Nevada Alcohol Tax Hike Passes Senate Committee

Updated: 8:00 p.m. April 5,2017 — A bill proposing a package of sin taxes that would fund government-assisted heroin injection clinics passed its first hurdle in the Nevada legislature today. Senate Bill 181 would boost drug courts and substance abuse treatment programs. It would also launch a pilot program for heroin addiction that emulates one in Vancouver, British Columbia, where addicts are supplied with the drug in a supervised setting.

SB181 would raise excise taxes on beer, distilled spirits, and wine by 50 percent. The cigarette tax would rise by 65 cents per pack, or 33 percent, and gaming licenses would increase by .25 percent.

SB 181 passed the Senate Health and Human Services Committee on a 3-2 party-line vote, with Southern Nevada Republicans Joseph Hardy and Scott Hammond voting no. It will get its next hearing in the Senate Finance Committee.

Senator Tick Segerblom, D-Las Vegas, first presented the bill last month, promoting treatment, rather than a punitive approach to drug addiction.

“The war on drugs is over and we’ve lost,” Segerblom said. “We have to stop criminalizing addictive behaviors and start treating them as mental and physical illnesses.”

Segerblom suggested that if certain substances result in addictive behavior, then those substances should be taxed to pay for the problems they create, including crime, and pressure on health services.

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Slide from SB 181 Sponsor presentation

At the bill’s first hearing in March liquor industry advocates, including the Wine Institute, went on the record with support for the public policy concept, but opposed the funding mechanism.

Data supplied by the Anheuser-Busch Companies projects 75 direct job losses in brewing and distribution, said Mike Hillerby, the company’s Nevada lobbyist. The tax hikes would also cause 119 indirect job losses, he said. A representative for Miller Coors weighed in with similar concerns.

The Distilled Spirits Council of the United States offered a gloomier projection, showing 700 job losses, concentrated in Nevada’s hospitality industry.

The Council submitted a written statement pointing to the existing high rate of taxation on spirits.

“For a typical bottle of distilled spirits purchased in Nevada, over 50 percent of the price already goes to pay a tax or fee of some kind,” the statement says. The proposed tax scheme would raise the cost of a bottle of spirits by 4.5 percent, according to the Council.

On behalf of Altria, parent company of Marlboro and Philip Morris products, Nevada lobbyist Sam McMullen called SB 181 a “great public solution.” He also warned that a higher cigarette tax will send smokers to neighboring states with lower taxes for their purchases. He presented a map illustrating the revenue drain from Nevada into other states after a 2016 cigarette tax increase.

“We raised the tax a dollar (per pack) and lost 32.33 percent of the revenue,” said McMullen.

All opponents said they are reserving their fiscal arguments for an impending presentation at the Senate Finance Committee.

Committee Chair Pat Spearman challenged opponents on their support for the policy, considering they don’t support the taxes to fund it.

“Have you all thought of another way to do this?” Spearman asked. The industry had no specific suggestions, representatives said.

Segerblom enlisted the Drug Policy Alliance to testify about the heroin treatment program. Senior Staff Attorney Lindsay LaSalle told the committee there is scientific support for administering pharmaceutical grade heroin to addicts in specialized, controlled clinics.

“It might at first blush seem radical or controversial to give heroin to people who are addicted to street heroin,” she said, calling it a treatment of last resort. The program is intended to help 10-15 percent of the heroin-using population who have failed to clean up using 12-step and other methods, LaSalle said.

Drug rehabilitation experts and a police officer from Vancouver testified to the effectiveness of the program in that city. A woman in recovery from heroin addiction told the panel that receiving the drug in a supervised setting removed the chaos from her life as she struggled with her habit.


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