New Mexico In Depth reporter Bella Davis joined Executive Director Trip Jennings and Managing Editor Marjorie Childress on Tuesday for a chat about the 2024 legislative session, which ended Feb. 15.
Childress began by reminding everyone that all bills passed by the Legislature are still subject to vetoes from Gov. Michelle Lujan Grisham. Jennings added that the $10.2 billion dollar state budget and $1 billion dollar capital outlay legislation are subject to line item vetoes. That’s because they appropriate money and the state constitution gives a governor the power to eliminate words, passages and individual appropriations in any bill that spends state money.
The audience asked what New Mexico In Depth was least happy about coming out of the session. “I’m upset that I don’t know more about how much money lobbyists spend on lawmakers,” Jennings said.
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.
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.
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.
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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.
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.
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.
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.
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.
A bill that would raise state alcohol taxes for the first time in 30 years is in the hands of Democrats, who have a firm hold on both legislative chambers. But a major obstacle to passing the legislation is the concern voiced by some of their members about how an alcohol tax hike would affect low-income New Mexicans.
In an interim legislative meeting In October, Rep. Susan Herrera, a Democrat whose district in northern New Mexico has a higher share of residents in poverty than the state, said she refers to levies on alcohol and tobacco as ‘poor man’s taxes’ rather than as ‘sin taxes’.
“Not that I think poor people sin more than rich people,” she said, prompting laughter from her colleagues, “I just think they pay more for their sins.”
Paul Gessing, president of the local free market think tank The Rio Grande Foundation, testified to lawmakers that a tax on alcohol is regressive. Business interests and conservatives are making the argument, too. On Monday as the House Taxation and Revenue Committee discussed House Bill 230, which would raise state alcohol taxes to a quarter a drink, Sam DeWitt of the national Brewers Association tarred the proposal as “regressive.” So did Paul Gessing, president of the local free market think tank The Rio Grande Foundation, and Adam Hoffer of the Washington, D.C.-based Tax Foundation.
Sen. Antoinette Sedillo-Lopez, a Democrat representing the south side of Albuquerque who is sponsoring companion legislation, insisted the measure is meant to improve the health of lower-income New Mexicans, not to impoverish them. “This bill is about changing behavior.”
Alcohol taxes are regressive by definition, according to former state tax policy director Kelly O’Donnell, at least from a technical standpoint.