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Tax Hikes Can Cut Underage Drinking, Raise Revenue
September 28, 2000

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Armed with a Robert Wood Johnson Foundation grant, the Center for Science in the Public Interest (CSPI) and the American Medical Association (AMA) are helping communities explore the use of alcohol excise taxes to prevent underage drinking and, in some instances, raise money for treatment and prevention.

CSPI and the AMA's Office of Alcohol and Other Drug Abuse -- charged with the mission of reducing high-risk drinking among youth -- hosted an April meeting in Denver that drew representatives from seven states that either are moving forward with advocacy efforts to increase alcohol excise taxes or are considering doing so. "We wanted to utilize the knowledge and experience that has developed at the state level on this issue and to provide a forum where that knowledge could be shared and added to," George Hacker, director of CSPI's Alcohol Policies Project, told Join Together.

Participants included Glenn Wieringa, a health educator in the New Mexico Department of Health, who has worked to generate data to support his state's 1993 alcohol excise tax increase. Those taxes were used to create a network of DWI Planning Councils and to fund impaired-driving related law enforcement, treatment and prevention, to the tune of about $10 million annually. "New Mexico is a lot further ahead of the rest of the states," noted Wieringa. "It does surprise me that more states haven't tried this."

One reason, as both Hacker and Wieringa point out, is that raising alcohol taxes means picking a fight with powerful industry lobbyists and their friends in state legislatures. In Louisiana, for instance, advocates like Sharron Ayers, executive director of the Louisiana Alliance to Prevent Underage Drinking, recently fought a losing battle to win a tax hike, despite strong public support for a measure that would have dedicated tax revenues to a badly needed pay hike for the state's school teachers. "The headlines said the lobbyists won, and the public lost," noted Ayers.

Despite the challenges, however, interest in raising excise taxes is growing, Ayers said. "Of all the policies we've been working on in the last two years, this is the one that has garnered the most national support," she said.

Tying tax revenues to a popular cause is just one tactic advocates can use to win support for raising alcohol excise taxes. Wieringa said that the New Mexico tax was passed initially because it was proposed in the wake of a tragic impaired-driving crash in 1992. To maintain support for the law, however, advocates have fed policymakers a steady stream of data on the economic and health-care impact of alcohol and other drug abuse.

New Mexico advocates, for instance, have used information from the 1998 federal report, "Economic Costs of Alcohol and Drug Abuse in the United States," to highlight the fact that alcohol-related hospital visits alone justify the tax increase. "Just raising the taxes should have a positive prevention effect," noted Hacker.

"Gathering data that shows the cost of high-risk drinking should be the first place you start," Wieringa advises other communities considering an alcohol tax hike. "You also need to recognize what you're getting yourself into, and be patient."

Another tactic is to raise public awareness of the link between tax policies and alcohol-industry lobbying and donations to political candidates. "You need to know your local politicians and the history of this issue in your state, and recognize that this is an issue that will generate opposition from all segments of the alcoholic beverage industry," Hacker said. "It will take planning, resources, organization and hard work. In some places, the legislative approach may not be the best way." One way to get around legislative roadblocks: try a ballot referendum if allowed in your state, Hacker advises.

Pointing to data that show a marked decline in DUI offenses since 1993, New Mexico advocates currently are backing legislation that would allow county residents to approve local alcohol taxes. The model for this initiative is McKinley County, which has used its "local option" law to raise alcohol taxes three times since 1989, and has raised about $800,000 annually for treatment and prevention programs. The county, which once had the highest alcohol-related mortality rate in the country, has seen those rates decline dramatically during the last decade, according to a recent outcome study.

CSPI and the AMA plan to hold more meetings on the subject of alcohol excise taxes; contact CSPI's Alcohol Policies Project (202-332-9110) if you are interested in participating. CSPI also has published State Alcohol Taxes and Health: A Citizen's Action Guide.