As budget negotiations at the New York State and New York City levels enter critical negotiation phases, elected officials and outside advocates will seek increased funding to address a number of the most pressing problems our communities face, including chronic diseases, serious mental illness, unintentional drug overdose, and gun violence.
While none of these problems are simple to solve, they all share at least one common contributing/complicating factor: alcohol consumption, according to research from the NCD Alliance, the World Health Organization, the NYC Department of Health and Mental Hygiene, and Columbia University, respectively, among many other expert bodies.
That clear fact makes increasing alcohol taxes an attractive policy option, since it generates revenues, reduces health care costs, and reduces alcohol-related problems.
Keep in mind that the real value of alcohol taxes at the NYS and NYC levels has eroded dramatically over the last several years since they have not been adjusted for inflation.
New York State: The state’s alcohol taxes on both beer and wine are very low at less than 2 cents per a standard size serving. (See this for standard serving sizes.) In fact, New York State’s wine tax is currently one of the lowest in the nation and less than half the rate at which wine is taxed in neighboring New Jersey and Connecticut. While relatively higher, the state tax on distilled spirits (hard liquor) still is less than 8 cents per serving.
Clearly, these rates could be increased without burdening consumers and still generate millions of dollars to fund badly needed services and help reduce alcohol-related problems.
There have been some legislators who have clearly seen this need. In January, NYS Senator Leroy Comrie (D-Queens) introduced the Addiction, Prevention, and Recovery Act of 2023 (Senate Bill S1546) which would increase state taxes on alcohol and allocate the additional revenue to “a special fund to be used for the purposes of alcohol and substance abuse addiction prevention and recovery services and programs.”
The supporting documentation for Senator Comrie’s legislation indicates that this action would raise approximately $260 million annually in additional state revenue. This would be accomplished by increasing per serving state taxes on beer, wine, and liquor by a mere 3 cents, 2 cents, and 10 cents, respectively.
New York City: Since 1980, NYC has levied a small tax (equivalent to about 1 penny per serving) on beer and liquor, but, illogically, not on wine. Moreover, the city’s miniscule rate for taxing beer and liquor has never been adjusted for inflation, so has effectively been falling for over four decades. The NYC Independent Budget Office (IBO) recently estimated that an additional $35 million annually could be generated were New York City’s alcohol tax rates extended to cover wine and also adjusted upward so as to account for just a portion of the decades-long inflation that has eroded this revenue source.
Both New York State and New York City face pressing challenges, many of which will require additional resources for critical public health, social service, public safety, and mental health needs. Increasing alcohol taxes by just a few cents per serving could deliver millions of dollars in badly needed funding to the respective coffers of both the state and city.