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Increasing alcohol tax responsible thing to do

--Homer News - April 26

Posted: Monday, April 30, 2001

Say the city of Homer created a new enterprise that provided a popular service to city residents. And say for every dollar it spent to provide the service, it regained only a nickel from the users. The difference was made up by taxpayers.

How long do you think it would take for a taxpayer revolt to begin? If the real cost were obvious, as would be the case in an enterprise fund, it wouldn't take long. But this analogy is not used in shedding light on an enterprise fund. It is for shedding light on what, appropriately, is being called Alaska's hidden tax -- the cost to taxpayers of alcohol and drug abuse and dependence.

According to the recently released annual report of the state's Advisory Board on Alcoholism and Drug Abuse, in 1999 the estimated cost of alcohol abuse to Alaska taxpayers was about $250 million. The amount of that cost recovered from taxes on alcoholic beverages in Alaska was $12 million. That is a nickel recovered for every $1 spent.

The burden on taxpayers from alcohol abuse includes the cost of crime committed as a result of alcohol abuse -- from drunken driving to property and violent crime; the lifetime expense of caring for children born with fetal alcohol syndrome; the cost of protective custody for public inebriates; the cost of prison and juvenile detention; and the cost of health care for chronic alcohol-related illnesses. Further hidden is the private loss to individuals and families who suffer reduced incomes and higher expenses from the chronic effects of alcohol abuse, and to businesses that employ them and experience lower productivity.

The Alaska State Legislature is currently considering increases to the state tax on alcohol. Numerous bills have been introduced, although one spearheaded by state Rep. Lisa Murkowski is now in House committee. Such bills have not been popular among lawmakers in recent years. Perhaps they threaten the moneyed interests or the powerful, or perhaps they do not promise an immediate benefit for a lawmaker. After all, reducing alcoholism is a long-term proposition. And the benefits to the taxpayers may be as hidden as the hidden tax is now.

There should be sensitivity to the chilling effect of a new tax on the livelihood of those whose paychecks come from the alcohol industry. But in the long term, more revenues from alcohol taxes will make revenues for addressing alcohol abuse more readily available. It would take far less money than is now being spent to pay for the effects of alcohol abuse to

prevent much of that abuse.

Two things must happen first. A significant increase in the tax on alcohol needs to be approved or phased in, and the state needs to spend more to address prevention of alcohol abuse.

This should be a nonpartisan issue. For Republicans and Democrats, this is a matter of fiscal responsibility to taxpayers and providing important social services to this state's residents.



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