Who's Paying The Price Of Alcohol?

Alcohol costs the public a lot of money and not just at the counter. According to the CDC, alcohol-related problems cost South Dakota tax payers millions of dollars a year. 

A lot of this money is spent on medical costs, legal fees and jail space. So why do you have to pay for other people's choices?

Everyone knows, if you get caught drunk driving there are serious consequences. Not only could you risk lives, you could face legal and monetary issues. However, the offender isn't the only one paying for their actions.

"When someone is arrested, incarcerated, that costs the county money. Prosecuted, that costs the county money. Defended, that costs the county money," Minnehaha County Commissioner Jeff Barth said.

"You know, jail bed days are expensive. They're getting closer to $100 a day. So there is an expense on taxpayers," Minnehaha County Sheriff Mike Milstead said. 

Milstead says between the county, police and highway patrol, there were between 1,300 to 1,400 DWI arrests just last year. 

According to the CDC, these jail costs are just the tip of the iceberg.

For every ounce of alcohol sold in South Dakota, the taxpayer pays about $1.59 in harm costs, which equals $160 million from taxpayers. This adds up to $600 million a year for the state.

"The truth is that alcohol revenues only bring in about $20 million per year. So if you've got $20 million income, and you've got $600 million expense-related costs that means that tax payers and small- and medium-sized businesses are paying 97 percent of the cost and the alcohol industry is paying only three percent of the cost," Matt Walz, with the group South Dakota Alcohol Policy Alliance, said. 

Now, the state does receive excise tax revenue from alcohol sales. But some say it's not enough.

For example, South Dakota gets about a nickel from a 24 oz. can of malt beverage. The county gets about a penny from that. The rest goes back to the alcohol producer.

Walz says his group is not looking to create another prohibition or punish small, local breweries. But he says excise taxes haven't changed since the 1980s, and that's a problem.

"If you look at what it's bringing in, it's not hyperbole to say that South Dakota has left hundreds of millions of dollars in uncollected tax revenue on the table, and much of that has gone into the pockets of out-of-state owned alcohol distributors and producers," Walz said.

Two years ago, the state did approve a measure to move money earned from alcohol sales to counties across the state. That gave Minnehaha County about $600,000.

"But I guesstimate that we need 20 times that much to cover the cost in this county alone. Hundreds of millions of dollars for the state," Barth said.

"It's certainly a help. It doesn't cover our costs, but it's a recognition, I think, on the part of the legislators and the governor," Milstead said. 

Milstead says that's why the county has created new, inexpensive ways to help deal with alcohol issues. Programs like DWI court and electronic monitoring systems offenders pay for are already in place to fight the problems putting a strain on the system.

"This has been an issue in jails, in prisons, since before prohibition. So we don't expect that all of a sudden everybody will stop drinking if they raise the taxes on alcohol or something. But what we do is put promising programs, evidence-based programs out there, like the 24/7 SCRAM, like drug courts and DWI courts, veterans courts, and make them available to try and get people back on track," Milstead said. 

In the meantime, those trying to make a difference across the state say they will continue the dialogue on alcohol harms and hope to see change in near future.

"It is likely that we'll see a bill related to alcohol taxation. There's a lot of people talking about that. And about the inequality and who's paying the tab," Walz said.

The people we spoke with say they have heard fears raising taxes on alcohol could harm local businesses. Walz believes there could be exemptions for local breweries and wineries within the state.




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