April 3, 2013

Greg Kesich: Raising state revenue through liquor sales has other costs

Increased sales also mean more of the bad things that happen when people drink too much.

We in the media tend to focus on areas in which Democrats and Republicans disagree.

Taxes, social welfare, charter schools, the role of government -- there seems to be no end to what these parties will fight over.

But in Maine there is one issue on which we have perfect bipartisan harmony.

Booze. Everybody wants to sell more of it.

There is a lot of dispute on how to get that done. The governor wants the state to retake control of the liquor business and use the proceeds to pay off revenue bonds which would be sold to raise money for outstanding hospital debt.

Democrats prefer to contract the business out and make the winning bidder cough up the $200 million for the hospitals in advance, and send future revenues into the general fund.

But neither side questions the assumption that the state needs more revenue from liquor, which it will get by lowering prices to compete with New Hampshire and its state- run liquor stores.

But lowering liquor prices has costs too.

When you lower the price of anything, you will sell more of it. That's just how it works.

If the state sells more liquor it might indeed snatch some business back from New Hampshire (unless New Hampshire just lowers its prices again) but it would also sell more at home. People who now buy as much liquor as they can afford will be able to afford more. And they are just the people we need to be worried about.

Increased sales may mean more money for the state but it also means more of the bad things that come when people drink too much. It means more heavy drinking, more drunk driving, more assaults, more domestic violence, more homicides, more emergency room visits, more nights in jail.

According to Mark Kleiman, a professor of public policy at UCLA who has written extensively on issues of crime and punishment, it boils down to simple math.

Roughly half the people in prison were drinking when they committed their crime. What do they have in common? They are not criminal masterminds. They tend to be present-oriented and impulsive and have poor judgment when it comes to evaluating risk, Kleiman found. Drinking a couple of six packs some evening won't help anybody make better choices.

Most drinkers are not a problem and most people can manage alcohol in their lives; they may even be better off for it.

The answer, Kleiman said, is not prohibition. It's raising the cost of booze through taxes.

Taxes work because they most effect the people who use the most. A moderate drinker would hardly notice if you added a dime to the cost of a bottle of beer. But the guy who drinks seven or eight every night sure would.

The other group most likely to be affected by higher prices are young people who have been shown to drink less (or not at all) when prices rise.

Like increased liquor sales, increased liquor taxes would raise money for the state, even if you discouraged some consumption.

"Almost all the money you would raise comes from heavy drinkers and they are the ones that you most want to effect," Kleiman said. "It's the best drug policy you can have."

Crime is only one cost of heavy drinking. It contributes to deaths by disease or accident. It makes people seek medical care. It breaks up families and leads to child neglect. Heavily intoxicated people start fires, crash their cars and are unproductive at work.

All told, the state Maine Office of Substance Abuse estimated that the total cost of drug use (including alcohol) was $1.2 billion in 2010. If Maine is like the rest of the country, only a small percentage of that comes from illegal drug use.

(Continued on page 2)

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