Reader View: Stop subsidizing excessive drinking

In an article earlier this year (“Advocates fear looming cuts to N.M. behavioral health services,” Jan. 31),The New Mexicanreported: “Both the governor and the Legislature have asked for a reduction in spending on the Human Services Department’s Behavioral Health Services Division, which has been critical in funding substance-abuse prevention programs across the state.”

This is a backward policy. Right now our lawmakers are choosing to subsidize excessive drinking and the harm it causes. Whether or not a person drinks, every New Mexican pays $406 a year in taxes to cover the costs of ambulances, indigent and emergency room care, extra police work, court cases and detention for excessive drinkers and the people they injure through car crashes and assaults. Increasing the alcohol excise tax by 25 cents per drink lets excessive drinking pay for excessive drinking harms.

Our state would see an annual revenue boost of $154 million by raising alcohol excise taxes 25 cents per drink. Imagine if we used that money to pay for services being slashed. Every dollar spent on prevention now saves $9 down the road. Or better yet, for the required 5 percent match for the newly insured by Medicaid?

Over the past two years, the federal government paid for expanding Medicaid to more than 200,000 previously uninsured New Mexicans. Starting in 2017, we’re required to pay a 5 percent match to keep this health care bonanza serving our state. Instead of looking for ways to slash funds, lawmakers should be rejoicing that the federal government will give a 95 percent Medicaid expansion match —pumping more than $1.6 billion back into New Mexico’s stagnant economy — if only we show the political will to make the initial payment, which raising alcohol taxes can provide.

Alcohol excise taxes haven’t been raised since 1993. That’s more than 20 years in a row alcohol that companies have been give what amounts to a tax break due to inflation. Can you say your taxes haven’t been raised since 1993? Alcohol companies sure can.

According to the Centers of Disease Control and Prevention, only 18 percent of New Mexicans drink excessively, yet excessive drinking costs the state economy $2.2 billion a year, due to lost workdays, workplace accidents and increased insurance costs. Raising the alcohol excise tax 25 cents per drink in New Mexico would boost the state economy by $128 million a year by eliminating about 10 percent of these costs. On top of this, it would create 2,700 new jobs because of the increased tax revenues, over and above accounting for jobs lost in the liquor industry.

So what’s it going to be? Continue to subsidize excessive drinking and the harms it causes, or let the 18 percent of excessive drinking New Mexicans pay for the harms their behavior creates by raising the alcohol excise tax 25 cents a drink? Force cash-strapped New Mexicans to each pay more than $400 a year in unnecessary taxes and business owners to lose $2.2 billion in revenues, or shift the cost to those who are creating the problem?

See the state’s economy lose another $1.6 billion a year in federal health care funding — forcing counties to use local taxes to pick up that slack and pay for indigent care for the more than 200,000 newly insured Medicaid enrollees — or use some of the revenues generated from an alcohol tax increase to pay a 5 percent match to keep people healthy? There’s plenty of money for behavior health care available, but our lawmakers first need to stop subsidizing the health harms caused by excessive drinking.

Peter DeBenedittis, Ph.D., is director of Alcohol Taxes Save Lives and Money (www.alcoholtaxessavelives.org).

Originaly Posted in Santafe New Mexican April 9th 2016 see the original article.

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Tax alcohol to rescue Medicaid

Tax alcohol to rescue Medicaid

Rather than kill off what helps New Mexicans by cutting Medicaid, we should be raising alcohol taxes so we can put an end to what’s really breaking our state’s budget and causing so much of our medical woes.

The Journal’s March 10 editorial raised the alarm that we’re looking at a $417 million Medicaid shortfall. If you think that’s a ridiculously high amount, you’ll be stunned to know that the cost of excessive drinking to New Mexico’s local and state governments in 2013 was $793,500,000! These are costs hidden in our personal income and gross receipts taxes to pay for the extra police, ambulances, court cases, detention and hospital care that results from excessive drinking.

Only 18 percent of New Mexicans drink excessively. The other 82 percent of us drink responsibly or don’t drink at all. So whether or not you drink you’re being taxed the equivalent of $1 per drink for someone who’s getting sloshed. This costs each of us $400 per person per year in “hidden” taxes.

If we want to keep the state healthy, let’s raise alcohol taxes. We can recoup some of the money excessive drinking costs taxpayers and use it for the Medicaid shortfall. New Mexico leads the nation in alcohol-related deaths. Sixteen percent of all deaths in our state are caused by the alcohol crashes, poisonings and long-term diseases like liver failure and breast cancer that excessive drinking causes.

According to the Center for Disease Control’s Community Advisory Panel, raising alcohol taxes is the most effective way to reduce the health harms caused by excessive drinking.

The Alcohol Taxes Saves Lives & Money coalition has been advocating for a 25-cent-per-drink increase to the alcohol excise tax. Alcohol taxes haven’t been raised in New Mexico since 1993. Can you say that about your taxes?

Even though a 25-cent-per-drink increase in alcohol taxes would only recoup a quarter of the harms caused by excessive drinking, it would be a step toward having excessive drinkers pay for the harms their actions cause – rather than continuing to dump these costs on taxpayers.

And raising alcohol excise taxes would not only generate money to help pay for the Medicaid shortfall, it would significantly reduce health care costs because it would reduce alcohol consumption among excessive drinkers by about 10 percent. Their reduced drinking would, over the long run, prevent a sizeable chunk of the diseases Medicaid is being asked to pay for.

A 25-cent-per-drink increase in the alcohol excise tax would raise $154 million a year in revenues. That would be more than enough to pay for the match required for the 200,000 newly enrolled Medicaid recipients and still leave some money to go toward making up the $417 million shortfall. Remember, in 2017 the federal government will be paying a 95 percent match for these 200,000-plus enrollees if we put up the initial 5 percent. The federal match would bring over $1 billion in health care funding to New Mexico, so we’d be fools to let that economic boom slip away.

The beauty of using increased alcohol excise taxes to pay for Medicaid is that the CDC reports 49 percent of New Mexicans haven’t had a drink in the last 30 days. So about half of us won’t be paying an extra cent to keep our state healthy. The 32 percent of New Mexicans who drink responsibly would average paying only about $11 more per year – a small price considering the harms excessive drinking causes. The bulk of the tax increase will be borne by the 18 percent causing the biggest problems.

Before cutting Medicaid, our lawmakers should own up to the fact that they’ve let the alcohol industry get a free pass while every New Mexican is being required to pay $400 a year to subsidize excessive drinking. By shifting the burden of paying for excessive drinking harms to excessive drinkers, we’ll go a long way toward having the money needed to keep Medicaid funded. And we’ll also gain the benefit of having less health care costs over time that Medicaid has to pay out.

All figures used in this editorial are from a report funded by Bernalillo County on the impact of a 25-cent-per-drink alcohol excise tax increase. The full report is available here.

Originaly published March 16th, 2016 in the Albuquerque Journal

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