A new report finds that alcohol tax revenue surged in the past year — suggesting that consumption of alcohol spiked along with it.
The report, released today by the non-partisan Wisconsin Policy Forum, finds that Wisconsin’s alcohol tax revenue jumped by nearly 17% during the 2021 fiscal year. That’s an increase of more than ten million dollars from the revenue collected in 2020.
It’s the largest single-year spike for alcohol tax revenue since 1972, when tax revenues jumped by nearly 22% — likely driven by an increase in liquor and wine tax rates and the lowering of the legal drinking age to 18.
Mark Sommerhauser, a researcher with the non-partisan Wisconsin Policy Forum, says the stress from the pandemic likely caused an increase in alcohol consumption — although that’s a bit difficult to prove.
“Candidly, it certainly seems very, very likely to me that the pandemic was a key — if not the overwhelming factor — contributing to this revenue increase,” he says. “It’s just difficult for us to be able to link that with certainty. Alcohol tax revenues have been increasing, but as we note in the report, those were relatively small increases of 1-2% per year.”
The policy forum based its report on preliminary state data on excise taxes. Those taxes are calculated based on the volume of beverage sold instead of a percentage of total price. And each type of alcohol is taxed at different rates.
Sommerhauser says that the new tax revenue will have minimal impact on the state’s finances.
“It’s a pretty marginal effect, and this is a nice segue into one of the other points that we make — which is that, here in Wisconsin, we tax alcohol at a much lower rate than other states.”
In fact, Wisconsin has the 48th lowest beer tax rate in the nation, according to the Tax Foundation. For wine tax rates, we’re the 43rd lowest and Wisconsin’s liquor tax rate is the 41st lowest.
The report is the latest data entry pointing to increased alcohol consumption during the pandemic. A previous report from the Policy Forum revealed a fifty percent increase in drunk driving deaths in Wisconsin during the early months of the pandemic.
Pre-pandemic, in August 2019, the forum reported that alcohol-related deaths in Wisconsin had been steadily increasing over the past twenty years.
Tanya Kraege is a recovery coach project manager at Safe Communities of Madison-Dane County, which offers alcohol and substance abuse support services. Kraege says Safe Communities has seen an increase in requests for service since last spring.
Says Kraege: “We are seeing an increase in requests for services for people that struggle with alcohol use only, they’re not necessarily people that use a lot of different things — they’re asking for services for their alcohol use challenges.”
But, Kraege says providing services for those folks has been a long-running problem. She says grants and funding for other substance use disorders, like those involving opioids and amphetamines, are relatively accessible — but that’s not the case for alcohol use disorders.
“This has been an ongoing frustration for a few years for anybody trying to provide services in the community,” she says. “Unfortunately, there’s not a lot of dollars out there for people with alcohol use disorder… Wisconsin, in and of itself, has a high drinking culture. Because of that, it becomes less stigmatized than cocaine or heroin, and it really is more acceptable and I think it takes people a bit longer to realize they may have some challenges with alcohol because it is so socially acceptable.”
Safe Communities runs a 24/7 hotline that offers callers peer support from folks with lived experiences with alcohol use. Kraege says that the hotline also connects callers with other support services they may need.
That number is 608-228-1278.
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