Proposed alcohol tax passes first committee
A new bill proposes a new tax on alcohol retail sales to benefit treatment programs.
Lawmakers today introduced a proposal to raise New Mexico's tax on alcohol for the first time in 30 years and re-direct revenue toward treatment and programs.
The House Health and Human Services Committee voted 6-4 to advance House Bill 417, Liquor Tax Changes and Programs. It now heads to the House Taxation and Revenue Committee.
The bill specifically creates a new 6% sales tax — also called a surtax — on alcohol sold in retail establishments, and eliminates distribution of revenue from the existing alcohol excise tax to the general fund, which currently receives a portion of that money.
Instead, the bill creates a new Local Alcohol Harms Alleviation Fund to allocate funding to counties and 'target the communities most in need by prioritizing counties with the highest death rates from alcohol use,' a news release on Wednesday said. Counties that receive the funding 'could use these funds for grants to raise awareness of the harms and risks associated with substance misuse, promote prevention, get people into treatment, and address issues like impaired driving.'
HB417 also creates a new Tribal Alcohol Harms Alleviation Fund and Program to provide grants to the state's tribes, nations and pueblos, as well as entities that serve Native Americans.
Lawmakers say the bill arrives after months of discussion. The proposal also follows several years of failed efforts to raise the tax on alcohol, and increasing scrutiny of New Mexico's top ranking for alcohol-related deaths.
Representatives Micaela Lara Cadena (D-Mesilla), Joanne Ferrary (D-Las Cruces) and Cristina Parajón (D-Abuquerque) and Senators Shannon Pinto (D-Tohatchi) and Antionette Sedillo-Lopez (D-Albuquerque) co-sponsored the bill.
'Far too many of us have lost a loved one to alcohol,' Ferrary said in a statement. 'With this bill, we are taking an important step that is many years in the making to help improve access to treatment, reduce excessive drinking, and hopefully begin saving lives.'
A fiscal analysis of the bill estimated that the proposed surtax imposition will generate $45.7 million in FY26, and that HB417 would reduce recurring general fund revenue by $24.7 million by redirecting revenue to the alcohol prevention and treatment programs.
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