Oregon’s Task Force on Alcohol Pricing and Addiction Services has submitted its final report to Gov. Tina Kotek, including recommendations for reallocated resources and updated data collection.
Not included in the recommendations: A specific tax increase for wine, beer and hard cider.
The task force, consisting of 16 voting members, was created through House Bill 3610 in the 2023 legislative session to study alcohol addiction and prevention, Oregon’s distribution of resources for treatment, existing funding for programs, the “cost of alcohol addiction to the state,” and the “benefits and drawbacks of imposing taxes on beer and wine.”
The task force is chaired by Rep. Tawna Sanchez, who has been vocal in her desire to increase bev-alc taxes, including proposing a +3,000% increase for beer, from $2.60 per barrel to $72.60 per barrel, in 2021 (H.B. 3296), and a +1,200% increase, to $33.60 per barrel, proposed in 2023 (H.B. 3312).
However, throughout the task force meetings over the past year, Sanchez said the proposals were meant to “get the alcohol industry to come to the table and have a discussion.”
In a forward attached to the final report, Sanchez noted that the task increase proposals were “a bold move, but Oregon’s alcohol-related health crisis had grown too severe to ignore.”
“When I introduced the alcohol tax hike bill in 2021, I knew it would be controversial,” Sanchez wrote. “From the outset, I knew that such a significant tax hike was unlikely to pass, especially on the first go, and given the lingering economic uncertainties following the COVID-19 pandemic.
“Nevertheless, it was not designed for easy passage – it was meant to spark a conversation, with the goal focused on initiating a meaningful discussion. The idea of tax increase holds little appeal. No one likes the idea of a tax increase, and legislators want to avoid being seen as adversaries of small businesses.”
The task force did not “collectively endorse” any specific recommendations. Instead, members submitted individual recommendations, and repeated recommendations were summarized in the final report.
Those recommendations include:
1. ‘Re-allocation of Current Resources for Treatment and Prevention’
One of the greatest concerns shared during task force meetings was where the money Oregon is already receiving for alcohol abuse prevention and treatment is going, with some members alleging some finances have gone unaccounted for, or have been used for unrelated expenses.
Task force recommendations include:
- “Train and educate staff on culturally specific services that acknowledge historical trauma and incorporate traditional healing practices;
- “Prioritize research on the social determinants of alcohol addiction, particularly in rural and marginalized communities where alcohol addiction rates are higher, and individuals face significant barriers in accessing adequate services;
- “Expand access to treatment services, mental health support, and public treatment services especially in underserved communities;”
- And ‘continue funding programs that have demonstrated proven success in reducing addiction rates.”
2. ‘Need for Additional Studies, Better Data Collection and Monitoring on Alcohol Addiction, Prevention, Treatment and Recovery’
Members shared concerns that there is a “lack of a unified data system” that is making it difficult for the state to track the extent of substance use disorder (SUD) in the state, and treatment needs.
To combat this, members recommended the state:
- Integrate “health and criminal justice systems for better data collection practices and sharing to monitor program outcomes;”
- Develop “real-time reporting models that track substance use trends and overdose incidence, as well as show available treatment beds;”
- And use “enhanced data for better coordination of care among different service providers … to help inform treatment strategies and allocate resources effectively.
3. Tax Increases Not Off the Table, But Drawbacks Acknowledged.
Sanchez did not give any specific tax recommendation, but increases are not completely off the table. The report included the “benefits” and “drawbacks” of imposing increases on wine, beer and hard cider.
Members in favor of tax increases claimed that “the low taxes do not reflect the true cost of alcohol-related harms, which include health care and social services.”
“Some members supported a tax increase to fund critical services like youth prevention, local public health initiatives, and additional addiction treatment and recovery services to improve access to essential services,” Sanchez wrote. “These members maintain that increasing taxes could help discourage excessive alcohol consumption and the related harms.”
Members against tax increases noted that “alcohol is the third-largest source of revenue for the state, therefore, the OLCC [Oregon Liquor and Cannabis Commission] should use existing alcohol tax and mark-up revenue to ensure they are adequately enforcing Oregon’s numerous alcohol control laws.”
“Several members expressed concerns that raising taxes might not effectively curb alcohol use and could disproportionately hit low-income consumers already struggling with access to services,” Sanchez wrote. “These members recommend reallocating existing revenues toward proven substance use disorder programs instead [of] raising new taxes.”
The Oregon Beverage Alliance (OBA), a non-profit that advocates for the bev-alc industry, released a statement following the final report emphasizing that the task force could not agree on tax increases and calling it a win for the bev-alc industry.
“Despite only six of 16 voting task force members working in the beverage industry, the task force did not have the votes to recommend increasing taxes, because revenue is not the problem after a nearly $1.4 billion increase in recent SUD funding, it’s a lack of results and accountability from OHA [the Oregon Health Authority] and providers.”
The OBA and bev-alc members of the task force have been outspoken about alleged misinformation and misuse of data and funding at the OHA. Tensions rose earlier this year after a 2021 OHA study on the impact of proposed higher beer and wine taxes was released to the public.
The study found that increased taxes would result in a small decrease in heavy alcohol use, reducing the economic burden by up to $53 million (about 2% of the estimated annual costs). However, the state’s “heaviest drinkers” would only cut their consumption by an estimated 2%, with those consumers more likely to switch to less premium products instead of halting spending.
The controversy around the study is that the results of the tax-focused portion were not published on the OHA website, and have been absent from political discussions about proposed tax raises, The Oregonian reported. Tom Jeanne, OHA deputy state health officer, told the news outlet that the study would have been published under normal circumstances, were it not for a lack of staffing following the COVID-19 pandemic.
When the results of the study finally came to light in January, many members of the bev-alc industry expressed concern over the OHA’s legitimacy and alleged bias, claiming some legislators knew about the full findings of the study, but purposefully hid some of the results – with the help of the OHA – to avoid counteracting their claims that increased taxes would help with addiction issues.
“Chair Sanchez called for accountability for the alcohol sector,” OBA said in its latest statement. “We came to the table and found the lack of accountability is truly with OHA and addiction service providers. OHA has not proven to be a trusted partner and a third-party audit of OHA is warranted.”
OBA shared several other allegations against the OHA, including:
- “Claiming alcohol consumption is up when it’s down;”
- Reporting “excessive and binge drinking is up when these claims are based on improperly comparing CDC [Center for Disease Control] data points before and after a change in the survey methodology;”
- Claiming “substance use disorder rates are increasing when the National Survey of Drug Use and Health (NSDUH) changed methodology in 2020 making all older data incompatible with the most recent data set;”
- Reporting “Oregon is the second worst in the nation in rates of addiction or last in access to recovery services yet when accounting for the NSDUH margin of error there is no significant difference between Oregon and 37 other states according to an internal OHA whistleblower;”
- And claiming that “six Oregonians die from alcohol per day based on death certificates, but it’s actually based on a theoretical model attributing alcohol as a cause of other diseases, not actual death certificates.” OBA also alleged that the OHA “admitted as much when called out, yet continue to make these misstatements.”
“This report marks only the beginning of a longer journey toward addressing alcohol addiction in Oregon,” Sanchez concluded in her own remarks. “As we move forward, it will be crucial for all stakeholders representatives from the Legislature, state agencies, public health advocates, the alcohol industry, local and tribal governments, and state agencies – to remain actively engaged in the process.
“Our shared goal is to develop solutions that support public health, reflect the diverse interests of our communities, and address the complex nature of alcohol addiction, while protecting Oregon’s economy,” she continued. “This effort will require open dialogue and a commitment to taking meaningful steps toward a healthier future.”