Californians Pay the Price

Alcohol Abuse Costs Billions

Alcohol abuse in California carries a heavy price tag-more than $500 per year for every California taxpayer-according to a 2004 report by the Institute for Health and Aging and the Institute for the Study of Social Change. In 2001, the cost of alcohol in California came to $17.8 billion-including the cost of health care, alcohol abuse treatment and prevention, the value of lives lost prematurely, and criminal justice system costs.

Lives lost prematurely due to alcohol abuse represents the largest cost for the State. More than 13,000 Californians died as a result of alcohol abuse, including 3,600 whose death was caused by alcohol directly, 5,100 who died of an alcohol-related diagnosis, and 4,400 who died of an injury attributed to alcohol. The total value of productivity lost as a result of alcohol-attributed incidents was $8 billion.

What is the alcohol industry paying to offset some of these costs? Data shows that the alcohol industry paid approximately $330 million in 2001 to California in excise taxes, fines, and fees. This figure includes $42 million in Alcoholic Beverage Control license fees and fines, and $130 million in excise taxes on beer sales, $19 million on wine sales and $138 million on spirits. After the alcohol industry paid this $330 million in 2001, California was still left with a $17.46 billion tab.

To alleviate the cost of alcohol abuse in California, the report's authors offer the following solutions:

• Increase the price of a drink. We know that when the price of an alcoholic beverage increases, consumption rates and alcohol-related problems decrease.
• Raise alcohol license fees on retailers. On average a retailer pays $365 per year to renew an alcohol license. Alcohol retailers use more public services, particularly public safety, than any other type of commercial outlet. For that reason, the State should raise annual alcohol license fees to offset the extra costs spent responding to problems at licensed establishments.
• Increase taxes on alcohol producers and distributors. Excise taxes in California for beer and spirits are midrange compared to other states, and are among the lowest in the nation for wine. A tax increase on the alcohol industry could compensate the State for public health programs, justice and safety personnel as well as government social programs.

Source: Institute for Health & Aging, University of California, San Francisco and Institute for the Study of Social Change, University of California, Berkeley