Thread by @TedAlcorn

Today the NM House tax committee begins considering an omnibus tax bill. To the surprise of many, the draft includes an alcohol tax increase—but not a meaningful one. Advocates had asked for a flat quarter-per-drink tax; the draft language offers little more than a penny. #nmleg

In historical context, inflation continually erodes alcohol taxes' real value & the draft increase would not come close to returning beer and wine to the levels they were taxed in '94. Liquor—hiked the smallest amount—would only make up for ground lost to inflation *since 2021*.

Sponsor @rjferrary53, who'd negotiated with opponents, attributed the tiny increase to an error in drafting. She said it was meant to be 15¢ *per drink* of alcohol regardless of type. The draft increases taxes 15¢ *per gallon* of beer and *per liter* of wine and spirits.

A 15¢-per-drink hike, though falling short of the flat quarter-per-drink tax Ferrary and others had originally sought, would increase tax rates significantly. Compared to their real value in 1994, liquor would rise +54%, wine +49%, beer +143%.

Advocate Shelley Mann-Levv emailed me that the draft language was "very disappointing." Will be interesting to see how the draft language is framed by committee members today—as an error to be corrected, or a deliberate nothingburger.

Over the weekend @m_ruth and @trip_44 published a story with essential context for all of this: the alcohol lobby has showered NM lawmakers with nearly thee-quarters of a million dollars since 2013. nmindepth.com/2023/powerhous…

The industry has been particularly generous to members of this legislative committee. In the last election cycle, @AnheuserBusch alone gave them nearly $10,000.

The draft tax bill—section 24 on alcohol taxes begins at page 62— is here: nmlegis.gov/Sessions/23%20…

The NM house tax & rev hearing has begun, webcasting below. #nmpol #nmleg

sg001-harmony.sliq.net/00293/Harmony/…

In introductory remarks describing the full package, @DerrickLente says, "We make modest increases in alcohol tax to further and fund alcohol abuse and prevention programs," noting "we hold harmless all of the local small distributors and the local breweries."

Opposition to this package begins with comment from @abqchamber, who focus on the bill's omission of GRT tax pyramiding relief. "An incredible missed opportunity."

Next comment from Jimmy Bates of Premier Distributing. He says the bill ought to be even smaller, a 15% increase rather than 15¢. That would be well below a penny increase on beer, I'm not sure how it would be levied.

Brent Moore, lobbyist for @AnheuserBusch says they oppose. "We continue to believe that an increase in the liquor excise tax is not appropriate this year." His employer gives more cash to NM lawmakers than any other member of the alcohol industry.

https://twitter.com/TedAlcorn/status/1632744407542775813?s=20

From @NMVoices, @nmamber offers "strong support" for the bill, citing its increases to the child tax credit. Her org has fought for a raft of measures in recent years to increase the progressivity of NM's tax code:

A spokesperson for her org told me they also support raising alcohol taxes. "“They are regressive taxes,” but for the most vulnerable New Mexicans, the “benefits outweigh the harms.”"
nmindepth.com/2023/do-alcoho…

My service is in and out, I have missed various comments in support of the overall bill.

Committee members now discuss. First member (didn't catch who) touts it for helping families, environment, adds: "I'm really pleased that we figured out the alcohol issue and as much as we do, start addressing harms related to alcohol."

Now @RepDGallegos (who is married to super lobbyist Scott Scanland, who has commented against alcohol tax increases) expresses "concern" about establishing an alcohol harms alleviation fund by "diluting" the existing Local DWI fund.

The bill would shift half of alcohol revenues from General Fund to a new Alcohol Harms Alleviation fund as depicted below. By my estimation, due to the bill's even trivial increase in alcohol tax rates, LDWI fund would see no loss in revenue despite receiving a smaller share.

Comment from @markduncanfornm, R-San Juan County: "my hope would have been instead of creating a new fund that they would have just gone into the LDWI fund." @DerrickLente says primary reason for new fund is to get matching Medicaid funds, if its expenditures are on treatment.

Someone (a legislative staffer?) adds that the allocations were calculated to keep whole all existing beneficiaries of tax revenues. "Nobody should have a reduction in their distribution."

Speaker @JavierForNM, citing reduction in GRT, which with planned changes total 3/4 of a percent: "For the first time in years, we've been able to do something that was unthinkable even 30 years ago, and that is to reduce, arguably, the most regressive part of the tax code."

The committee votes to approve the bill with a do-pass. 9-5, on party-lines.

We'll now wait to see what happens with @ASL4Justice4all's companion bill in the Senate tax committee.

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