Increasing alcohol taxes would hurt businesses

Our state has been through a lot in the last three years. There was a point when I didn’t think my business would be around long enough to see the light at the end of the tunnel.

Now, I finally feel like we are getting to a place where my bar and package store, Win Place & Show, can start growing again. Our state is in a similar situation, with a massive $3.6 billion budget surplus, which represents about 40% of its overall budget. We’re in position to spend wisely and chart a course for growth and opportunity for the future.

While the darkest days of COVID-19 are behind us, we are beginning to feel the threat of a recession on the horizon. You would think politicians in Santa Fe would be looking for ways to protect New Mexicans and small businesses who have already been through so much.

Unfortunately, they’ve decided to make raising alcohol taxes a “top priority” this session. There are a variety of proposals to raise taxes; whether it’s through changes to the overall structure or new fees, they all amount to one thing: making it harder on small businesses that depend on alcohol sales to stay afloat.

It’s especially shortsighted when you think about who will feel these tax increases the most. At an individual level, these taxes are regressive and have the largest impact on those that are least able to afford them. At the business level, the Legislature is trying to pass bills that will harm some of our hardest-hit and most vital sectors of the state’s economy: restaurants and hospitality, which endured some of the harshest COVID-19 restrictions in the nation.

My bar, which brings in about 75% of my business, was shuttered for 407 days during the pandemic.

Once COVID-19 started to subside and business started to get back to some sense of normalcy, more challenges set in. Supply chain issues meant that goods we depended on, even things as simple as bottles, containers and bags, were hard to find. Inflation made them more expensive once we found them. In a low-margin business like ours, those extra few dollars add up quickly.

That’s why it is so confusing that lawmakers are so focused on raising our taxes. When you dig further into it, the logic seems even harder to grasp.

They say they want to raise alcohol taxes to pay for treatment programs. That’s a perfectly acceptable goal, but if that’s what they want to do, why not use the tax dollars they already collect? Currently, half of alcohol taxes go straight to the general fund; couldn’t some of that money go toward treatment programs instead?

Another proposal would allow individual counties to set their own alcohol tax rates. That’s probably not much of a burden if you’re a national chain and have a team of accountants that can manage your compliance needs. However, if you’re a local business like mine and you want to open another location, that extra cost in money and time could make you reconsider.

We’re a tourism state, but if these bills pass, our state will see fewer travelers. Unfortunately, our neighbors will see more as New Mexicans visit Texas and Arizona to spend their discretionary dollars.

Our business has been proud to call Ruidoso home since 1956. We’re confident we will be here for decades to come if we’re given the opportunity to thrive. Lawmakers should give us a break, and drop these ill-considered tax proposals.

Mike Cheney is the owner of Win Place & Show Bar in Ruidoso.