Hawai‘i Alcohol Tax Bill Introduced; Last Increase was 22 Years Ago

House of Representative Vice Speaker John Mizuno announced the introduction of House Bill 771 to establish a 3-year surcharge on alcohol.  Mizuno notes that the state’s alcohol tax has not been increase since 1998, more than 20 years ago.  He said the bill has the potential to raise more than $60 million in revenue for the state coffers. He said the bill aims to save lives by reducing excessive alcohol abuse, drunk driving, vehicle homicides, domestic violence, addiction, and healthcare costs.

 House of Representative Vice Speaker John Mizuno today announced the introduction of HB 771 to establish a 3-year surcharge on alcohol which aims to save lives by reducing excessive alcohol abuse, drunk driving, vehicle homicides, domestic violence, addiction, and healthcare costs.

“Raising just a nominal surcharge on alcohol beverages will save lives and increase revenue to the state coffers. It is important to note the alcohol tax has not been increased since 1998,” said Rep. Mizuno (D–28, Kalihi Valley, Kamehameha Heights, and portions of Lower Kalihi). “More important than revenue generation is the fact that hiking the alcohol tax will save lives.”

Several health experts have voiced support for the bill.

“Alcohol taxes save lives. It has been 22 years since we raised the alcohol taxes, and in the meantime alcohol problems have cost our State close to $1 billion per year. A dime a drink is a small down payment towards getting alcohol to pay for itself,” said Chelsea Gonzales, Hawaiʻi Alcohol Policy Alliance Coordinator. 

Dr. Ann Yabusaki and Dr. Ken Yabusaki, with Hawaiʻi FASD Action Group said bottled and container alcohol sales have gone up dramatically last year due to the COVID-19 pandemic.

“With the increased consumption, and more people staying home, increased drinking during pregnancy is likely. This also increases the risk for the future keiki who may be born with Fetal Alcohol Spectrum Disorder (FASD) which is a permanent brain disability,” they said.

“This bill is not antibusiness; it’s about protecting people. Babies are born with fetal alcohol spectrum disorder (FASD) everyday, therefore I surmise this bill comes down to profit or people. It costs $55,000 annually per FASD offenders in prison, due to the neurological disorders they have caused by alcohol abuse,” said Darlyn Chen Scovell, Infant Mental Health Expert, Hawaiʻi FASD Action Group.

“It is significant to point out that economic studies have demonstrated that increased alcohol taxes and prices are directly related to reductions in alcohol use, alcohol abuse, and related crimes and social problems,” Rep. Mizuno said. “I think this is the best time to have a small raise in the alcohol tax, which has not been raised since 1998.”

According to the Centers for Disease Control and Prevention (CDC) excessive alcohol use is responsible for about 95,000 deaths a year in the United States. Deaths due to excessive drinking account for 1 in 10 total deaths among working-age adults aged 20 to 64 years.

In 2010, excessive alcohol use cost the US economy $249 billion, or $2.05 a drink. About 40% of these costs were paid by federal, state, and local governments.

“The adverse health effects of alcohol abuse are catastrophic, as it can lead to high blood pressure, heart disease, stroke, liver disease, cancer, fetal alcohol spectrum disorder (FASD), motor vehicle crashes, falls, drownings, homicide, suicide, sexual assault, domestic violence and drug overdoses when combined with opioids,” Mizuno said.

FACTS ON ALCOHOL – PUBLIC HEALTH ISSUE & PUBLIC HEALTH BENEFIT OF THE BILL

Public Health Issue: 

• Excessive alcohol consumption is the third-leading cause of preventable death in the U.S.

• Further, excessive drinking was responsible for about 1 in 10 deaths among working-age adults aged 20 to 64 years.
• 31.2% of traffic fatalities are alcohol-related from 2014-2018, as compared to the US average of 28%.
  • The economic costs of excessive alcohol consumption in Hawai‘i (2010) was $937.4 million, or $1.58 per drink.
• The World Health Organization calls alcohol price increases a top-3 “best buy” to reduce the alcohol harms.

Public Health Benefit

• Increasing the price of alcohol reduces overall consumption in a community, and thereby reduces alcohol related harms.
  • Price elasticity of alcohol demand – Beer, wine, spirits would be a 3.46%, 4.70%, and 6.63% reduction, respectively on a 10 cents per drink increase.
• Increasing the price of alcohol is the strongest prevention measure to reduce consumption and its related consequences and is a recommended prevention strategy.