Anchorage, USA: Local Alcohol Tax Makes Economic Sense
Local alcohol tax in Anchorage, USA makes economic sense as it reduces the health, social and economic burden of alcohol harm.
Out of the two local alcohol tax proposals which were in discussion, the Anchorage Assembly members have advanced the 5% alcohol tax increase to be voted on by Anchorage voters in the ballot of the April 7, 2020 Municipal Election.
As Movendi International previously reported the 5% tax increase is estimated to raise between $11 million to $15 million in revenue. Based on a $11.8 million estimate, the revenue is to be spent as follows:
- The largest amount, $4.5 million would go to substance use prevention, treatment programs and assistance for the homeless – $2 million for treatment centres and just over $2.5 million for shelters;
- $4.1 million would go to public safety – $1.7 million to fund 6 new police officer positions and 9 non-sworn support positions for the police department. $700,000 for additional prosecutors and public defenders and $1.7 million is for firefighter/paramedics and mental health clinicians;
- $3.1 million would be spent on preventing child abuse, sexual assault and domestic violence – to be given in the form of grants, with half going to early education grants and half going to abuse prevention providers.
The 5% alcohol tax increase was in the municipal election last year as well. Unfortunately it was voted down due to Big Alcohol influence over the voter base. However, this year’s bill is more improved as Felix Rivera, one of the tax’s authors says. This version sends funds to a few specific places as mentioned above.
The police and fire departments have showed support for the new taxes as some of the revenue will fund much needed new positions in these sectors. For example the tax revenue would help fund the Anchorage Fire Department CORE team who deals with high-frequency users of the city’s emergency services. Currently there is one person in the team and it was found to save taxpayers $500,000 annually by reducing stress on the system.
Economic impact of alcohol harm
The tax increase makes sense when considering the cost of alcohol problems. The McDowell Group reports alcohol problems and related expenses tally up to nearly $2.4 billion per year in Alaska, which is more than $3,200 per resident. It’s a tab all citizens are picking up right now, through taxes or lost economic productivity.
The argument that the tax hike will hurt small businesses is also inaccurate. According to the Anchorage Daily News, many businesses actually suffer from the cost of alcohol problems. For example these businesses have to hire extra security and absorb the lost productivity of absentee employees due to alcohol issues. A failure to address the alcohol burden only harms the economy and the business climate in Anchorage.
Despite the positive outcomes for health and economy, Big Alcohol is opposed to the proposed tax. The alcohol industry lobby front group in Alaska called “Alaskans Against Unfair Alcohol Taxes” is aggressively fighting against the tax. The largest contributors for this campaign include Alaska Beer, Wine, and Spirits Wholesalers Association, CHARR (the hospitality industry in the state of Alaska), and the US Distilled Spirits Council (DISCUS). They have to date raised $414,313 for the campaign.
Fortunately, there are groups in support of the tax increase. Yes for a Safe, Healthy Anchorage, has raised $204,270.00, with their top contributors being the Alaska Children’s Trust, Recover Alaska, and Providence Health and Services Alaska.
This ballot initiative promises to direct dedicated resources to long-neglected public health and safety needs, which is good for the people, economy and the city of Anchorage.
Now it is in the hands of the voters in Anchorage to take a positive decision towards preventing and reducing alcohol harm in the country.
*This article was edited on the 13th of April 2020 according to new information from KTUU.