ARE YOUR LEGISLATORS UNDER THE INFLUENCE?
A report published by Common Cause, New Mexico, makes the undue influence of the alcohol industry on our legislators disturbingly clear.
A study by Research and Polling, Inc., indicates that 69% of New Mexican voters would support an increase in the New Mexico State's
alcohol excise tax, if the extra money were used as part of an effort to fund alcohol abuse treatment and prevention programs.
In 2003, the National Academy of Sciences recommended that states raise alcohol taxes to discourage underage drinking.
Governor Bill Richardson proposed an increase in New Mexico's alcohol excise tax, that same year.
He appointed the Blue
Ribbon Tax Commission to study tax proposals, and make policy recommendations to the Legislature.
Three members, who had been given a total of $16,325 from the alcohol industry, sat on this Commission.
The governor appointed a former liquor lobbyist to staff the commission.
In one meeting, the commission
voted to recommend an increase in the alcohol excise tax, only to call a re-vote on the very same day, and strike
down the proposed recommendation.
The 2004 Legislature never considered the issue. The minutes of this meeting have never been made public.
With so much momentum for an increase in the alcohol excise tax, why did lawmakers fail to act?
Campaign contributions suggest an answer.
*The alcohol industry contributed $237,471. to state campaigns in 2002.
*The alcohol industry gave $30,850. to the House and Senate Leaders over the past three election cycles.
*The alcohol industry contributed $16,100. to five key committee chairs over the past three election cycles.
*The alcohol industry gave $16,325.to three key legislators on the Blue Ribbon Tax Commission over the past three election cycles.
Common Cause / New Mexico
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THE TAXPAYER'S BURDEN FOR
ALCOHOL CONSUMPTION |
WHAT IS ALCOHOL EXCISE TAX?
Current excise taxes on beer, wine, and liquor generate approximately $39
million annually, of which $13 million is directed to the DWI Program
Grant Fund, which funds DWI programs in 33 counties throughout New Mexico.
$15 million is directed to fund the State's programs for prevention and
treatment of alcohol abuse, provided by the State Health Department.
The balance of the tax collected from alcohol sales is placed in the
State's general fund for multiple uses, which are not broken down into
specific categories. This means that just $28 million, derived from alcohol
sales, is available to offset the costs from alcohol abuse, over ONE BILLION DOLLARS!
The rest of this huge sum is paid by taxpayers---YOU!
Does this make sense? Is this fair? Is this what you want to happen?
Well, apparently, the majority of those officials, elected by you to represent us
in the Legislature think so.
Otherwise, the proposals made each Legislative Session
over the past ten years would already have been enacted upon, to give the taxpayer a fair break.
The cost burden would have been placed where it belongs -- on alcohol consumers,
when they buy it. Why hasn't this injustice been corrected by the people,
whom we have sent to our Legislature? Please read the sidebar to the left,
"ARE YOUR LEGISLATORS UNDER THE INFLUENCE?"
For more information on the subject. (Common Cause compiled this information.)
ALCOHOL ABUSE COSTS N.M. TAXPAYERS OVER $1 BILLON PER YEAR.
*UNDERAGE DRINKING:$671 MILLION
(documented by the Pacific Institute for Research and Evaluation)
*HOSPITALIZATION CHARGES: $74 MILLION
(documented by the New Mexico Dept. of Health- alcohol related)
*DWI CRASH RELATED COSTS: $940 MILLION
(documented by the Federal Highway Administration)
Total of Documented Costs (2003): $1.7 BILLION
ADD TO THIS $1.7 BILLION THE UNKNOWN COST OR VALUE OF:
*EACH LIFE LOST
*QUALITY OF LIFE LOST (for survivors)
*UNNECESSARY PAIN AND SUFFERING (of victims)
*LOST INCOME AND SAVINGS DEPLETED
*LOST PRODUCTIVITY TO EMPLOYERS
*LOSS OF A LOVED-ONE
*LOSS OF A PARENT (S)
REMEMBER: UNLIKE CANCER OR HEART DISEASE, DEATH, INJURY OR DISABILITY FROM ALCOHOL ABUSE IS TOTALLY AVOIDABLE!!!
It may be of interest to you to know that the collection of alcohol excise taxes by the State
is done on the "honor system". That's right! No audit is made to ensure that these taxes are
actually, and completely, represent what is really due from the sale of alcohol to the State.
The last increase in alcohol taxes occurred in 1993. Since then, inflation has devalued the
"purchasing value" of these funds by over 33%.
However, in spite of all these facts listed above, special interest groups have persuaded
Legislators not to increase the tax. Why? Those, who sell, distribute, and manufacture alcohol
know that if the cost of alcoholic beverages increases, by just about a dime a drink, then their sales might decrease.
Beer accounts for 66% of total alcohol sales in the State of New Mexico, and is the "drug of choice"
among youth, and DWI offenders.
The current tax structure, however, taxes beer at a lower rate than wine or liquor: $0.41 per gallon of beer,
$0.45 per liter of wine, and $1.60 per liter of liquor.
The last increase in the alcohol excise tax occurred in 1993, in conjunction with major DWI legislative reform.
Because of inflation, the real value of the excise tax on alcohol has decreased, causing a decrease in the
overall alcohol price. Lower alcohol prices increased consumption among youth and adults.
The American public supports increases in alcohol taxes, mainly because alcohol tax cuts would benefit
only producers and their heaviest drinking customers, the 20% of drinkers who consume 85% of the alcohol.
The vast majority of adult drinkers (75%) average just 5 drinks per week, and account for only 13% of adult consumption.
Alcohol producers are prospering, and, despite assertions that the tax cuts would benefit consumers, they have not
hesitated to raise prices periodically to maximize profits. They aren't concerned about ordinary consumers, because
they know that most of their revenue comes from the least price-sensitive heavy drinkers, who are either addicted,
or potentially in trouble with alcohol.
Tax increase on alcohol will enable funds for youth prevention and treatment programs,
and can provide a substantial source of new revenue to support alcohol treatment for
chronic alcoholics, and financial sources for victims of DWI.
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THE ALCOHOL INDUSTRY:
PROFILE:
Economic giant, complex, influential, and increasingly international in ownership.
Effective in influencing how the media, public, and decision makers think about alcohol,
alcohol consumption and alcohol problems.
Constant in its policies, educational activities, and marketing:
Drinking is an individual choice; problems derive from irresponsible individual drinkers;
most drinkers are responsible. Control policies ought to focus on
punishing irresponsible individual drinkers - no one else.
Institute for Social Research - University of New Mexico
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IF HISTORY REPEATS ITSELF WE CAN EXPECT A BLOODY BATTLE WITH THE ALCOHOL INDUSTRY.
We have been down this road before. Both the Legislature and the Special Interest Groups have shown us in the past that
they do not believe that they have any obligation or reason to treat the voters/taxpayers fairly. Last year,
the State's County DWI Programs were promised an increase in prevention and treatment program funding.
The amount involved would have allowed the counties to improve and increase their programs.
Yet the amount of increase, from $13 million to $20 million, (of the $39 million collected)
was just a drop in the bucket compared to the costs.
This agreement was a compromise, worked
out with key legislators by a coalition of alcohol treatment and prevention groups.
The coalition had concluded, with the encouragement of the lawmakers, that a small amount was
better than nothing. It was supposed to have been a "done-deal". Yet, due to influence of
special interest groups that deal failed to even make it to the floor for a vote, during a 60-day session.
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ARGUMENTS USED BY THE ALCOHOL INDUSTRY TO TRY AND PROVE THAT A TAX INCREASE IS UNNECESSARY AND EVEN HARMFUL
Argument: The 33 counties do not spend, and fully utilize the $13 million dollars,
which are currently allocated. Therefore, why do they need more money?
Response: This is partly true but, only because the current Department of Finance and Administration
(DFA) bookkeeping bureaucracy.
The DWI-related monies, which are unspent each year, represent budget
"line items" which have been designated for contractual work. Since these contractors are working with
a varying client/patient load each year, it is not possible to precisely predict the amount of money
required for that purpose.
The DFA requires the counties to obtain written permission in order to
transfer from one line item category to another. This permission often takes a month or more to obtain.
The contractors often cannot inform the counties more than thirty days in advance of the close of the
fiscal year if they expect to have monies left over, because of the contractor's varying caseload, and
they do not want to be caught short of funds.
This short lead-time often makes transferring money,
which will be "left over" into another category, where it may be badly needed. In addition,
DFA requires all monies from one fiscal year to be sent and paid out, prior to the beginning
of the next fiscal year, thus adding to the problem of relocating funds.
The need for more and
improved alcohol abuse related programs has nothing to do with the DFA "turning back" funds, as
is often misrepresented by the special interest groups in their campaign to discredit the need to raise the tax on alcohol.
Argument: Huge increases in taxes would negatively impact tourism and the restaurant business.
Response: The actual increase in cost to alcohol consumers in a bar,
restaurant, or supermarket would be about nine cents per 12 oz. bottle of beer. (About a dime a drink!)
Argument: Increase in tax would increase sales to minors.
Response: Sales to minors is always a problem, which requires law enforcement effort, which is
already in place, and has been increasingly effective in encouraging sales to minors.
Also, since June 2005, the fines and other sanctions for selling to minors have been increased
to up to $5,000 and now apply to adults, as well as businesses, which provide alcohol to minors.
Argument: Internet sales of alcoholic beverages escape the tax and sell to underage individuals.
Response: All Internet sales usually escape sales taxes. This is an issue,
which involves interstate commerce, and thus, must be addressed at the Congressional
level and has nothing to do with New Mexico raising its alcohol taxes.
Argument: The wholesaler must still pay state excise taxes, when selling or distributing alcoholic
beverages and even if the wholesaler cannot collect from the retailer.
Response: This is a traditional business risk issue and has nothing to do with raising the tax rate.
Especially since the mechanism for collecting the existing tax is already in place.
Argument: New Mexico already has a reputation as a High Tax State,
and huge increases in liquor excise tax would further hurt this state's image.
Response: Hurt our image? This state's image is already badly damaged,
when drunk drivers kill tourists and natives alike.
As an example, still fresh in our memories,
are the two couples from Nebraska, who were killed by a repeat offender.
If the Alcohol Industry is really concerned about this state's image and the citizens of this state,
then it would encourage a tax level, which would help offset the damage, which their products cause.
CLICK HERE to read Proposed Legislation
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