Bill would create more funding for research, prevention, and treatment and modernize how alcohol is taxed in New Mexico

Santa Fe, N.M. – Today, 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) presented a new plan to address the harms caused by alcohol across New Mexico and modernize the way the state taxes alcoholic beverages. The House Health and Human Services Committee voted 6-4 to advance their proposal, House Bill 417, Liquor Tax Changes and Programs.

HB 417 is the result of many months of work by lawmakers to develop an evidence-based approach to help reduce excessive alcohol consumption and increase funding for prevention and treatment.

New Mexico has the highest rate of alcohol-related deaths in the nation and has not raised taxes on alcohol in over 30 years. HB 417 would implement a new 6% sales tax on alcohol, bringing New Mexico's alcohol taxes in line with other states, while also creating more funding for research, prevention, and treatment programs in communities throughout the state.

"With these updates to the way alcohol is taxed, we have created a sound policy, modernizing a regressive tax and bringing in new revenue, with purpose," said sponsor Representative Lara Cadena, who also serves as Vice Chair of the House Taxation and Revenue Committee. "Within this expansive framework, we are directing more resources to where they are needed most."

Currently, the bulk of the revenue from the state's existing alcohol excise tax goes into the general fund, drug court funding, and a local DWI grant fund. HB 417 would eliminate the distribution to the general fund and instead direct all revenue raised by these taxes to alleviate alcohol-related harms.

"Far too many of us have lost a loved one to alcohol," said sponsor Representative Ferrary, who also serves as Chair of the House Consumer and Public Affairs Committee. "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."

HB 417 creates a new Local Alcohol Harms Alleviation Fund, in place of the DWI grant fund, that would distribute funding to counties and target the communities most in need by prioritizing counties with the highest death rates from alcohol use. Counties 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.

"We are taking an approach to this critical public health issue that is both evidenced-based and tailored to New Mexico," said sponsor Rep. Parajón. "New Mexico is unique in our histories and our cultures, and our policies must reflect that."

With new sales tax revenue, this bill also creates a new Tribal Alcohol Harms Alleviation Fund and Program that would provide grants to New Mexico's tribes, nations and pueblos, and local entities that serve Native Americans, including urban Indian populations.

HB 417 now heads to the House Taxation and Revenue Committee.

Members of the public are welcome to attend floor sessions and committee meetings at the New Mexico Roundhouse, and can tune in virtually through the New Mexico Legislature's Webcasts tab. Public comment can also be provided in-person, and via phone or Zoom as directed on the daily schedule.