Alcohol misuse results in over $300,000,000 annually in costs paid by Louisiana taxpayers. These costs are paid out of the general fund in areas of health care, law enforcement, and emergency services.
Increasing excise taxes is a means of both reducing costs and promoting economic growth. As a result, the size of government is reduced. The reduction in the size of government results from the reduction of the state budget in the areas of law enforcement, health care, and EMS services. Increasing the alcohol excise tax also represents and engine for economic growth by increasing the desirability of Louisiana for businesses and tourists by reducing the visibility of alcohol related problems.
The budget saving from increasing the excise tax can be estimated. Raising the tax 10 cents a drink represents a 15% average increase in the cost of alcoholic beverages, assuming the costs are passed on to the consumer. According to economic studies, this would translate into a 10% reduction in alcohol consumption. A reduction in alcohol consumption of this magnitude would result in proportionate decreases in alcohol related problems.
Projected Budget Saving
Current Projected Cost (Millions) Saving (Millions)
Health Care $ 157 $ 16
Law Enforcement $ 87 $ 9
EMS Services $ 67 $ 7
$ 32
Economic Development
Rather attempting to attract business to Louisiana with budget giveaways raising alcohol excise taxes holds the promise of creating Louisiana communities businesses want to relocate to. Tourism would be affected in a similar fashion. Much of the crime in South Louisiana that can act as a deterrent to conventions and individual tourists visiting the state is alcohol related. In addition, research demonstrates increasing the price of alcohol is less likely to affect the consumption pattern of tourist compared with the general population.
Source: Richard Scribner MD, MPH, LSU Health Sciences Center