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 selected Legislators' state campaigns in 2002.

Common Cause / New Mexico

Current excise taxes on beer, wine, and liquor generate approximately $42 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!

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. Our legislators need to address this fact, eventually.
However, for the moment, by increasing the distribution of the existing alcohol excise taxes collected directly to County DWI Programs, (from $13 million to $21 million of a total of $42 million, which is a 50% increase), these programs would improve in quality and local coverage.
This would allow counties to hire trained professionals, which most counties now lack, or can only retain on a part-time basis. For example, most counties don't have compliance monitoring to determine whether the sanctions assigned by the court are actually enacted upon. With these professionals in place, new programs can be implemented to address all the causes of alcohol abuse in individual counties, not just the phenomenon of DWI. Such programs are based on scientific evidence and are used successfully in other states.

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.

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.