Opinions

Anchorage alcohol tax makes good economic sense

You often hear that taxes are a drag on the economy. However, the proposed 5% alcohol tax to be decided upon by the Anchorage voters is good policy and makes sound economic sense.

To start with, it’s worth considering the “cost” that over-consumption of alcohol imposes on a community. Police, courts and first responders have to deal with these issues, at great cost to the average taxpayer. The McDowell Group reckons that these and related expenses tally up to nearly $2.4 billion per year in Alaska, or more than $3,200 per resident. It’s a tab we’re all picking up right now, through our taxes or lost economic productivity.

Some opponents say that such a tax would hurt small businesses. That is just not true. Research indicates that casual drinkers seldom alter their behavior in response to alcohol taxes, so the bars, breweries, and restaurants that cater to them would see little or no negative impact. When I buy a pint of one of my favorite craft beers for $6, I won’t give much thought to the extra 30 cents I’ll have to pay.

On the other hand, many Anchorage small businesses do quietly suffer the costs of excess drinking every day. They are the ones who frequently have to hire extra security and who absorb the lost productivity of absentee employees. A failure to address alcohol misuse only harms the economy and the business climate.

The money from this tax would be dedicated to spending on police and first responders, prevention of child abuse, sexual assault, and domestic violence, substance use disorder treatment and prevention, and resources for homelessness – as outlined in the ballot language. As an amendment to the Municipal Charter (the city’s constitution) revenues can only be spent in these areas by force of law. The 5% rate could only be changed by a vote of the people, and not by politicians.

The alcohol tax isn’t a cure-all. The challenge of alcohol misuse is far too big to be swept away by a modest tax. Yet this ballot initiative promises to direct dediated resources to long-neglected public health and safety needs. That’s good for the people — and economy — of our city.

Nolan Klouda is the chair of the Anchorage Budget Advisory Commission and the executive director of the Center for Economic Development at the University of Alaska Anchorage.

The views expressed here are the writer’s and are not necessarily endorsed by the Anchorage Daily News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)adn.com. Send submissions shorter than 200 words to letters@adn.com or click here to submit via any web browser. Read our full guidelines for letters and commentaries here.

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