Mayor Berkowitz and at least three current members of the Anchorage Assembly. Dick Traini, Felix, Rivera and the ever reliable Eric Croft all want a new 5% retail sales tax on alcohol sales in Anchorage. They plan on taking the money, estimated at $2.6 million / year, and spending it on the homeless problem. https://www.adn.com/alaska-news/anchorage/2018/11/13/mayor-proposes-alcohol-tax-for-anchorage-homelessness-and-substance-abuse-treatment-services/
The Mayor’s rationale for slamming everyone who drinks from time to time in Anchorage with a brand new tax is “The reality is, alcohol is an incredibly profitable business in this town.” He goes on to say “It’s a cost-causer that is not paying the cost.”
This claim is both idiotic and dishonest. Essentially Mayor Berkowitz makes the case that any successful business ought to pay more because they are profitable. While this certainly echoes bank robber Willie Sutton’s observation that he robbed banks because “That’s where the money is”, it is hardly the foundation of responsible public policy.
The notion that those of us who drink are not paying our way is patently false and relies on the general public to forget the massive influx of money, nearly $10 million / year into the state from Lisa Murkowski’s Dime a Drink statewide alcohol tax passed in 2002. When passed, legislators promised to spend at least half that new income stream on alcohol and drug programs. They never made it. In fact, they never got close. Ethan was in the legislature for this. So was Andrew Halcro. And this Mayor and Assembly want to do it to us again? Perhaps they forgot. Perhaps they think the rest of us forgot. We didn’t. https://www.adn.com/alaska-news/article/alaskans-drank-more-despite-higher-alcohol-tax-drink-prices/2013/09/16/
Before we fall all over ourselves listening to identical promises of treatment and care for those who abuse the product, perhaps we ought to ask how well it worked last time around. And if it has simply become another funding stream to the State, I can safely predict the Mayor’s proposal will quickly turn into precisely the same thing at the local level.
Doing the same thing over and over again expecting different results is one of the definitions of insanity that is unless the real goal is to jack up a revenue stream another notch, which is not insane at all. Venal, but not insane.
For another viewpoint, you might want to review research published by the National Institute on Alcohol Abuse and Alcoholism in 2013. They found that hardcore alcohol abusers are not effected by increases in price, which do impact light and moderate users. Additionally, higher taxes do not impact underage drinking. https://www.usnews.com/opinion/articles/2013/09/18/alcohol-sin-taxes-are-bad-for-consumers-and-state-budgets
These types of taxes are regressive and disproportionately target the poor, increasing tax burden on those who can least afford to pay. Sin taxes are a precarious way to balance a budget, as they increase reliance on the very products they claim to be discouraging. Finally, higher sin taxes encourage bootlegging and smuggling, the sort of evil that spawned the mobs during Prohibition and lawlessness among the general population a century ago.
And none of this address the fundamental problem of all the societal ills, the lack of personal responsibility. How do you encourage people who are causing the public problem (homeless and public inebriates) to learn and take personal responsibility for themselves and their actions by slamming someone else for problems they did not cause ?
Increasing alcohol taxes ends up being a bad deal for both consumers and government budgets, a one-size-fits-all solution that does much more damage than it claims to solve. Worse, we’ve already done it here in Alaska 16 years ago, via legislation led by Lisa Murkowski while the Mayor and Andrew Halcro were both in the legislature. That hasn’t worked. We still have politicians pointing at the identical problem needing to be solved. Does anyone expect it will be any different this time around? I don’t.
Alex Gimarc lives in Anchorage since retiring from the military in 1997. His interests include science and technology, environment, energy, economics, military affairs, fishing and disabilities policies. His weekly column “Interesting Items” is a summary of news stories with substantive Alaska-themed topics. He is a small business owner and Information Technology professional.
