E-Malt.com News article: USA: Money from beer taxes increase is going to alcoholism treatment programs

Looking to generate more money for alcoholism treatment programs, one state representative is suggesting increasing the tax on beer, The Providence Journal published February 9

The need for treatment programs exceeds the slots available, but increasing the programs’ budget is a tough sell for lawmakers, who will probably need to make major cuts to balance the budget this year. So Rep. Edwin R. Pacheco, D-Burrillville, is looking at the tax side of the equation instead.

“We’re looking for areas that aren’t going to be a burden for everyday Rhode Islanders,” Pacheco said.

He’s proposing to double the current tax rate — $3 on every 31 gallons of beer — and devote the entire additional amount to treatment programs.

Pacheco said he focused on beer specifically because it’s commonly bought illegally by underage drinkers, and a price increase would help deter underage drinking and binge drinking among college students.

Pacheco’s bill has the backing of the Drug and Alcohol Treatment Association of Rhode Island, and he spoke at that organization’s policy breakfast this week.

George Hacker, director of the Alcohol Policies Project at the Washington-based Center for Science in the Public Interest, also spoke at the breakfast. “Raising alcohol taxes in order to raise prices is a powerful means of reducing underage drinking, reducing heavy and frequent drinking among young people, reducing transmission of venereal diseases, improving educational outcomes,” Hacker said in an interview. “There are a whole range of studies that link this policy measure to beneficial changes.”

Robert Goldberg, lobbyist for the United Independent Liquor Retailers of Rhode Island, said he’s all for funding alcoholism treatment programs, but believes the tax should be distributed across all Rhode Islanders, not paid solely by those who buy beer.

“Alcoholism is a disease like any other disease,” Goldberg said. “The tax for treatment shouldn’t be placed on a small number of people.”

Rep. Jan P. Malik, D-Warren, won’t be able to vote on the bill — he owns Malik’s Liquors in Warren. But he was more than willing to comment on it. “We’re already at a disadvantage to Massachusetts,” which has no sales tax on alcoholic beverages, Malik said. (Rhode Island charges 7 percent.) “Why are we going to put ourselves at a bigger disadvantage?” he asked.

While the bill would affect a tax on distributors, those involved said it would be passed along to retailers and, ultimately, consumers.

The state hasn’t raised taxes on alcoholic beverages since 1989, the bill’s backers say. Since the tax is computed as a dollar amount, rather than a percentage, the tax has actually decreased over the years when inflation is factored in.

The bill, as written, would apply only to the beer manufacturing tax, which brings in a minuscule amount of revenue compared to the tax on beverages imported across state lines or internationally. The Division of Taxation could not provide numbers yesterday for tax revenue generated by beer alone, but for all types of alcohol, the manufacturing tax brought in less than $28,000 in fiscal 2006 and the import tax brought in $10.7 million.

Pacheco said he intended to increase the import tax, as well as the manufacturing tax, and will amend the bill to reflect that.

House Finance Committee Chairman Steven M. Costantino, D-Providence, said he would give Pacheco’s bill “serious consideration.”

The bill ties in with the desire legislative leaders have expressed to look at the systemic reasons behind the growth in the state’s prison population, which continues to set records.

A.T. Wall, director of the state Department of Corrections, testified at a hearing last month that 73 percent of female inmates in Rhode Island said alcohol or drugs contributed to their criminal behavior and 70 percent of male inmates reported having “significant” problems with drugs or alcohol.

With the cost of treatment much lower than the $39,000 it costs taxpayers, on average, to incarcerate one person for a year, lawmakers are looking for ways to identify inmates with substance abuse problems and move them into treatment.

“If we can reduce the prison population by funding substance abuse treatment with this money, then it could actually save money,” said Costantino, who also attended the Drug and Alcohol Treatment Association breakfast.


10 February, 2007