No Happy Hour for States In the Red

Marin Institute Reports on Alcohol Revenue and State Budgets in Crisis

SAN RAFAEL, Calif., Nov. 17 /PRNewswire-USNewswire/ — Marin Institute, the alcohol industry watchdog, released a report today analyzing the successes and failures of states that proposed bills to raise alcohol taxes during the 2009 legislative session.

Twenty-five states introduced bills in 2009 to increase alcohol revenue, 14 of the measures were defeated thanks in large part to industry lobbying, leaving an estimated $2.6 billion dollars on the table. Moreover, because most alcohol taxes are not adjusted for inflation, U.S. state and federal treasuries lost an estimated $5.87 billion in real beer tax revenue alone in 2008.

“Not since the Great Depression have states been so challenged economically,” stated Michele Simon, research and policy director at Marin Institute. “And yet by caving to Big Alcohol lobbying pressure, legislators are foregoing valuable revenue and contributing to the gap between the cost of alcohol-related harm and our ability to pay for it.”

Alcohol tax revenue has been a reliable and popular source of income for states, especially when the money is allocated to treatment or prevention programs, which makes sense considering that taxpayers generally pay the tab for alcohol-related harm (e.g. police and healthcare costs). However, due to intense industry lobbying, state and federal governments remain hesitant to keep alcohol tax rates up to date. “The growing gap between the decrease in the real value of alcohol taxes and prices and the costs of the negative consequences of drinking is a ticking time bomb,” Simon stated.

Six states: Illinois, Kentucky, Massachusetts, New Jersey, New York, and North Carolina, passed bills and will be seeing an estimated $340 million dollars in new revenue. Ten states still have alcohol revenue legislation pending, including California. There, Assembly Bill 1019 could raise $1.44 billion to establish the Alcohol-Related Services Program, which would help mitigate the estimated $38.4 billion in annual alcohol-related harm in the golden state.

“Marin Institute recommends that policymakers and advocates revisit alcohol tax rates in their states and consider introducing new “charge for harm” legislation that would allocate revenue to programs and services to help reduce underage and excessive drinking and various types of alcohol-related harm,” added Simon. “States should index tax rates to inflation, so the real value does not decrease over time, and make the tax increases permanent.”

To download the entire report, In the Red, Alcohol Revenue and State Budgets in Crisis please visit MarinInstitute.org.

Contact: Michael Scippa 415-548-0492

Jorge Castillo 213-840-3336