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Senate Passes Alcohol Excise Tax Increase
Rep. Murkowski's HB 225 Will Raise Tax to a ''Dime a Drink''

(JUNEAU) - The Senate today passed legislation sponsored by Rep. Lisa Murkowski (R-Anchorage) that will increase the state's excise tax on alcohol to a dime a drink, the first such increase since 1983.

"Alaska has enjoyed what amounts to the lowest effective tax rate on alcohol in the nation, and will continue to rank among the lowest even with this increase," Murkowski said. "However, House Bill 225 should help us recover a slightly larger amount of the $250 million or more in costs associated with alcohol abuse the state incurs each year. I am gratified my colleagues in the House, and now the Senate, have agreed to a 'dime a drink.'"

Current state law collects only about 3 to 4 cents tax per drink of beer, wine or distilled spirits, a rate that has not risen in 18 years. As passed by the Senate, HB 225 increases that rate by approximately 7 cents per serving of beer, wine or distilled spirits, increasing annual state alcohol tax revenue to approximately $30 million from the current $12.1 million.

The Senate-passed version of the bill includes language establishing a special fund within the state's general fund, and expresses the Legislature's intent that this fund could receive half of the proceeds from the tax to support alcoholism treatment and counseling programs.

"This tax represents a user fee - I believe those who chose to drink should bear the costs of their choices," Murkowski said. "The addition of the treatment component to this bill provides a mechanism so that people having difficulties making responsible choices about drinking have an additional avenue for help."

Murkowski pointed out that even at a dime a drink, Alaska's alcohol tax will come nowhere near compensating the state for the social, economic and personal costs that alcohol imposes on Alaska for police, courts, jails, hospitals, medical care, domestic violence and deaths resulting from alcohol abuse.

"My intent has never been to collect a tax to pay all the costs that alcohol imposes on the social life and economy of our state," said Murkowski. "I view the tax as a modest user fee to help people be responsible for their choices. I also have hopes that it will discourage younger people, who are more sensitive to price, from drinking."

Murkowski said her bill is an important part of the Republican Majority's efforts to address alcohol and alcohol abuse in Alaska, including expanded treatment, therapeutic courts and diversion programs already passed.

HB 225 moves next to the House for concurrence with Senate changes.

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