Insufficient Alcohol Tax Increase Prioritised Over People’s Health
A multi-year effort to ensure evidence-based and fair alcohol taxation in New Mexico to support alcohol prevention and treatment was derailed by legislators with ties to the alcohol industry, reports TaoNews and Source NM. Instead of a meaningful alcohol tax increase rooted in science that would prevent and reduce alcohol harm, lawmakers inserted an industry-backed minimal tax hike that will have little to no impact on alcohol consumption and its related harms in New Mexico. This exposes the undue influence of alcohol lobbyists in shaping public policy – not in the public’s interest but in the profit interest of Big Alcohol.
Alcohol Industry Weakens Evidence-Based Policy
New Mexico has the highest rate of deaths due to alcohol in the United States. Nearly 2,000 lives are lost each year due to alcohol.
Research consistently shows that increasing alcohol taxes is an effective health promotion strategy. Raising alcohol taxes reduces overall alcohol consumption, delays youth initiation, and lowers rates of alcohol use disorder.
At the start of the legislative session, public health advocates were optimistic about House Bill 417 (H.B. 417), which proposed maintaining the current alcohol excise tax (4–7 cents per unit, depending on alcohol type) while adding a new 6% tax on alcohol’s retail price. This tax structure would have ensured that costlier alcohol contributed more revenue for health promotion and treatment programs while maintaining rates on lower-priced products.
However, lawmakers with direct financial ties to the alcohol industry helped kill H.B. 417. The alcohol industry and its lobbyists spend heavily on New Mexico politics.
According to Source NM, from 2021 to 2024, alcohol lobbyists directed over $1 million to legislators through campaign contributions, meals, and gifts.
Recipients of some of the largest “contributions” were Representatives Patti Lundstrom and Doreen Gallegos.
Ms. Lundstrom received at least $21,965, while Ms. Gallegos accepted at least $27,242. Notably, Gallegos’ husband is a long-time alcohol industry lobbyist who has fought against alcohol tax increases for years.
Evidence from the World Health Organisation (WHO) confirms that well-designed alcohol taxation policies are the most effective way to prevent and reduce harm due to alcohol.
Public Health Policy Stalled, Industry-Friendly Bill Passed
Despite early momentum, the alcohol tax bill was sent back to the tax committee, where Ms. Lundstrom and Ms. Gallegos joined Republican legislators to block it. The final vote tied 6–6, effectively killing the bill.
With the public health-focused bill dead, lawmakers instead passed a substitute measure that included an alcohol tax hike so minimal that, after adjusting for inflation, it does not even restore alcohol tax rates to their 2020 levels.
According to Source NM, the increase amounts to less than a penny per unit for beer and slightly more for wine and liquor. This version, co-sponsored by legislators aligned with the alcohol industry, will raise just $9 million annually, far less than the $46 million projected under the original proposal.
This means that alcohol industry lobbying and lawmakers doing the dirty work for the alcohol industry causes a potential loss of $37 million per year – much needed funds to address New Mexico’s alcohol burden.
The interference of the alcohol industry in public policy-making is a global issue. Movendi International has documented more than hundred stories of alcohol industry lobbying against alcohol taxation, worldwide.
Consequences of a Meager Tax Increase
Alcohol policy advocates warn that this meaningless increase will not reduce alcohol use or address related harms. Research shows that meaningful alcohol tax increases are effective in lowering population-level alcohol consumption, preventing deaths and reducing public costs. The minimal tax increase adopted in New Mexico will have negligible effects.
The Struggle for Better Alcohol Policy Continues
Public health advocates, including Sindy Sacoman of the New Mexico Tribal Behavioral Health Providers Association, expressed frustration over the outcome, as per Source NM reporting. Sacoman emphasised that passing a tax increase too small to have an impact could undermine future efforts by allowing critics to claim alcohol taxes are ineffective.
Despite this setback, the coalition pushing for alcohol prevention through taxation has vowed to return next year with a renewed effort. The movement for modern, evidence-based alcohol policy extends beyond New Mexico, with communities across the U.S. watching closely.
Governor Michelle Lujan Grisham previously vetoed an identical penny-a-unit tax increase in 2023, stating that it would have no “material effect on alcohol prevention and treatment.” According to Source NM, it remains unclear if she will take a different stance this time.
New Mexico’s legislative session demonstrated yet again the extent of alcohol industry capture of state legislatures. Lawmakers prioritised alcohol industry profits over people’s health, undermining efforts to prevent alcohol-related deaths. Fair alcohol taxation remains a critical tool in preventing harm due to alcohol, but as this case shows, achieving meaningful reform requires overcoming well-funded industry interference.
Sources
Source New Mexico: “After House legislators with alcohol ties snuff out tax hike, senators sub an industry-approved bill“
Taos News: “Senators sobered by meager alcohol tax hike bill“