Rep. Terese Berceau s Beer Tax Proposal

Transcription

1 Rep. Terese Berceau s Beer Tax Proposal

2 Wisconsin has a serious alcohol problem We lead the nation in moderate to heavy alcohol consumption among pregnant women We have the highest adult binge-drinking rate We have the second highest college student binge- drinking rate We have the 3 rd highest underage drinking rate in the country (26.17% between ages over a one month period) We rank 48th worst in the nation in alcohol-related per capita health care expenses In Wisconsin, alcohol and drug abuse is the 4 th leading cause of death,, behind heart disease, cancer and stroke 1) Report on the Findings of the Needs Assessment: Deliverable #3, FASD Prevention Initiative: Wisconsin Department of Health and Family Services, May 13, ) Wisconsin Epidemiological Profile on Alcohol and Other Drug Use, Wisconsin Department of Health Services, July ) Megan Twohey. (2005, February 23) Binge-drinking students follow in adults footsteps: [final edition]. Milwaukee Journal Sentinel, p. 01, retrieved April 28, ) Substance Estimates from the National Surveys on Drug Use and Health, U.S. Department of Health and Human Services, U.S. Substance Abuse and Mental Health Services Administration, )Factbook on State Beer Taxes, Center for Science in the Public Interest: Alcohol Policies Project, July )2002 Wisconsin Alcohol Traffic Facts Book, Wisconsin Department of Transportation

3 We drink and drive and die We are tied for 4 th (with Louisiana) for the highest percentage of driver fatalities in which blood alcohol concentrations exceed.08 Only North Dakota, South Carolina and Delaware are worse We are tied for 5 th for the highest percentage of driver fatalities in which blood alcohol concentrations exceed.01 and 41% of crash fatalities result from a BAC of.08 or higher Traffic Safety Facts 2007 Data: Alcohol, NHTSA s National Center for Statistics and Analysis, Washington, DC

4 Alcohol and Crime in Wisconsin 2007 Violations 35,659 OWIs 5,057 PACs 480 OWIs 38 OWIs 97 OWIs OWIs (Operating While Intoxicated) PACs (Prohibited Alcohol Content) OWIs Causing Injury OWIs Negligent Homicide OWIs in a Commercial Vehicle 41,331 Total (including 5 related charges) 2007 Fatalities and Injuries (last year for available statistics) 337 alcohol-related driving fatalities 5,552 alcohol-related driving injuries 337 5,552 Wisconsin Department of Transportation, Final Year Crash Statistics, 2007

5 What about underage drinking deaths? The National Safety Board and the Coalition to End Needless Death on our Roadways (a physician group) Fatal listed Wisconsin in 2006 among their Fatal Fifteen states with the highest underage drinking death rates Wisconsin is among 10 states on the list for the third consecutive year Ten states make deadly fatal fifteen list for three years straight, 11/06, END

6 In 2007, 41,435 Wisconsin teens and adults received publicly funded treatment for alcohol dependency or abuse Dept. of Health Services, Division of Mental Health and Substance Abuse Services, Bureau of Prevention, Treatment and Recovery

7 However, it is estimated that 457,000 Wisconsin residents who need alcohol treatment are not receiving it Dept. of Health Services, Division of Mental Health and Substance Abuse Services, Bureau of Prevention, Treatment and Recovery

8 Beer is the alcoholic drink most abused 60% of all beer is consumed in amounts of five or more drinks per day It is the drink most commonly consumed by people stopped for impaired driving or involved in alcohol-related crashes Beer accounts for 81% of all alcohol that is drunk in hazardous amounts in the U.S. 1) Greenfield, T.K. & Rogers, J.D. (1999). Who drinks most of the alcohol in the U.S.? The policy implications, Journal of Studies on Alcohol ) Rogers, J.D., Greenfield T.K. Beer drinking accounts for most of the hazardous alcohol consumption reported in the United States, Journal of Studies on Alcohol. 60(6): 732-9, ) Insurance Institute for Highway Safety. Q&A: Alcohol: General. Arlington, VA: National Highway Insurance Institute for Highway Safety, June 2003

9 According to the UW Police 41% of all academic problems stem from alcohol abuse 28% who drop out of school may do so because of alcohol 70% of violent behavior (fights, rapes) on campus results from alcohol abuse 59% of fatal falls are related to alcohol 50% of all traffic fatalities are related to alcohol 70% of attempted suicides are alcohol-related

10 Alcohol is directly related to rape 26% of the men who acknowledged committing sexual assault on a date reported being intoxicated at the time of the assault 26% 21% of the college women who experienced sexual aggression on a date were intoxicated at the time of the assault 21% 50% of sexual assaults involving college students are associated with alcohol use 97,000 college students were raped or sexually assaulted in 2001 as a result of alcohol use "Acquaintance Rape and Alcohol Consumption on College Campuses," by Antonia Abbey, PhD, Journal of American College Health. Vol. 39, January 1991 Alcohol-Related Sexual Assault: A Common Problem among College Students Antonia Abbey, Ph.D, citing Abbey et al. 1996a, 1998; Compenhaver and Brauerholz, 1991; Harrington and Leitenberg, 1994; Presley et al., 1997 Wasting the Best & Brightest: Substance Abuse at America s Colleges and Universities March 2007, CASA

11 Alcohol is increasingly tied to child abuse and domestic violence Adult alcohol abuse contributes to 50% of reported instances of marital violence and 35% to 70% of child abuse cases Another study shows that the percentage of batterers who are under the influence of alcohol when they assault their partners ranges from 48% to 87%, with most research indicating a 60% to 70% rate of alcohol abuse 92% of domestic abuse assailants reported use of alcohol or other drugs on the day of the assault An estimated 480,000 children are mistreated each year by a caretaker with alcohol or other drug problems Adger H Jr, Problems of alcohol and other drug use and abuse in adolescents, J Adolesc Health 1991; 12: The Relationship Between Parental Alcohol or Other Drug Problems & Child Maltreatment, National Committee to Prevent Child Abuse (312) Roberts, A. R. (1987). Psychosocial characteristics of batterers: A study of 234 men charged with domestic violence offenses. Journal of Family Violence, 2 (1), Bijur, P.E., M. Kurzon, M.D. Overpeck, and P.C. Scheidt Parental alcohol use, problem drinking and child injuries, Journal of the American Medical Association 23: Collaboration, coordination and cooperation: helping children affected by parental addiction and family violence. New York: Children of Alcoholics Foundation, Children of Alcoholics Foundation, Inc. 1996

12 How much beer does Wisconsin consume? Wisconsin ranks 5 th highest per-capita for alcohol consumption from beer The average Wisconsinite consumes 1.56 gallons of pure ethanol annually from beer N e v Only Nevada, New Hampshire, Louisiana and Montana rank higher Wisconsin ranks 4 th highest per-capita for alcohol consumption from all alcoholic beverages On average, Wisconsin residents consume 2.96 gallons of ethanol per person, per year Beaten only by New Hampshire, Nevada and Delaware National Institute on Alcohol Abuse and Alcoholism, Surveillance Report #85: Apparent Per Capita Alcohol Consumption: National, State, and Regional Trends, , November 2008

13 Is the beer industry innocent? For 2001 consumer expenditures for alcohol nationally (the last year for available data) % went to underage drinking ($22.5( billion) 20.1% went to adult pathological drinking ($25.8( billion) 37.8% of alcohol (by cost) was misused or illegally consumed A 1999 analysis showed that 50.1% (by volume) is misused or illegally consumed ($56.9( billion) The alcohol industry is financially dependent upon underage and pathological drinking 1) The Commercial Value of Underage and Pathological Drinking to the Alcohol Industry, The National Center on Addiction and Substance Abuse at Columbia University, May ) Alcohol consumption and expenditures for underage drinking and about excessive drinking, The National Center on Addiction and Substance Abuse at Columbia University, February 26, 2003

14 The Berceau Proposal Tax per Barrel Tax per Gallon Tax per Six-Pack Tax per 12 oz. Bottle Annual Revenue (in millions) Current $ $9.76 Proposed $ $48.8

15 What does the Berceau proposal mean in terms of the cost of a beer? The average price of a 12 oz. bottle of domestic beer in Wisconsin is $0.985 For a bottle of imported beer: $1.20 For a bottle of craft beer: $1.08 The Wisconsin beer tax accounts for price tax accounts for $0.006 of that The Berceau proposal would add only A 2.4% increase for a domestic beer A 2% increase for an imported beer A 2.2% increase for a craft beer 2.4 to each Scott Stenger, lobbyist for the Miller Brewing Company

16 What does this mean for the heavy drinker? Under the Current State Beer Tax: If you drink a six-pack a day by the end of the week you will have paid 25 in state tax Under Rep. Berceau s s Proposal: If you drink a six-pack a day by the end of the week it will cost you an additional $1

17 Beer tax revenue has dwindled The state beer tax has not been raised since 1969 the year that Neil Armstrong walked on the Moon It has lost 83% of its value due to inflation If adjusted for inflation, beer would be taxed at over $11.62 a barrel, instead of $2 currently Rep. Berceau s s proposed $8 increase per barrel would raise $40 million annually $40 Factbook on State Beer Taxes, Center for Science in the Public Interest, Alcohol Policies Project, August 2004

18 How much do we collect? Wisconsin residents pay about 3.6 per six-pack ($2.00( a barrel) The Wisconsin state beer tax raised $9.62 million in FY It s s estimated to raise only $10 million in FY & FY Wisconsin Legislative Fiscal Bureau, Informational Paper #8: Alcohol and Tobacco Taxes, January 2009

19 Wisconsin s s beer tax in context Wisconsin has the third lowest beer tax in the nation (6.5 per gallon) (Major beer producing state) Second Lowest: Missouri (6.0( 6.0 per gallon) (headquarters of Anheuser-Busch) Lowest: Wyoming (1.9( 1.9 per gallon) Wisconsin Legislative Fiscal Bureau, Informational Paper #8: Alcohol and Tobacco Taxes, January 2007

20 Our neighboring states charge two to three times more Illinois: 19 per gallon Minnesota: 15 Indiana: 12 Michigan: 20 Wisconsin Legislative Fiscal Bureau, Informational Paper #8: Alcohol and Tobacco Taxes, January 2009

21 Other states charge much more Alaska: $1.07 per gallon Hawaii: 93 South Carolina: 77 New Mexico: 41 Oklahoma: 40 Wisconsin Legislative Fiscal Bureau, Informational Paper #8: Alcohol and Tobacco Taxes, January 2009

22 Most beer produced in WI is not taxed at all! Wisconsin beer producers have two major tax breaks: Beer produced in Wisconsin that is exported elsewhere is exempt from the WI beer tax Producers that brew less than 300,000 barrels a year, pay only half of the tax on the first 50,000 barrels Wisconsin produced 12.1 million barrels of beer in 2008 We exported 9.5 million barrels (78.7%( 78.7%), all from WI taxation The remaining 2.6 million barrels were taxed, and consumed in-state So, only 21.3 % of the beer produced in Wisconsin was subject to the WI beer tax Only 19% was taxed at the 100% rate exempt Wisconsin Department of Revenue, 2009

23 Most Wisconsin beer producers pay only half of our tax Most Wisconsin beer producers pay only half of our tax There were 87 Wisconsin Beer Producers in were taxed at the 50% beer tax rate 4 were taxed at a combination of the 100% and 50% rate 5 were taxed entirely at the 100% rate The top four producers account for 91% of all revenue from in-state producers Wisconsin Department of Revenue, 2007

24 Most Wisconsin beer producers pay little in taxes Between $0-$100 $ breweries Between $100-$1,000 $1, breweries Between $1,000-$5,000 $5, breweries Between $5,000-$10,000 $10,000 2 breweries Between $10,000-$30,000 $30,000 5 breweries Between $30,000-$50,000 $50,000 0 breweries Between $50,000-$100,000 $100,000 0 brewery Between $100,000-$1,000,000 $1,000,000 4 breweries Over $1,000,000 2 brewery (Miller) Wisconsin Department of Revenue, 2007

25 How does the beer tax compare to other Wisconsin taxes and their increases?

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28 $0.25 $0.20 $0.15 $0.10 $0.05 $- Beer Tax Increases (per gallon) No increase in 40 years!

29 Quiz How many six-packs must be sold to produce the same state excise tax revenue generated by one carton of cigarettes? 492 After the most recent cigarette state tax increase to $1.77 per pack of cigarettes

30 Arguments against increasing the Wisconsin beer tax, and our responses

31 Argument 1 The beer tax is paid by those who consume beer regardless of their income It is a regressive tax

32 Our Response: All sales taxes, fees and fines are regressive as a matter of practice. ce. Only income and property taxes are consciously progressively structured. For example Hunting and fishing licenses are paid by those who hunt and fish, regardless of income Drivers license and license plate fees are paid by those who drive, regardless of income It is a generally accepted concept of fairness that those who participate in an activity should help shoulder the costs that activity incurs Are the opponents of the beer tax advocating a major re-write of our tax code to make all taxes, fees and fines progressive? I don t t think so

33 Argument 2 Beer is a blue-collar drink The beer tax hits average working people of modest means hardest, because they drink the most beer

34 Our Response: A False Beer consumption is approximately evenly split across upper and lower income levels BeerSoaksAmerica.org; Beer Consumption in America, citing Adams Beer Handbook, 2006

35 In fact, beer is consumed somewhat more by the upper classes People earning $50,000 or less consume 39% of the regular beer in the U.S. While those earning $75,000 or more drink 41% of the regular beer For light and imported beer: lower income people (making $30,000 or less) are 11% to 53% less likely than upper income people to drink these types of beer BeerSoaksAmerica.org; Beer Consumption in America, citing Adams Beer Handbook, 2006

36 60% of regular beer consumers earn incomes of $50,000 or more While, Wisconsin s s median household income is only about $45,000 BeerSoaksAmerica.org; Beer Consumption in America, citing Adams Beer Handbook, 2006 U.S. Census Bureau, 2005

37 Our Response: B The average drinker will not bear the brunt of a beer tax increase

38 Beer producers are not so concerned with the average drinker They know that most of their revenues come from price-insensitive insensitive heavy drinkers

39 The heaviest drinking 10% of beer drinkers consume a whopping 42% of reported beer consumption Center for Science in the Public Interest: Fact Sheet of Beer Consumption and Taxes, August 2003

40 20% of drinkers consume 85% of all beer! Greenfield, T.K. & Rogers, J.D. (1999). Who drinks most of the alcohol in the U.S.? The policy implications, Journal of Studies on Alcohol. 60.

41 The moderate-drinking drinking majority of drinkers consumes, on average, relatively little alcohol and pays a negligible amount of alcohol taxes

42 Between 1984 & 2009, the CPI growth for all products was about 16% higher than for beer consumed at home and 71% higher than for beer consumed outside of the home US Department of Labor, Bureau of Labor Statistics, Consumer Price Index, 2009

43 Heavy and addicted drinkers who account for most of the beer consumption in the U.S. rightly pay most in beer taxes, since their drinking imposes the greatest cost to society

44 2.4 If a per bottle tax increase will cause you financial burden.. You have worse problems to deal with than the beer tax

45 Argument 3 A beer tax will hurt economic development and cost jobs in Wisconsin

46 Our Response Claims of job loss are not supported by the evidence Between 1990 and 2000,, beer industry wholesale trade employment rose by more than 8,000 jobs nationally Including increases between 1990 and 1992 a year before and after the last federal beer tax increase! an increase that was almost equal to that proposed by Rep. Berceau Bureau of Labor Statistics of the U.S. Department of Labor

47 Beer Lobbyists Tell Us That the Industry Provides Plenty of Jobs We Don t t Disagree Coroners Emergency Medical Technicians Tow Truck Drivers Prison Guards Social Workers Ambulance Drivers Hospital Trauma Teams Court Commissioners Judges Police Officers AODA Counselors Jailers Collection Agencies Insurance Adjusters Plastic Surgeons Physical Therapists Psychiatrists Repossession Agencies Marriage Counselors Firefighters Auto Body Shops Academic Counselors Bailiffs Funeral Directors

48 Consider the effects of that federal beer tax increase of 1991 Economists at the National Bureau of Economic Research estimate that the 1991 increase in the federal beer tax saves more than 600 young lives in alcohol-related crashes each year In the two years following the increase, syphilis rates fell nearly 40% and gonorrhea rates declined nearly 30%, attributable to the tax Grossman, M., Chaloupka, F. J., Saffer, H., & Laixuthai, A. (1994) Effects of alcohol price policy on youth: A summary of economic research. Journal of Research on Adolescence, 4(2): Chesson, H., Harrison, P. & Kassler, W.J. (2000). Sex under the influence: The effect of alcohol policy on sexually transmitted disease rates in the United States. Journal of law and Economics. XLIII:

49 Argument 4 A beer tax increase will cause businesses to move to more tax-friendly states

50 Our Response Historically this just doesn t t hold. Despite Wisconsin s low beer tax, we have seen the relocation of Schlitz (1981), Pabst (1996) and Miller s s Headquarters (2008) Wisconsin has the 10 th highest number of microbreweries per capita. This is great for Wisconsin jobs! But note that 8 of the states with more microbreweries per capita have higher beer taxes than WI. Once again, this shows that a higher beer tax is not causing breweries to flock to other states with lower taxes. 1) Beer town no more: Milwaukee Struggles with its image Daniel LeDuc, Wisconsin State Journal. Madison, Wis.: Dec 9, )JUST LIKE OLD TIMES WITH SCHLITZ; "THE BEER THAT MADE MILWAUKEE FAMOUS" IS ON GROCERY SHELVES AND IN TAVERNS IN MILWAUKEE ONCE AGAIN, AND THAT'S BRINGING BACK MEMORIES FOR A LOT OF MILWAUKEEANS. EMILY FREDRIX Associated Press. Wisconsin State Journal. Madison, Wis.: Aug 2, ) Last call dawns for Miller Brewing; Merger with Coors becomes official TOM DAYKIN. Milwaukee Journal Sentinel. Milwaukee, Wis.: Jul 1, ) Brewers Association, Breweries Per Capita ) Factbook on State Beer Taxes

51 Argument 5 The cost of alcohol treatment programs should be shared by all taxpayers not borne solely by those who can least afford it A beer tax penalizes the responsible consumer

52 Our Response do you think is paying for Wisconsin s multi-million million treatment budget now? Who All Wisconsin taxpayers Drinkers and non-drinkers alike Those who can and can t t afford it Everyone is currently paying for the costs incurred by a minority of excessive drinkers Is this fair?

53 What are the costs? The $9.7 million raised by the state beer tax last year The raised by the state beer tax last year covered only a fraction of treatment costs In 2007, alcohol related crashes and medical conditions in Wisconsin cost taxpayers $935 million For FY07 The UW Healthcare system provided $6 million worth of charity to intoxicated inpatients million It doesn t t count the estimated $2.7 billion in: Policing and court costs Incarceration costs Traffic crash costs Lost productivity costs Academic failure costs Premature death costs ALL ALCOHOL-RELATED National Institute on Alcohol Abuse and Alcoholism. (2000). 10 th Special Report to the U.S. Congress on Alcohol and Health. Chapter 6. NIH Publication No Rockville, MD: U.S. Department of Health and Human Services. Health Care Coalition hopes to toughen state s alcohol laws Gina Barton, Milwaukee Journal Sentinel, Nov. 10, 2008

54 What is the average cost for you? Each Wisconsin resident pays only $1.82 a year in beer taxes But also $18.64 in alcohol treatment costs and $154 in alcohol-related healthcare costs ($86 specifically from beer) and $500 in alcohol-related criminal justice and societal costs Center for Science in the Public Interest: Alcohol Policies Project, Handbook on State Beer Taxes, August 2004 Gogek, Jim, Taxing the Binge, The New York Times, 3/13/03 National Institute on Alcohol Abuse and Alcoholism. (200). 10 th Special Report to the U.S. Congress on Alcohol and Health. Chapter 6. NIH Publication No Rockville, MD: U.S. Department of Health and Human Services.

55 Pop Quiz What was the total cost of an alcohol related traffic crash in 2007? An estimated $70,270 Wisconsin Department of Transportation, using National Safety Council s unit cost estimates, 2009

56 How expensive is alcohol abuse nationally? Alcohol abuse and addiction cost the nation an estimated $220 billion in 2005 more than cancer ($196( billion) and more than obesity ($133( billion) The Commercial Value of Underage and Pathological Drinking to the Alcohol Industry, The National Center on Addiction and Substance Abuse at Columbia University, May 2006

57 Which states earmark the beer tax for alcohol treatment? Arizona Idaho Kansas Mississippi Montana New Jersey Nevada Oregon Tennessee Utah Drug and Alcohol Treatment Fund Alcoholism Treatment Account Community Alcoholism and Intoxication Programs Fund Alcoholism Treatment and Rehabilitation Fund Treatment, rehabilitation, and prevention of alcoholism and chemical dependency Alcohol Education, Rehabilitation, and Enforcement Fund Increase services for prevention and treatment of alcoholism and alcohol abuse Mental Health, Alcoholism and Drug Services Account To assist municipalities and counties in carrying out the provisions of the state s s 1973 Comprehensive Alcohol and Drug Treatment Act Programs or projects related to prevention, treatment, detection, and prosecution Center for Science in the Public Interest: Alcohol Policies Project, Factbook on State Beer Taxes, August 2004

58 Some positive unintended consequences of raising the beer tax For every 1% increase in the price of beer, the traffic fatality rate declines by 0.9% (Ruhm,, 1996) The Centers for Disease Control and Prevention found that a beer-tax increase of 20 per six-pack would reduce gonorrhea rates by 8.9% and syphilis rates by 32.7% (Chesson et al, 2000) A 10% increase in beer taxes would reduce the overall number of students ts involved in some sort of violent behavior by about 4% (Grossman and Markowitz, 2001) If the alcohol in beer were taxed at the same rate as alcohol in distilled spirits, the number of fatalities among 18 to 20 year-olds in traffic crashes would decrease by 21% (Grossman, Chaloupka,, 1994) Higher beer taxes lead to significant reductions in crime, particularly under 21 (Staffer, 2001)