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Advocates renew push for quarter-a-drink alcohol tax hike

Dr. J. Pedro Teixeira said one in eight beds in UNM Hospital’s medical Intensive Care Unit at the end of 2023 was filled by someone there due to drinking. Ted Alcorn/New Mexico In Depth
New Mexico has seen a record-setting rate of alcohol deaths – higher than any other state and triple the national rate

As 2023 came to a close, holiday celebrations slowed New Mexican workplaces to a crawl and many residents raised glasses to toast the new year. But UNM Hospital’s medical intensive care unit remained busy, caring for scores of patients who barely clung to life. As usual, the primary factor landing many of them there was excess drinking.

There was a man in his 70s with liver cancer caused by alcohol who had begun bleeding internally, developed mental confusion, and was now in a coma. A 50-something woman so dependent on alcohol that when she abstained, she went into severe withdrawal and developed a case of pneumonia serious enough to put her on a ventilator. A slightly younger woman with liver cirrhosis who had taken a hard fall, breaking an arm and causing bleeding under her skull. A 30-something woman with heart failure due to chronic drinking.

Upon reviewing the cases, Dr. J. Pedro Teixeira, who has worked on the unit for four years, calculated one of every eight beds was filled by someone there because of alcohol. “If anything, I would expect somewhat more,” he wrote by email.

New Mexico’s record-setting rate of alcohol deaths – higher than any other state and triple the national rate – is readily apparent on Teixeira’s rounds. Of a dozen settings across the country in which he’s trained or practiced, he said, none comes close to New Mexico’s level of alcohol-related disease and injury. “There’s no question in my mind.”

After a year in which the state’s alcohol crisis showed no sign of letting up, and in which its political leaders did nothing substantial to address the problem, public health advocates say they are renewing an effort to get lawmakers to act. During the legislative session, they will introduce a bill to raise the state’s alcohol taxes a quarter per drink, making it costlier to consume in excess and generating hundreds of millions of dollars for treatment and prevention programs.

Raising alcohol taxes has “substantial” potential for preventing deaths due to drinking, according to a recent report by the World Health Organization. After Alaska, Maryland, and Illinois raised their tax rates, they experienced significant reductions in injuries and illnesses related to drinking.

Sen. Shannon Pinto, a Democrat from Tohatchi and member of the Navajo Nation who is co-sponsoring the alcohol tax bill, said that passing it this session was among her top priorities, given the damage excess drinking has wrought on her constituents and loved ones. “I’ve buried more members of my family due to alcoholism than COVID,” she said.

New Mexico hasn’t raised alcohol taxes in 30 years, and the rates don’t adjust for inflation. As the price of a drink has risen, the tax on that drink has not grown along with it. Alcohol taxes in 1994 ranged from 4¢ per 12-ounce beer to 7¢ per shot of liquor, and remain the same today, at their lowest real value in a generation.

A draft of the bill shared by its sponsors resembles legislation they pushed last session, which would have raised taxes on all types of alcohol to 25¢ a drink. Members of the House and Senate tax committees repeatedly pared back that amount and ultimately passed a mere penny-a-drink tax increase, which Gov. Michelle Lujan Grisham then line-item vetoed. This perplexed many observers given that the governor simultaneously rejected a measure directing all alcohol tax revenues to treatment and prevention, which both public health advocates and alcohol businesses had supported.

Shelley Mann-Lev, one of the leaders of the Alcohol Harms Alleviation Coalition that promoted last year’s effort, said the defeat was a mixed bag. “It was very disappointing,” she said, but the fact the bill made it all the way to the governor’s desk was “the most hopeful thing I’ve seen in years.”

Whether it is constitutional for the governor to veto individual items in a tax bill is being challenged before the New Mexico Supreme Court.

One of the sponsors of the alcohol tax hike, Rep. Joanne Ferrary, D-Las Cruces, said that this autumn she met multiple times with the governor’s cabinet officials and senior staff, hoping to hammer out language Lujan Grisham would endorse. At a Dec. 29 meeting on the fourth floor of the capitol, the governor’s chief of staff and health adviser said that the governor “wasn’t likely to veto” the bill, according to Ferrary.

The governor’s spokesperson declined to answer whether she would support or oppose an alcohol tax increase, citing “ongoing conversations” with the bill’s sponsors.

This year’s proposal is more ambitious than last year’s but also more detailed, which advocates believe will garner broader support. It would raise alcohol taxes by 25¢ per drink, meaning the new rates would range between 29¢ and 32¢ per drink, depending on the type of alcohol, and would be indexed to inflation. It includes language adopted during last year’s debates that exempts microbrewers, small wineries, and craft distillers from the tax increase, potentially giving local companies a competitive advantage over major out-of-state brands. And on request from the Department of Taxation and Revenue, it specifies tax increases for ready-to-drink cocktails, hard seltzers, and wine coolers, which had not been included in last year’s bill.

The bill’s sponsors are also trying to be more prescriptive about how to use funds generated by the tax increase, which they estimate at around $250 million annually. With input from state agencies, the sponsors developed a list of over 40 potential recipients that could use the funds to help prevent and treat alcohol’s harms, including programs to support Native Americans transitioning to sober-living, to provide behavioral health treatment for uninsured people, and to prevent and care for those affected by domestic violence.

In an interview, Charles Sallee, director of the Legislative Finance Committee, agreed that New Mexico needed to spend more on alcohol treatment and prevention but said such a large infusion could be hard for agencies to absorb. “My big concern is the feasibility of government to use those resources,” he said.

J.D. Bullington, an experienced lobbyist who represented the Greater Albuquerque Chamber of Commerce in opposing last year’s measure, predicted that “a proposed tax increase of that magnitude is probably going to have a very difficult road.”

Members of the Alcohol Harms Alleviation Coalition said that since last year’s defeat they’ve built support around the state, obtaining endorsements from more than a dozen groups including Mothers Against Drunk Driving, the New Mexico Alliance of Health Councils, and the Doña Ana and Bernalillo county commissions.

Awarded a $80,000 grant by the state’s Behavioral Health Services division, members of the coalition also presented to over 20 state and county organizations to raise awareness about evidence-based strategies to reduce alcohol related deaths.

And for the coming session, the state chapter of the League of Women Voters hired a lobbyist, Linda Siegle, to advocate for the tax increase.

But if last year’s session is any indication, they will face a phalanx of lobbyists representing alcohol and hospitality businesses, which give tens of thousands of dollars to the campaigns of the governor and legislators each year.Dan Weaks, who represents the New Mexico Wine and Grape Growers Association and the California-based Wine Institute, said alcohol lobbyists had already been meeting together to decide “how to handle” the legislation.

At a Dec. 5 hearing of the interim Revenue Stabilization and Tax Policy Committee, legislators who gutted last year’s bill continued to express reservations.

Rep. Micaela Lara Cadena, a progressive Democrat in her third term representing Mesilla, told advocates she was “committed to considering what you’ve brought before us” but suggested the effort was fundamentally misplaced. “Alcohol is not the harm; it’s the self-medication,” she said, arguing that a tax increase would not address what she said were the root causes of excess drinking: the state’s legacy of colonization and genocide of Native peoples.

She did not answer emailed questions about what policies she would prioritize to address the state’s soaring alcohol death rate in the context of that history, nor whether directing alcohol tax revenues to disadvantaged groups including tribes and pueblos would be a positive step.

The committee’s vice chairman, Rep. Derrick Lente, D-Sandia, warned that debates over the bill would become “emotional” and said he’d prefer that industry and activists negotiate an agreement. “If I can be a dealmaker, I would love that opportunity,” he said.

Mann-Lev told him she welcomed dialogue with industry but was skeptical it would be productive. Tobacco businesses have never supported increases in cigarette taxes, she pointed out, yet the state has repeatedly raised rates over their objections.

In an interview, Ebbie Edmonston, head of the New Mexico Brewers Guild, said her trade organization was open to discussion but the guild’s top priority in the coming legislative session was keeping alcohol taxes at “a manageable rate.” Calling last year’s quarter-a-drink hike “absurd,” she declined to specify what size increase would be acceptable.

Upon learning that this year’s proposal exempted microbrewers producing fewer than 200,000 barrels from the tax increase, a threshold no member of her guild exceeds, she said: “If they’re taking us out of the bill, then we don’t really need to be in the argument.”

Weaks said there was a chance an alcohol increase would pass. “I don’t think it will be 25 cents and it will not be as low as what was sent to the governor last year,” he said.

Dr. Teixeira hopes lawmakers do more to reduce the number of patients with alcohol-related diseases he and his colleagues have to treat. “I’m just dealing with the disastrous end results, but I’ve never heard anyone say there’s too many substance-related resources in the state of New Mexico,” he said.

As for a larger alcohol tax, he offered his full-throated support. “It makes obvious sense to me and I’d happily pay it.”

Trip Jennings contributed reporting for this story.

This story was originally published in New Mexico In Depth and is republished here with permission.