Legislators review alcohol tax increase
October 31, 2019
CASPER — State lawmakers are considering a slight tax increase on alcohol sales in Wyoming in an effort to raise nearly $2 million in funding for treatment programs across the state.
The proposed tax increase – which would be the state’s first such increase since Prohibition – would essentially double minuscule taxes already imposed on beer, hard liquor and wine in Wyoming through July 1, 2024.
These taxes are paid on top of the state’s existing sales taxes, an amount which, according to a 2007 issue brief from the Legislative Service Office, bear out to just pennies on the dollar. According to that issue brief, Wyoming’s taxes currently amount to roughly 2 cents per gallon of beer, 28 cents per gallon of wine and 95 cents per gallon of hard liquor.
Historically, there has been little appetite to increase taxes on alcohol, said Sen. Charlie Scott, the bill’s main booster and the Republican co-chairman of the Joint Committee on Labor, Health and Social Services, which will discuss the proposal at its meeting in Cheyenne later this week.
Using alcohol and tobacco taxes to fund substance abuse treatment has been discussed as recently as the 2017 legislative session. However, the prospect of vice-based – or “sin taxes” – have never been popular with lawmakers, even as recent polling shows a majority of Wyomingites are in favor of increasing such taxes.
The economic imperative is significant as well: according to a 2010 study by the University of Wyoming, alcohol abuse alone cost Wyoming more than $843 million that year due to lost productivity, health care costs and criminal activity: a significant number to consider as revenue continues to decline statewide.
Over the past 20 years, everything from optional municipal taxes on alcohol to help fund government to creating an earmark to pay for substance abuse treatment have been considered and, ultimately, squashed by the Legislature. When Scott sponsored a similar bill of his own roughly two decades ago, he experienced a similar result.
“It got defeated on the idea that it was a tax on the working man,” Scott said. “I think that’s an awful stereotype. It’s a tax on people who choose to drink that are running the risk of needing professional help to deal with it. It’s not a large risk, but they are running that risk. So why shouldn’t they pay for it?”
Though unpopular in recent years, the concept could potentially see some movement this year, Scott said. Backed by Management Council, this year’s alcohol tax proposal has a sunset date of 2024 – an olive branch to a Joint Appropriations Committee often leery of writing earmarks into the budget.
What also matters is where the money is going: The revenues generated by the bill will be split half-and-half with the Department of Health and the Department of Corrections, which is currently the focus of a state-led effort to increase prisoner recidivism rates below 25 percent within the next four years as part of a larger criminal justice reform package signed into law last year by Gov. Mark Gordon.
Getting the tax passed, Scott said, is a key element to continuing this process, particularly considering alcohol was a factor in approximately 57 percent of all custodial arrests in Wyoming, according to a 2018 study from the Wyoming Department of Health.
On the committee’s agenda this Wednesday is a bill that, if passed, would require the Department of Health and the Department of Corrections to work together to reduce recidivism by improving mental health and substance use programming – an effort that would be directly aided by the $1.9 million in funding the tax increase is estimated to raise.
Facing a tough budget process in 2020, when the focus is expected to be about cutting funding – not adding more – Scott said the answer to financing those programs is simple: make them self-funding.
“It’s a tax to me that makes a lot of sense,” said Scott. “And if we don’t do it, I’m afraid we won’t get the problem dealt with.”