Rift between Democrats dooms this year’s alcohol tax push

The push to change the state’s taxes on alcohol all but ended Friday when the House Taxation & Revenue Committee voted down one bill and declined to take action on another. Chairman Rep. Derrick Lente, D-Sandia Pueblo, encouraged the bills’ sponsors to re-work their proposals in the coming months. But with no other measures advancing to address the state’s worst-in-the-nation rate of alcohol-related deaths, the Legislature kicked the can down the road on one of the state’s leading public health crises. Unlike last year, when an effort to raise alcohol taxes provoked vociferous opposition by beverage makers and retailers, dooming the proposal, the most important fissure this year was within the group supporting changes in alcohol taxes. In deliberations that stretched over two days, the tax committee considered divergent proposals.

Once skeptical, key lawmakers propose new approach to raising alcohol taxes

Two key state representatives who helped water down an alcohol tax hike last session have introduced legislation to raise taxes on most alcoholic beverages. The proposals from representatives Derrick Lente, D-Sandia, and Micaela Lara Cadena, D-Mesilla, the top lawmakers on the powerful House Taxation and Revenue Committee, could signal growing support among Democratic lawmakers to increase the price of a commodity that kills thousands of New Mexicans each year. But disagreements remain about how to do it, and by how much. The legislators filed a pair of bills that each offer its own approach but would both effectively tax alcoholic beverages a percentage of their price. For most alcohol, House Bill 212 would tax wholesalers on the products they sell to retailers — 6% for beer, 9% for wine, and 12% for spirits, with lower rates for alcohol made by small producers.

New Mexico recorded second deadliest year for alcohol deaths in 2022

Alcohol killed more than 2,000 New Mexicans in 2022, according to new data from the Department of Health, the third straight year the state exceeded that grim threshold. 

Although New Mexico has long suffered the nation’s highest rate of alcohol-related deaths, the crisis has often been overshadowed by the state’s other problems, such as  gun violence, an issue Gov. Michelle Lujan Grisham spotlighted last week in her State of the State address. She made no mention of alcohol, however. In recent years, deaths by drink in New Mexico have outstripped deaths by bullets nearly four to one. Arriving as the state’s 30-day legislative session gets underway, the alcohol mortality data underscored the enormous stakes of debates about New Mexico’s drinking problem, which policymakers have clashed over in previous years but largely failed to address, even as the crisis worsened. The number of alcohol-related deaths in 2022 was 28% higher than 2018, the year Lujan Grisham was first elected governor.

The secret sauce of the alcohol industry’s statehouse success

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A new report brings into focus the insidious nature of alcohol industry lobbying at the New Mexico statehouse. “Still Under the Influence: A Look at the Alcohol Industry and Its Influence on New Mexico Elected Officials,” by Common Cause New Mexico, underlines the entrenched power of the industry. Sadly, 20 years after the good government group issued a similar report about alcohol, New Mexico leads the country with the highest alcohol-related death rate.

Governor sidesteps straight talk about alcohol vetoes

More than a month after Gov. Michelle Lujan Grisham vetoed tentative steps that state legislators had taken to address New Mexico’s worst-in-the-nation rate of alcohol-related deaths, her office offered rationales that don’t square with her actions. The governor vetoed the first increase in alcohol tax rates in 30 years but she does not oppose increasing alcohol taxes, her spokesperson Maddy Hayden emailed New Mexico In Depth. The one-penny increase — watered down from a proposed hike of a quarter-per-drink—“would not have a material effect on alcohol prevention and treatment,” Hayden added, declining to say whether the governor supported a larger hike. The governor also vetoed a measure that would have directed tens of millions of dollars of existing alcohol tax revenues to alcohol treatment and prevention but she “believes unequivocally” that New Mexico needs to devote more resources to addressing alcohol misuse, according to Hayden. The governor felt the Legislature’s tax package represented “a potentially untenable hit to the general fund” and vetoed the reallocation of alcohol tax revenues “out of fiscal responsibility,” Hayden said, declining to clarify why the governor didn’t then retain the alcohol tax hike, which would have generated $10 million annually. 

The vetoes continue to puzzle and disappoint Democratic legislators and senior members of her own administration.

Lujan Grisham axes tax increase on booze

Gov. Michelle Lujan Grisham on Friday struck down the first alcohol tax increase in 30 years meant to address a public health crisis that claims thousands of New Mexican lives a year.Lujan Grisham’s veto came as a surprise to state lawmakers. During weeks of negotiations with the governor’s office and each other during the legislative session, lawmakers had shaped a $1.1 billion tax package only to learn that she had liberally crossed through line after line in the 119-page bill.The decision to eliminate the alcohol tax, in particular, contradicted the rhetoric coming out of the governor’s office this week leading up to the vetoes. 

Lujan Grisham sounded the alarm about the potential for the tax package to undermine the state’s long-term financial health. The proposed tax cuts represented future dollars the state would not collect, which some pointed to as a risk given the state’s volatile revenue stream. New Mexico is overly dependent on the boom and bust cycles of the oil and gas industry.However, the nominal increase to the state alcohol excise tax — less than 1 cent on a 12 ounce beer and about one and a half cents per servings of wine and liquor — would have generated roughly $10 million a year. 

The tax bill would have directed those dollars as well as about $25 million in money that currently goes to the state’s general fund to a new Alcohol Harms Alleviation fund for treatment. 

Unclear is why the governor didn’t eliminate the harm alleviation fund in the tax bill, while keeping the tax increase, given her concerns over shoring up the state’s revenues. 

Among those stunned by the governor’s decision Friday was Sen. Antoinette Sedillo Lopez, D-Albuquerque, a co-sponsor of the proposal to increase the state alcohol tax.“I would expect an increase in alcohol excise tax would be welcome in light of the harm to the communities and cost to the state due to alcohol,” Sedillo Lopez said Friday afternoon.Maddy Hayden, the governor’s spokeswoman, declined to say why Lujan Grisham had vetoed the alcohol excise tax increase when it would have put dollars into New Mexico’s coffers.She did say, however, “The governor spoke at length to the media (Friday) about the continued need for dedicated resources to address alcohol misuse. As you know, she recommended creating an office at the Department of Health dedicated to alcohol misuse and the budget as signed includes $2 million for that purpose.”Hayden was referring to a Friday afternoon press conference Lujan Grisham held in Santa Fe.In 2021, alcohol killed 2,274 New Mexicans in 2021, at a rate no other state comes close to touching.

How a 25¢-per-drink alcohol tax fell apart

The Santa Fe New Mexican chronicled how efforts to increase taxes on alcohol over the past 30 years have hit a brick wall at the Roundhouse. Lawmakers budged in 2023, raising the tax per drink by a penny — far short of a 25 cent proposal. Illustration by Marjorie Childress. Ever seen someone make a quarter disappear? You did if you watched this year’s legislative session, where advocates seeking to stem the state’s tide of alcohol-related deaths proposed a 25¢-per-drink tax — and lawmakers shrank it down to hardly a penny.

Lawmakers water down alcohol proposals amid public health crisis

ALBUQUERQUE, NEW MEXICO – JUNE 26, 2022: The alcohol department at a grocery store Albuquerque, NM on June 26, 2022. CREDIT: Adria Malcolm for New Mexico In Depth

The alcohol industry notched a victory Saturday as the Legislature approved an alcohol tax hike of less than a penny-a-drink on beer and hardly more than that for liquor and wine, a fraction of the 18- to 20-cents public health advocates pushed for in this year’s session. 

Lawmakers also rejected a $5 million request from the Department of Health for a new Office of Alcohol Prevention, despite the state’s historic budget surplus. A DOH spokesperson said its epidemiology division would create a smaller version of the office anyway, using an additional $2 million lawmakers added to the agency’s budget. 

Public health experts say the tax increase is so small that it’s unlikely to have any effect on excess drinking, let alone tackle New Mexico’s worst–in-the-nation rate of alcohol-related deaths. The chair of the House tax committee, Rep. Derrick Lente, D-Sandia Pueblo, who had rejected a compromise 5¢-per-drink proposal passed by his counterparts in the Senate, acknowledged the final increase was minor on the floor of the House of Representatives on Saturday morning. “If we want to call it minimal, we can call it minimal,” he said.

Senate committee passes nickel-per-drink increase in alcohol taxes

On Wednesday, a Senate committee amended a tax package passed by the House earlier this week to hike alcohol taxes 5¢ per drink for beer, wine, and spirits, greater than the 1¢ to 2¢ increase included in the original proposal. The hike, larger than opponents had wanted but smaller than supporters had hoped for, would be the first in 30 years. 

Research has shown that making alcohol costlier is a way to reduce excess drinking, and supporters argued that a significant tax increase is necessary to combat the state’s alcohol crisis. New Mexicans die of alcohol-related causes at nearly three times the national rate and alcohol is involved in more than twice the deaths statewide as are fentanyl, heroin, and methamphetamines combined. New Mexico’s alcohol taxes do not adjust with inflation and have lost much of their real value since lawmakers last raised them. The 5¢ increase, approved by the Senate Tax, Business and Transportation committee, would bring taxes on wine and spirits back to the real value they had in 2000.

Powerhouse lobbyists on tap for alcohol industry

ALBUQUERQUE, NEW MEXICO: The alcohol department at an Albuquerque grocery store. CREDIT: Adria Malcolm for New Mexico In Depth

A proposal to raise New Mexico’s alcohol tax to a flat 25-cents per drink in a bid to curb the state’s exceptionally high rate of alcohol-induced deaths has disappeared behind closed doors. 

Both House Bill 230 and its companion in the Senate were tabled by their respective tax committees, leaving them in legislative limbo, even while lawmakers said they’d be considered for inclusion in a larger tax bill in the late hours of the session. 

From the start, the legislation faced a rocky path. In a year when the state is swimming in oil and gas money, opponents questioned raising alcohol taxes at all, even if public health experts say the primary reason to do so in this case is not to raise revenue but to hike the price of excess drinking in order to deter it. Others wondered if the bill would hurt small brewers, distilleries and wineries or would impoverish low-income New Mexicans who don’t cut back on drinking.But another factor weighs on the measure: the alcohol industry itself and the lobbyists it employs to make its case. They have attended every hearing, sometimes muddying the discussion about whether raising alcohol taxes can save lives, as most scientific evidence suggests.