It's time for truth in advertising when the supporters of the alcohol tax talk about the proposed tax. They would try and make us believe that any increase in taxation would be used to fight alcohol abuse. Under Article IX Section 7 of the Alaska Constitution, "the proceeds of any state tax or license shall not be dedicated to any special purpose, except as provided in Section 15 of this article or when required by the federal government for state participation in federal programs." Section 15 covers the Alaska Permanent Fund. What this means is all moneys collected go to the General Fund to be dispersed as the Legislature sees fit, i.e. buildings, roads, salaries, etc.
From the Alaska Department of Revenue Tax Division Web site I quote, "All revenue from alcoholic beverages tax is deposited in the General Fund. The alcohol tax rate is based on volume, currently at $5.60 per gallon for liquor, $0.85 per gallon for wine and $0.35 cents per gallon for beer." Rep. Murkowski complains that Alaska has the lowest alcohol tax rate of all 50 states. Who cares what the other states have or don't have; may I remind you 47 states have a state tax or a lottery to raise funds, Alaska does not. Should we be like them?
The alcohol tax rate in Alaska is the sixth highest revenue-producing product in Alaska. The two proposed tax increases would move alcohol to No. 3 behind oil and gas and corporate income. When the Legislature talks of "dime a drink," they are talking about only one bill; if both bills pass it's 20 cents a drink. Now, you may think because you don't go out and drink that this won't affect you, you're wrong. This tax will increase what you buy and take home to enjoy. Depending what spirits you enjoy, you pay approximately anywhere from $9 to $26 or more for a bottle of liquor. There are 33 1-ounce drinks in a bottle of liquor. If one alcohol tax bill passes, your bottle of spirits will increase by $3.30; if both bills pass your increase is $6.60, none of which can be dedicated to fight alcohol abuse.
The Division of Alcohol and Drug Abuse from Health and Social Services has a budget of $8 million. The supporters of the alcohol tax state that the state spends $450 million a year on alcohol abuse. H&SS couldn't explain to me where the other $452 million comes from.
Alcohol abuse is a horrible disease, but this proposed taxation is not going to aid or control it. You have no guarantee where this money is going. If the people of Alaska deem it necessary to change the constitution so dedicated funds are used for programs, and until everyone pays, not just the limited users, then maybe an increase is merited. The truth is Rep. Murkowski's and Sen. Donley's legislation will not fight alcohol abuse.
In my opinion, the alcohol industry in Alaska is in decline. It's also the opinion of the Department of Revenue, some of which is due to recent legislation. Passage of these bills will force closure of establishments, loss of jobs and loss of revenue to the state. Figures used in this letter were obtained from the state web site.
James A. Reid is administrator for the Loyal Order of Moose, Juneau Lodge 700.