Colorado lawmakers are pushing new fees on alcohol to fund prevention and treatment, similar to the way the state taxes gambling revenues to offset the costs of addiction.
House Bill 1271 would create three state enterprises to collect fees: one for beer, hard cider and “apple wine”; one for grape wine; and one for spirits. It defines apple wine as beverages made from apples or pears that contain up to 22% alcohol and aren’t cider.
In 2024, the state recorded 1,419 “alcohol-induced deaths,” which includes deaths from organ damage caused by excessive drinking or complications of withdrawal, but not other deaths where alcohol was a factor, such as accidents or certain cancers.
That year, 1,409 people died of unintentional overdoses on other drugs, with fentanyl accounting for the majority.
Alcohol-induced deaths had trended up since at least 2000, then spiked in the first two years of the pandemic, reaching a high of 1,653 in 2021.
While seeing a decrease is encouraging, Colorado still has a high alcohol-related death rate compared to other states and to itself in 2014, said Dr. Bill Burman, a Denver Health physician and member of the Colorado Alcohol Impacts Coalition.
“We still have a rate of alcohol deaths that is twice the country as a whole and twice the rate a decade ago,” he said.
Colorado’s quiet killer: Alcohol ends more lives than overdoses, but there’s been no intervention
The state could use money from new fees to pay for treatment for uninsured people and those covered by Medicaid, who often struggle to find providers who will take them, or to build treatment infrastructure in areas that lack access, Burman said. It could also partially offset the $70 million the industry spends marketing alcohol with public service messages about the risks of excessive drinking, he said.
The Colorado Beverage Coalition has come out against the bill, which it said would put at risk 131,000 jobs in the alcohol industry and related occupations, such as hops farmers and grocery store checkout workers.
The organization estimated that the industry generates about $22 billion in economic activity in Colorado and pays about $7.2 billion in taxes, including both alcohol-specific taxes and those all businesses pay.
“Increasing taxes on breweries in Colorado would be like Maine lawmakers going after lobster fishermen or Georgia with peach farmers,” Shawnee Adelson, executive director of the Colorado Brewers Guild, said in a news release. “You simply don’t pass job-killing tax increases on a sector that has put you on the map, especially in a way that would go around the will of Coloradan voters.”
The bill leaves some room to adjust the fees, with maximums of 5 cents per gallon of beer, hard cider or apple wine; 7 cents per liter of wine; and 35 cents per liter of spirits.
Assuming that businesses passed the entire fee to consumers, as expected, costs would rise about 3 cents for six 12-ounce beer cans, 5 cents for a standard-sized wine bottle and 26 cents for a fifth of spirits.
Currently, Colorado charges an excise tax of 8 cents per gallon on beer and hard cider and 60.26 cents per liter of spirits. Wine taxation is a bit more complicated, with a base tax of 8.33 cents on all manufacturers, a $10 tax for each ton of grapes they use and an additional surcharge on larger wineries.
Manufacturers or distributors pay the excise tax when they sell alcohol, whether to other businesses or directly to consumers.
In 2024, state excise tax records show manufacturers and distributors sold about 119.8 million gallons of beer and hard cider, 68.5 million liters of wine and 67.5 million liters of spirits in Colorado.
At the proposed rates, the state would have collected about $6 million from beer and hard cider, $4.8 million from wine and $23.6 million from spirits in 2024.
The fees function like taxes, but with the crucial difference that they don’t require voter approval and aren’t subject to the constitutional requirement that the state refund taxpayers when collections increase above a certain amount. Courts have ruled that enterprises are essentially state-run businesses that operate under different rules.
The enterprises would have a governing board that would look for gaps in the state’s alcohol-use disorder prevention and treatment offerings and direct the funds toward programs to close them. Three of the seats on the 11-member board would be reserved for alcohol industry representatives.
The bill’s four sponsors — all Democrats — didn’t respond to questions about the proposal. They are Rep. Jamie Jackson of Aurora, Rep. Jennifer Bacon of Denver, Sen. Judy Amabile of Boulder and Sen. Iman Jodeh of Aurora.
Then-Sen. Kevin Priola, a Henderson Democrat, introduced a bill that would have created similar enterprises in 2024. That bill would have set the fees at 16 cents per gallon for beer, 15 cents per liter for wine and $1.21 per liter for spirits, raising more than $100 million for alcohol use disorder treatment. That bill died in committee in the House.
Generally, when the cost of alcohol rises, people drink slightly less, which can delay or prevent health complications. Young people and people who drink heavily are more likely to cut back if prices go up, Burman said.
A second proposal, House Bill 1301, would raise excise taxes on alcohol to pay for the construction of a new state psychiatric hospital, but its chief sponsor said he’ll likely amend the bill to ask voters to raise the sales tax instead.
Rep. Bob Marshall, a Democrat from Highlands Ranch, said Colorado has some of the lowest alcohol taxes in the country, and raising them seemed an appropriate way to fund mental health care, since many people with serious mental illnesses tend to self-medicate.
But the most important thing is to fund beds for the most severely ill people, and voters may be more likely to approve an increase in the general sales tax, he said.
“I’m not wedded to an alcohol tax,” he said.
This could be a relatively good time to ask for an increase in alcohol taxes, however, because nationwide polling suggests fewer people are drinking regularly, with larger decreases among younger adults, Burman said.
Gallup found last year that 54% of Americans said they drank alcohol at least once in a while, down from 65% in 2019. Those who used alcohol reported an average of 2.8 drinks per week, down from four drinks per week in 2019. The averages include people who sometimes drink, but reported no alcohol in the previous week.
Previously, federal guidelines recommended that men have no more than two drinks per day and women have no more than one. The newest guidelines didn’t include hard limits, though they did recommend that everyone limit consumption.
Studies have reached contradictory conclusions about whether alcohol could have heart health benefits that would partially offset an increased risk of cancer.
“Attitudes about drinking are changing in the United States,” Burman said. “I think the messages about alcohol and its harms are getting through.”
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