Is raising taxes the right strategy to curb tobacco and alcohol use in NM?
Bills are heading to the legislature that would raise taxes on alcohol and tobacco. Advocates say the higher prices, and the prevention campaigns they’ll fund, will help curb use in a state that struggles with alcoholism and teen nicotine use.
But some lawmakers pushed back on that assumption in a hearing of the Revenue Stabilization & Tax Policy Committee Tuesday.
The alcohol bill, sponsored by Sen. Antoinette Sedillo Lopez, would raise the variable taxes on liquor, wine and beer, to a flat $0.25 per drink — a 1.5-ounce shot of liquor, a five-ounce glass of wine or 12 ounces of beer.
That’s up from a $1.60 tax per liter of liquor, $.45 per liter of wine and $.41 per gallon of beer, except when produced by smaller local outfits, when the tax is lower.
The current $0.41 cent tax on a gallon of beer would jump to an equivalent $2.60.
“A significant increase is what causes a deterrent to drinking,” she told her colleagues. “And that’s what we want to do, is reduce consumption.”
A similar bill aims to double the cigarette tax to $4 per pack and impose a comparable 71% tax on the wholesale price of vaping products. Unlike with alcohol, where about half of the tax revenue goes toward curbing use, none of the additional tobacco dollars are earmarked for prevention.
Committee member Republican Sen. Craig Brandt took issue with any of the funds from either tax going into the state general fund.
“If we’re going to tax these kinds of products — we call them ‘sin taxes’ — then it needs to go to preventing or to dealing with the repercussions of the sin we are taxing,” he told the presenters.
Advocates presenting the bill argued that studies show raising the cost of nicotine products alone contributes to prevention, especially among teens. Democratic Rep. Micaela Lara Cadena wasn’t buying it.
“Young people know what’s happening here, and they’re also living through trauma, complexity, and making decisions that are much more muddled than what it takes for them to pay for whatever substance they’re using,” she said.
She added that the tax would disproportionately target people with low incomes and those coping with addiction.
Still, Cadena argued that before the state throws more funds at existing prevention efforts, or raises taxes as a means in and of itself, it needs to address the root causes of substance use.
“More money is not going to save New Mexicans,” she said. “We need to drastically rethink how we’ve approached these issues and start from a place of respecting New Mexicans.”
Sedillo Lopez, speaking on behalf of the tobacco bill sponsors, invited Cadena to be part of the discussion about how the money would best be spent as the bill moves through the legislature next month.
The Your New Mexico Government project is a collaboration between KUNM and New Mexico PBS with support from the Thornburg Foundation.