Alcohol tax hike floated as fix for state budget crisis

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ALBUQUERQUE, N.M. (KRQE) – With the state facing a massive budget shortfall, some are looking to upping taxes on liquor to help solve the problem.

The group Alcohol Taxes Save Lives and Money is pitching a quarter per drink increase in the state liquor tax for all alcoholic drinks.

That would mean a six pack of beer would cost $1.50 more at the store.

It’s an idea supporters estimate would raise $150 million a year in additional revenue at a time when the state is hundreds of millions of dollars short.

It’s a proposal Sen. Jerry Ortiz y Pino, D-Albuquerque, is fully on board with. One of the reasons he says he likes the idea is that it helps pay for the costs of alcohol the state incurs.

“Alcohol costs us a fortune,” Ortiz y Pino said. “The health problems that alcohol causes… the crime that alcohol has a hand in… the deaths caused by drunk driving.”

According to a survey conducted by polling firm Research and Polling, the majority of state voters support the proposal, with 51 percent in strong support.

“For the average New Mexican, increasing the liquor tax would not really have that big an impact on their overall family budget,” Ortiz y Pino said. “The statistics show the bulk of the tax is paid by a small percentage of very heavy users of alcohol.”

If alcohol use declines, supporters of the proposal see that as an additional benefit that would save the state money.

This idea has been tried before in recent years without success. Gov. Bill Richardson proposed an increase in 2004, but strong opposition from the liquor lobby led to the idea failing to pass. In 2010, Rep. Brian Egolf, D-Santa Fe, launched another effort, a dime a drink increase, but that also went down in defeat.

Nob Hill Bar & Grill owner Nicole Kapnison says it would likely have to eat the cost of any tax increase on alcohol instead of upping prices customers would see.

“Essentially it’s just going to drive more businesses out of business in New Mexico and it’s already so hard to do business here as it is,” said Kapnison.

Opposition from both the alcohol and restaurant industries and Governor Susana Martinez, R-New Mexico, could prove problematic for the idea this time around.

“Governor Martinez isn’t going to raise taxes; she believes we can solve our budget challenges by making tough decisions and tightening state government’s belt,” said governor’s spokesperson Michael Lonergan in response to KRQE News 13 questions about a liquor tax hike. “Taking the easy way out by raising taxes is nothing more than the Washington way, and that’s a route she isn’t going to take.”

“Without her support, I think the chances are very very slim,” said Ortiz y Pino.

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