◦ 15¢ per pack from 1987 to 1993
◦ 21¢ per pack from 1994 to 2003, +40%
◦ 91¢ per pack from 2004 to 2009, +430%
◦ $1.66 per pack from 2010 to 2018, +84%
◦ $2.00 per pack beginning July 1, 2019, +20%
The increase from $.15 in 1993 to $2.00 in 2019 is $1.85 - approximately 1340% - in the same period that the alcohol tax hasn’t increased at all! Someone has to drink over 15 drinks with the proposed 12 cent alcohol tax to pay the same tax increase on one pack of cigarettes since 1993.
Other compelling articles about raising alcohol taxes to save lives:
- Increase the alcohol tax and save lives: It's that simple
- The U.S. must raise federal alcohol taxes to address the alarming rise in alcohol use
- 1 in 5 deaths of US adults 20 to 49 is from excessive drinking, study shows
- OPINION: Astonishingly low alcohol excise taxes are harming NM communities
Compelling comments on HB 179 on Jan 29 from the sponsors (10:31:30) and people offering public comment (10:54:00) include many from impacted communities and support HB 179.
Thank you for your incredibly hard work in this intense 30-day session!
Alissa Keny-Guyer
505-210-5000