Treatment advocates support increased taxation on alcohol: Retailers say industry is already overly targeted
Posted on Sunday, November 30, 2008
As advocates for substance abuse treatment plead for new money to treat Arkansans addicted to drugs and alcohol, the idea of an added tax on alcohol will become an issue for state lawmakers to decide.
The proposal isn’t likely to go down smoothly, at least if those in the business of selling alcohol have anything to say about it.
Representatives of Northwest Arkansas’ Project Right Choice recently voiced support for adding a statewide 5-percent tax on alcohol to fund more substance abuse treatment for those who cannot afford the high costs themselves.
“Our objective is to help people understand there’s a great need,” Judy Cohea, fiscal officer for the Fayetteville Police Department and secretary of Project Right Choice, said.
State Sen. Bill Pritchard of Elkins, who is chairman of the Legislative Task Force on Substance Abuse Treatment Services, recently told the Arkansas Legislative Council that only 17,500 of 250,000 people who need treatment get it.
The task force argues that money spent on substance abuse treatment helps reduce expenses in other state budgets — keeping people out of prisons, for example. The group estimated that drug addiction costs state agencies $349 million annually.
State funding for substance abuse treatment has been at the same levels — about $13 million — for more than a decade, according to the task force.
Cohea said Project Right Choice isn’t specifically involved in determining the mechanism for raising new money for treatment, but the group recognizes a dire need for more treatment.
“The message we have been helping to present is the need for treatment, and the [limited] amount of treatment that is available to people in the state of Arkansas,” she said. “The waiting list is long.”
The business owners who sell alcohol do not dispute the need for more treatment services for people addicted to drugs or alcohol, but they do disagree that taxing alcohol more is the answer.
Kent Starr, the owner of Liquor World on College Avenue in Fayetteville who is active in the Arkansas Beverage Retailers Association, said he’s skeptical lawmakers will be in the mood to approve any new taxes in the current economic climate, but in any case, added onto existing taxes on alcohol would be excessive.
“Every legislative session they take aim at a number of industries that they feel like are just easy pickings,” Starr said. “This industry already pays an inordinate amount of taxes. I don’t feel an additional tax on alcohol is the answer.”
Starr said stores like his that are relatively close to the state’s borders are hurt by added taxes because shoppers don’t mind going to another state if they can buy for less.
“You actually end up hurting our tax base because you’re not keeping Arkansas tax dollars in the state,” Starr said.
Charles Singleton, a Little Rock attorney who has represented the Arkansas Wine and Spirits Wholesalers for more than 20 years, said his clients and their customers should not independently shoulder the burden of paying for more substance abuse treatment.
“There are people who abuse alcohol out there,” Singleton said. “My clients wish that wasn’t the case, but it is. We feel like that’s a minor portion of what they consider substance abuse.”
Methamphetamine, cocaine and other illicit drugs create much of the need for substance abuse services, Singleton said, but alcohol is targeted for taxation because it’s the only item Arkansas already regulates and taxes.
The wholesalers believe substance abuse treatment advocates should compete for general state revenue just like most parts of state government rather than proposing an earmarked tax that lasts forever.
“We know it’s a worthy project,” Singleton said of treatment programs. “We know there’s a need there. But the state prioritizes those worthy projects every legislative session and [advocates] need to see if they can go get that funding from general revenues.”
Singleton said the price paid for a typical bottle of liquor in Arkansas is about 40 percent taxes. Taxes paid on mixed drinks purchased at restaurants and bars in some cities can reach 50 percent of the consumer’s cost, he said.
“Our position is there’s plenty of tax,” he said.
Treatment advocates and the retailers and wholesalers said they are aware of lawmakers fashioning tax proposals to fund substance abuse treatment, but none had yet seen any drafts of the proposed bills. Bills to impose a 5 percent tax on alcohol, or on limited kinds of alcoholic beverages, were considered in the last legislative session but were not approved.
Calls to State Sen. Hank Wilkins, D-Pine Bluff, who proposed a 5 percent tax on liquor and wine in the 2007 session to fund domestic abuse prevention and substance abuse treatment programs, were not returned.
Some information for this story was contributed by the Arkansas Democrat-Gazette.
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