State lawmakers in New Mexico are holding a special session to consider a proposal from Gov. Bill Richards that would increase the tax on alcohol to help address the state budget deficit, the Albuquerque Tribune reported Oct. 27.The recommendation for the alcohol-tax increase, as well as a tobacco hike, was made by the Blue Ribbon Tax Reform Commission, a 23-member bipartisan committee.
One type of alcohol tax under consideration is a "dime-a-drink" tax. The plan is expected to bring in about $76 million annually by increasing the price of a drink by 10 cents.
While the New Mexico Council of the American Federation of State, County and Municipal Employees and several community organizations support the measure, it is vehemently opposed by liquor retailers.
"There's one word for it: devastating," said Marco Otero, owner of Central Market, which sells beer, alcohol, tobacco products, and groceries in Santa Fe. "Beer just went up, and there's a tremendous impact. If they keep hitting us with these taxes, pretty soon I'm out of business."
"The commission recommendations are basically tax increases," said Rep. Ted Hobbs (R-Albuquerque), state House of Representatives minority leader. "I'm going to have problems with that." Hobbs added that other House Republicans would likely fight the increases.
Compared to neighboring states, New Mexico's alcohol tax is high. The current rate is $6.06 per liter of spirits and 41 cents per liter of beer. In Texas, the tax rate is $2.40 per liter of spirits and 20 cents for beer, while in Arizona, the rate is $3 for spirits and 16 cents for beer.
Those who support a higher alcohol tax say the proposal has a redeeming social value in discouraging underage drinking, drunk driving, and other alcohol-related health expenses.
"Yes, we do have a high tax rate, yet we do have the third-highest death rate for alcohol abuse," said Jill Ann Yeagley, a member of the Alcohol Issues Consortium, which supports the dime-a-drink plan. "I think we're justified."
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