BRANDT GUEST COLUMN: Lawmakers must be cautious when considering excise tax hikes

For two years in a row, we have heard that the solution to New Mexico’s well-documented issues with alcohol abuse could be solved by imposing a record excise tax on alcohol.

While proponents of this idea are well-intentioned, raising taxes is often a recipe for unintended consequences wherein more harm is done than good. That was one reason such a measure failed to muster enough support in the last legislative session. As the discussion moves forward once more, it is imperative to consider the state’s bigger economic picture to avoid a situation where the medicine is worse than the disease.

It is simply a fact that raising alcohol excise tax rates would disproportionately harm certain industries, like beer, and threaten the livelihoods of the people who depend on said industries to provide for their families. This is a serious concern when one understands the significant contribution something like the beer business gives to our state’s economy.

The beer industry in New Mexico is often celebrated for its cultural and social aspects, but make no mistake — it is also a cornerstone of our state’s economic stability and growth.
Beer in New Mexico means so much more than enjoying a cold one on a hot day summer’s day. According to the 2023 edition of the Beer Serves America report, the industry supports more than 12,000 jobs, generating an impressive $530.6 million in wages and benefits for New Mexicans each year.

The influence of the beer industry extends far beyond brewers and bartenders. This sector supports a diverse range of local businesses and industries, from agriculture to retail. The New Mexico beer industry supports thousands of distribution and retail jobs, and hundreds more in agriculture and manufacturing.

The beer industry also plays a vital role in attracting tourism, fostering a sense of community and enhancing our state’s cultural appeal along the way. This industry not only contributes significantly to our state’s economy but also adds to our identity and appeal on a national scale.

In this context, the proposed alcohol excise tax hike warrants careful consideration. Increased taxation could lead to job losses, reduced production and a downturn in the overall economic contributions of this vital sector. As the Albuquerque Journal’s Editorial Board recently put it, an alcohol tax hike “would be a nail in the coffin for many who are struggling to keep their head above water with inflation on the cost of ingredients and equipment while also struggling with employee shortages and supply chain issues.”

Such an outcome would be counterproductive, not only for the beer industry but for the broader state economy. Given this context, legislators would be wise to explore additional and alternative strategies for reducing alcohol-related harm in the state.

The decisions made will shape not only the future of the beer industry but also the economic trajectory of New Mexico. Let’s ensure that the policies we adopt support and nurture this vital sector, recognizing its role in our state’s prosperity and identity.