Alcohol revenues have high costs for business
Of the total $1.15 billion spent on dealing with excessive consumption in N.H., $824 million is borne by the private sector
New Hampshire sells more alcohol per capita than any other state in the country and is proud of it.
The Liquor Commission touts its “brand” – New Hampshire sells cheap alcohol – and aggressively markets this brand through sophisticated advertising.
As a result, the sale of alcohol contributes more revenue per capita to the state’s general fund than any other state. In fact, revenue from the sale of alcohol is New Hampshire’s fourth-largest revenue source.
But this success comes with high costs, especially for the business sector.
A recently released report by economist Brian Gottlob of PolEcon Research found that the cost associated with excessive alcohol consumption (binge drinking, heavy drinking, underage drinking and drinking by pregnant women) in New Hampshire is $1.15 billion per year. About two-thirds of that cost, more than $756 million, is borne by New Hampshire businesses as a result of lost worker productivity.
In addition to the impact on business, excessive alcohol consumption results in increased health care, public safety and criminal justice and other costs, totaling more than $390 million.
This includes medical expenditures, especially hospital charges, for diagnoses caused by alcohol; costs associated with treatment for excess alcohol consumption; the costs of policing and prosecuting alcohol-related crimes; incarceration costs for those convicted of alcohol-related crimes; and the costs associated with alcohol-related motor vehicle crashes.
Of the total $1.15 billion in costs each year, $824 million is borne by the private sector, and $251 million is borne by state and local governments.
The business sector should be particularly concerned about the findings in the Gottlob report. Individuals who work less, produce less and earn less because of excessive alcohol consumption represent a waste of human resources.
Due to a slowing of population growth and fewer people moving to New Hampshire, human resources are becoming scarcer in New Hampshire. If New Hampshire wants to maximize the performance of its economy, it cannot afford to waste human resources.
The gravity of the impact of excessive alcohol consumption on New Hampshire’s economy was underscored in Gottlob’s conclusion: “Alcohol treatment and prevention is likely to have a greater long-term economic impact than nearly all other strategies to improve the performance of the New Hampshire economy.”
During her recent inaugural address, Gov. Maggie Hassan said, “There are some things that government must do, not only to help our most vulnerable citizens, but also to provide the platform for economic growth.”
Ensuring access to alcohol treatment and prevention services is one of the things government must do if it wants to improve the performance of New Hampshire’s economy.
Under existing law, a small percentage of profits from the sale of alcohol in New Hampshire is required to be used for alcohol prevention and treatment services. Each year, state budget writers suspend this law and use some of the dedicated profits for other purposes.
The law recognizes that a state that not only sells alcohol, but also aggressively markets it, has a responsibility to deal with the problems that result.
For the health of New Hampshire’s workforce and its business community, we urge the governor and Legislature to make the right decision – act to ensure the formula for funding prevention and treatment services is not suspended.
Tym Rourke is director of programs and substance use disorders grantmaking for the New Hampshire Charitable Foundation in Concord.