PoliGraph: Claim on cost of alcohol to state checks out

One of the more controversial tax proposals being debated at the Capitol this week is an increase in the excise tax on alcohol a tax on liquor included in a massive House tax bill.

As it stands, the expected $200 million in annual revenue the new tax would raise would be put into the state’s general fund.

But one group is advocating that the provision should be directed to alcohol recovery programs, domestic violence programs and other services.

That’s because alcohol costs Minnesotans “5.06 billion dollars in economic and social costs,” reads a flier passed out this week at the Capitol by the Minnesota Recovery Connection, a group that advocates for addiction recovery programs.

It’s true that alcohol costs Minnesotans billions.

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The Evidence

Minnesota Recovery Connection is getting its number from a Minnesota Department of Health study from 2011.

Using data from 2007, the most recent year available, the department concluded that alcoholism costs the state’s economy $5.06 billion annually.

Much of that cost – about 73 percent – can be attributed to lost productivity due to alcohol-related illnesses and premature deaths due to alcohol abuse.

The rest is the result of healthcare spending related to alcohol abuse and treatment, alcohol abuse support programs, administrative costs associated with DUIs and alcohol-related crime.

The Minnesota Department of Health’s study looks at alcohol’s cost to the state’s economy, which largely come from lost productivity. The cost to the state government is more like $2 billion according to House Majority Leader Paul Thissen who recently spoke about the issue at the Humphrey School of Public Affairs.

The Verdict

The evidence for this claim is straight forward: it earns an accurate.

SOURCES

Minnesota Department of Health, The Human and Economic Cost of

Alcohol Use in Minnesota, March 2011

Minnesota House Research, HF 677, April 22, 2013

Minnesota Public Radio, House and Senate Democrats differ on alcohol tax, by Tom Scheck, April 22, 2013