State Alcohol Taxes Creep Up, But Not to Benefit of Treatment and Prevention Programs

The Marin Institute, a California-based alcohol industry watchdog, recently reported (PDF) that of the 25 states that put alcohol-tax proposals before lawmakers in 2009, six -- Illinois, Kentucky, Massachusetts, New Jersey, New York, and North Carolina -- successfully passed laws. Marin estimated that the taxes would generate $340 million for the public coffers of these cash-starved states, but lamented the missed opportunities in the others.

Surveys have shown that taxpayers support using alcohol tax revenues to pay for addiction treatment and other related services. However, the laws passed in 2009 largely failed to draw that connection. Measures that would have dedicated a portion of alcohol tax money to treatment and prevention were defeated in Montana, New Hampshire, New Mexico, New York, and Oregon, for example.

Of the bills that passed, the New Jersey bill specifies that $22 million be directed toward a healthcare subsidy fund. Advocates in Massachusetts came closest to winning dedicated funding for treatment and prevention, ultimately securing an informal agreement with lawmakers to hold addiction services harmless from state budget cuts in exchange for support of a successful campaign to end the state's sales-tax exemption for alcoholic beverages.

The outcome was disappointing to advocates who believed the time was right to argue in favor of expanding such taxes. "Given the state of the economy, if ever there was an opportunity to see change, this would be it," said Michele Simon, research and policy director at Marin.

"The current fiscal crisis has made it easier for advocates to successfully argue for increasing tax revenues, but getting that tax money to pay for treatment and prevention remains difficult," added Vic DiGravio, president and CEO of the Association for Behavioral Healthcare in Massachusetts.