ABQ Times

Research conducted by the University of New Mexico suggests that increasing alcohol taxes could potentially reduce drunk driving fatalities in the state. According to Alcohol.org, New Mexico ranks among the top five states with the highest number of drunken driving deaths.

The study was led by UNM Economics Professor Brady Horn, alongside graduate student Ana Milan Hinostroza and senior lecturer David Dixon. Their research was part of a Research and Public Service Projects initiative aimed at addressing local issues. The team explored various aspects of alcohol policy, including drinking age laws and liquor licenses, ultimately focusing on alcohol taxes.

“An economist can point out the economic rationale for why we should have alcohol taxes. It’s pretty simple: alcohol causes negative externalities," said Horn. “When there are markets with negative externalities, they produce too much of that good. An alcohol tax can nudge behavior where fewer people will drink alcohol."

Horn's research began after a request from New Mexico State Senator Antonio Maestas for an examination of contemporary economic issues within the state. White papers were published in 2022 and 2023, with Horn presenting his findings to the New Mexico legislature in fall 2024. Reactions were mixed regarding the proposal.

“Everyone agrees we want to reduce the harms from alcohol; some people just don’t think taxation is the way to do it," Horn stated.

Alcohol is taxed differently across states, but New Mexico uses an excise tax model which charges per gallon or liter sold by companies outside the state. "We’re taxing these companies... However, if you tax a company, they will pass some or all of that tax onto consumers," explained Horn.

The research indicates that a proposed 25-cent per-drink tax could decrease alcohol consumption by up to 1.77% and increase revenue by $132 million annually. A hypothetical ten-cent per-gallon increase in beer excise taxes might reduce traffic fatalities related to alcohol by nearly three deaths each year.

Despite acknowledging both benefits and costs associated with alcohol consumption, Horn emphasized its broader social impact: "It’s not just individuals who consume alcohol that will have worse health outcomes... it’s hurting other people.”

According to data from the New Mexico Department of Public Safety, 40% of fatal traffic crashes involve alcohol—making it a leading cause of traffic deaths in the state.

For those struggling with alcoholism or substance use disorders, resources are available through UNM Addiction Recovery Resources and other organizations like Mothers Against Drunk Driving (MADD) and Alcoholics Anonymous (AA).