Legislature(2017 - 2018)BUTROVICH 205
03/29/2017 01:30 PM Senate HEALTH & SOCIAL SERVICES
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| Presentation: the Economic Costs of Alcohol and Drug Abuse in Alaska | |
| Adjourn |
* first hearing in first committee of referral
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| + | TELECONFERENCED | ||
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ALASKA STATE LEGISLATURE
SENATE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE
March 29, 2017
1:30 p.m.
MEMBERS PRESENT
Senator David Wilson, Chair
Senator Cathy Giessel
Senator Peter Micciche
Senator Tom Begich
MEMBERS ABSENT
Senator Natasha von Imhof, Vice Chair
COMMITTEE CALENDAR
PRESENTATION: THE ECONOMIC COSTS OF ALCOHOL AND DRUG ABUSE IN
ALASKA
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JEFF JESSEE, Legislative Liaison
Alaska Mental Health Trust Authority
Anchorage, Alaska
POSITION STATEMENT: Commented on the Economics Costs of Alcohol
and Drug Abuse in Alaska report that was commissioned by the
Alaska Mental Health Trust Authority.
DONNA LOGAN, Vice President-Anchorage Operations
McDowell Group, Anchorage, Alaska
POSITION STATEMENT: Presented the Economic Costs of Alcohol
Abuse in Alaska report.
ACTION NARRATIVE
1:30:54 PM
CHAIR DAVID WILSON called the Senate Health and Social Services
Standing Committee meeting to order at 1:30 p.m. Present at the
call to order were Senators Begich, Giessel, Micciche, and Chair
Wilson.
^PRESENTATION: The Economic Costs of Alcohol and Drug Abuse in
Alaska
PRESENTATION: The Economic Costs of Alcohol and Drug Abuse in
Alaska
1:31:21 PM
CHAIR WILSON announced that the committee will hear a
presentation on the economic cost of alcohol and other drug
abuse in Alaska.
1:32:11 PM
JEFF JESSEE, Legislative Liaison, Alaska Mental Health Trust
Authority, Anchorage, Alaska, provided an introductory overview
of the McDowell Group's report as follows:
The Alaska Mental Health Trust has been interested in
the economic costs of alcohol and drug abuse in Alaska
for a number of years. The McDowell Group is an
independent organization dedicated to objective
research in a number of areas. I want to stress that
we did not direct them to come up with any
predetermined answer; in fact, you will see some data
in here that was a surprise even to the trust, but we
feel this is important work because it starts to
quantify what the cost to all of Alaskans are to
alcohol abuse and drug abuse.
The numbers are quite staggering. The economic cost
alcohol abuse alone is $1.8 billion, the cost of drug
abuse is $1.2 billion; together that's $3 billion in
costs. Now that includes lost productivity, traffic
accidents, health-care costs, criminal justice costs,
child-protection costs, the impacts of alcohol and
drug abuse are felt across the entire economy both at
the private sector and in the public sector as well.
We think that as you are making difficult decisions
around the budget looking at how to reduce the cost to
the state, different parts of government, that at
least arguably are trying to do something positive for
the state, we need to start really looking at this
area of cost and how do we drive down this cost of
alcohol and drug abuse. To put this in perspective,
the entire alcohol tax produces just less than $40
million a year, that's a $40 million tax to try to
deal with a $1.8 billion problem. The tax has not been
increased since 2002, it was not inflation proofed,
and those funds buy considerably fewer services today
than they did 15 years ago.
1:34:31 PM
DONNA LOGAN, Vice President-Anchorage Operations, McDowell
Group, Anchorage, Alaska, commenced with the McDowell Group's
report and addressed the purpose of the report. She explained
that the report is the subject matter's fourth generation with
improved information that more accurately reflects the economic
costs than what was done previously.
She set forth that there are costs associated with alcohol abuse
and the cost can be tangible and intangible. She explained that
tangible costs examples are medical costs and loss of property.
She added that intangible cost would include quality of life
issues and pain and suffering. She pointed out that the $1.8
billion that Mr. Jesse noted does not include the intangible
costs associated with alcohol abuse.
She referenced the many adverse health and social consequences
from alcohol abuse as follows:
· Increased health care costs - injuries and chronic health
conditions.
· Property damage - fire and motor vehicle collisions.
· Increased crime and criminal justice system costs.
· Lost or reduced worker productivity - absenteeism,
diminished output while at work, and reduced earnings
potential.
· Increased public assistance and social services - social
welfare support.
· Increased public sector costs - alcohol-attributable
expenditures.
1:36:55 PM
She addressed page 3 in her presentation, "Why Understanding the
Economic Costs Matters" and referenced the following:
· Assessment of the extent of the problem.
· Valuable insights into factors that may influence alcohol
abuse and its adverse effects.
· Inform planning and implementation of prevention
strategies.
· Assessment of the cost of prevention strategies relative to
the cost of alcohol-attributable harms.
· Builds awareness of the public/private sector costs.
MS. LOGAN remarked that everyone is aware of the public costs
associated with alcohol abuse, but emphasized that alcohol abuse
is quite a cost to the state's employers as well.
1:38:04 PM
SENATOR GIESSEL addressed fetal alcohol syndrome (FAS) and noted
that legislation was recently put into effect that put pregnancy
testing into restrooms of alcohol establishments. She asked if
the impact from the restroom testing program was part of the
McDowell Group's analysis.
MS. LOGAN replied no. She noted that the McDowell Group did
capture some of the impacts related to fetal alcohol spectrum
disorder (FASD) that will be addressed in her presentation.
MR. JESSE added that research evaluation done for the program
Senator Giessel referenced was done by the Institute for
Circumpolar Health Research. He pointed out that results from
the research are available and opined that the program was
incredibly successful.
SENATOR GIESSEL commented that the report Mr. Jesse referenced
would be beneficial for committee members to hear what the
results are because the pregnancy testing program was initiated
by the Senate.
MS. LOGAN referenced the report's methodology with regard to
alcohol consumption and noted that the National Survey of Drug
Use and Health (NSDUH) was used for the report. She specified
that the survey captures ages 12-plus without mixing data
sources which makes modeling easier. She added that NSDUH is a
rigorous survey with close to 1,000 households surveyed in
Alaska on an annual basis. She noted that surveyors go into
household, selection is random, and a good cross section is
surveyed throughout the state. She added that surveyors are
trained to do some clinical diagnosis work which enables
reporting on alcohol dependence and alcohol abuse.
1:41:58 PM
She referenced the methodology used for modeling productivity
losses as follows:
· Mortality Causes and Potential Years of Life Lost (PYLL):
Health Analytics and Vital Reports and Alcohol-Attributable
Fractions (AAF).
· Incarceration: Department of Corrections (DOC) data and
Alcohol attributable rates from the Lewin Group's 2010
report, "Economic Cost of Excessive Alcohol Consumption in
the United States, 2006."
· Diminished Productive Causes: Lewin report adjusted for
Alaska's demographics (Alaska Department of Labor and
Workforce Development, American Community Survey (ACS), and
the National Survey on Drug Use and Health (NSDUH)).
· Hospitalization and Treatment Causes: Alaska Hospital
Facilities Data Reporting Program (HFRP), Alaska Department
of Labor and Workforce Development, and AAF.
1:43:21 PM
SENATOR MICCICHE stated that Alaska is different and commended
Ms. Logan for the use of data from Alaska. He asked how national
data is adjusted for a state with a "challenged demographic"
that has higher health-care costs per capita and more domestic
violence, sexual assault, alcoholism, and suicide rates.
MS. LOGAN admitted that the McDowell Group was reliant on
national models with the knowledge that the Alaska experience
was not captured, but Alaska inputs did go into the models that
helped make allowances for some of the differences such as wage
rates and population. She agreed that an Alaskan model would be
better than the national models.
MR. JESSE remarked that the feeling was the reported costs were
"under estimated" and that part of the thinking was for the
report to be a conservative estimate with "just the facts" for
an accurate picture without exaggeration.
SENATOR MICCICHE noted that his next question was addressed by
Mr. Jesse regarding "what side of the horizon" the state's
numbers fell in the report, conservative or liberal.
MS. LOGAN stated that she would point out some of the
limitations in the report and why the numbers are considered
conservative.
1:45:53 PM
MS. LOGAN continued to address the report's methodology and
detailed as follows:
· Criminal Justice and Protective Services:
ƒOffenses and Arrests: Department of Public Safety
(DPS), FBI, and Lewin Group's alcohol attributable
rates.
ƒCriminal Justice System: HIH report, "The Cost of
Crime to Society: New Crime-Specific Estimates for
Policy and Program Evaluation," and Lewin Group's
report.
ƒCriminal Victimization: Bureau of Justice Statistics,
Alaska Department of Labor and Workforce Development
(DOLWD) and the American Community Survey (ACS), and
Lewin Group's alcohol attributable rates.
ƒProtective Systems: "National Survey of Children and
Adolescent Well-Being," National Data Archive on Child
Abuse and Neglect, Office of Special Counsel (OSC),
National Institute on Drug Abuse (NIDA).
· Health Care:
ƒInpatient, Emergency Department (ED), and Outpatient
Costs: HFDR, NIDA, and Lewin Group's AAF.
ƒTreatment for Alcohol Abuse: Division of Behavioral
Health (DBH) and Medicaid.
ƒSkilled Nursing and Long Term Care: NIDA and Alaska
Department of Senior and Disabilities Services (DSDS).
ƒFAS/FASD-BVS and Health Analytics, Vital Reports, and
Canadian Study, "The Burden of Prenatal Exposure to
Alcohol: Revised Measurement of Costs.
1:47:39 PM
MS. LOGAN continued to address the report's methodology and
detailed as follows:
· Public Assistance and Social Services:
ƒFederal Government Costs: NIDA and Old Age, Survivor
and Disability Insurance (OASDI), Supplemental
Security Income (SSI), Temporary Assistance for Needy
Families (TANF), and Supplemental Nutrition Assistance
Program (SNAP).
ƒState Government Costs: NIDA and Division of Public
Assistance (DPA).
· Underage Drinking:
ƒPacific Institute of Research and Evaluation (PIRE)
2010 study on Underage Drinking in Alaska adjusted to
2016 dollars.
· Jobs/Income in Alaska's Alcoholic Beverage Manufacturing
and Sales:
ƒDepartment of Labor and Workforce Development.
· Alcoholic Beverage Tax:
ƒDepartment of Revenue.
· Implications for Alcohol Abuse Impacts on State GF Budget:
ƒPrevention Grants (DHB), Justice System (Court
System).
1:49:23 PM
MS. LOGAN referenced a graph on "Alcohol Consumption Patterns
(2013-2014). She noted that the national survey was used where
1,000 Alaska households were surveyed. She referenced the
consumption data patterns as follows:
· Current Alcohol Use (Ages 12+ within the last 30 days):
ƒAlaska: 54 percent;
ƒU.S.: 52.4 percent.
· Binge Alcohol Use (Male: 5 or more drinks in one sitting
within the last 30 days):
ƒAlaska: 22.9 percent;
ƒU.S.: 22.9 percent.
· Alcohol Dependence or Abuse in Past Year (Having a drink
within the last year and meet at least three-clinical
criteria that suggests dependency, meeting one-clinical
criteria suggests abuse. Criteria may include: withdrawal,
persistent desire, loss of activities, and reoccurring
psychological problems):
ƒAlaska: 6.7 percent;
ƒU.S.: 6.5 percent.
· Alcohol Dependence in Past Year:
ƒAlaska: 3.2 percent;
ƒU.S.: 3.0 percent.
She pointed out that Alaska is not statistically different than
what is found elsewhere in the country, something that may be
surprising to people.
1:52:28 PM
She addressed "Alaskan Alcohol Consumption (2013)" and detailed
as follows:
· 313,000 drank alcohol within past 30 days.
· 39,000 experienced alcohol dependence or abuse in past
year.
· 19,000 experienced alcohol dependency in past year.
· Nationally, Alaska ranked:
ƒ31st for binge drinking,
ƒ26th for current alcohol use,
ƒ21st for alcohol dependence use,
ƒ20th for alcohol dependence or abuse.
MS. LOGAN reviewed estimated data for "Current Alcohol Use (age
12+), by Age Group" as follows:
· Ages 12-17:
ƒAlaska: 9.2 percent;
ƒU.S.: 11.6 percent.
· Ages 12-20:
ƒAlaska: 21.5 percent;
ƒU.S.: 22.8 percent.
· Ages 18-25:
ƒAlaska: 59.7 percent;
ƒU.S.: 59.6 percent.
· Ages 12 or Older:
ƒAlaska: 54.0 percent;
ƒU.S.: 52.4 percent.
· Ages 18 or Older:
ƒAlaska: 59.1 percent;
ƒU.S.: 56.7 percent.
· Ages 26 or Older:
ƒAlaska: 59.1 percent;
ƒU.S.: 56.2 percent.
1:54:48 PM
She reviewed "Per Capita (age 14+) Consumption (2013)" as
follows:
· 1.6 million gallons of ethanol consumed in Alaska,
including consumption by residents and non-resident
visitors.
· Alaska per capita consumption (2.73 gallons):
ƒBeer: 1.06 gallons of ethanol;
ƒWine: 0.52 gallons;
ƒLiquor: 1.16 gallons.
· Average U.S. ethanol consumption: 2.34 gallons per capita
(2013).
· Alaska consumption increased slightly in 2014, to 2.79
gallons per capita.
1:56:07 PM
SENATOR MICCICHE asked for clarification on the "Current Alcohol
Use (age 12+), by Age Group" and pointed out that Alaska showed
both below and above average percentages versus U.S.
percentages.
MS. LOGAN explained that statistically the percentages are not a
statistical difference. She noted that over time, the state's
underage drinking is trending down.
1:58:02 PM
She revealed that looking at consumption trends over time, the
height of consumption was in 1981. She added that the state's
consumption has been flat over the past 20 years.
CHAIR WILSON asked if quarterly data is available from the
Department of Revenue to breakdown visitor versus resident
alcohol consumption.
MS. LOGAN replied that quarterly information might be available
in order to look at seasonal-alcohol consumption.
2:00:03 PM
She addressed "Total Economic Costs of Alcohol Abuse - $1.84
Billion" and referenced data as follows:
· Productivity Loss: $775 million, 42 percent;
· Traffic Collisions: $594.3 million, 32 percent:
ƒMedical: $38.5 million;
ƒEmergency services: $0.02 million;
ƒMarket productivity: $81.4 million;
ƒHousehold productivity: $22.6 million;
ƒInsurance administration: $9.3 million;
ƒWorkplace costs: $1.6 million;
ƒLegal costs: $12.8 million;
ƒCongestion costs: $1.3 million;
ƒProperty damage: $4.9 million;
ƒDirect costs: $172.5 million.
ƒ5.5 percent of all traffic collisions are caused by
alcohol or drug impairment. 704 collisions occurred in
the modeled year, equating to 1,690 occupants that
were affected in the vehicles. Occupants also include
pedestrians.
· Criminal Justice and Protective Services (2014): $270
million, 15 percent:
ƒ9,400 alcohol-related arrests and offenses.
ƒAlcohol-related arrests and offenses represented 25
percent of the total offenses.
ƒ7,300 victims of alcohol-related arrests and offenses,
representing 17 percent of the total crime victims.
ƒCriminal Justice System: $136.2 million, many are
borne by the public sector and includes: police,
firefighters, and court system.
ƒCrime victim tangible costs: $58.2 million.
ƒTheft was the number-one crime related to alcohol:
2,400 offenses.
ƒDriving under the influence (DUI) was the second-most
crime related to alcohol.
ƒAssault was the third-most crime related to alcohol.
ƒDUI is the number-one cost associated with alcohol,
approximately $42 million.
ƒHomicide is the number-one victim cost associated with
alcohol, $25 million.
ƒAssault is the number-two victim cost associated with
alcohol, $14 million.
ƒChild protective services has impacts on families,
approximately 40 to 80 percent of the cases of
children going into foster care that are affected
because of alcohol or drugs.
ƒCrime victim intangible costs: $604.9 million, related
to quality of life issues, and pain and suffering.
· Health Care: $182 million, 10 percent:
ƒMedical inpatient: $85.4 million, 48 percent;
ƒMedical inpatient admissions: 2,200 in 2015, equates
to 10,000-bed days in the hospital;
ƒMedical emergency department (ED): $32.7 million, 18
percent;
ƒMedical ED visits: 15,800;
ƒMedical outpatient in a hospital setting: $22.6
million, 12 percent;
ƒAlcohol/Drug treatment: $25.9 million, 14 percent;
ƒAlcohol/Drug treatment admissions: 5,000, equates to
14,500-bed days;
ƒAlcohol/Drug treatment Medicaid payments: $12.6
million out of the $25.9 million was funded by
Medicaid;
ƒPrescription drugs to treat alcohol abuse or other
medical conditions related to alcohol abuse: $10.7
million, 6 percent;
ƒNursing Home/Long-term care (LTC): $1.5 million, 1
percent;
ƒFetal Alcohol Spectrum Disorders (FASD): $3 million, 2
percent; the modeling does not capture children
diagnosed for FASD after birth.
· Public Assistance: $14.5 million, 1 percent.
ƒFederal social welfare: $9.4 million, 65 percent;
ƒState social welfare: $5.1 million, 35 percent.
2:04:11 PM
SENATOR MICCICHE asked to address methodology and inquired how
the dollar amount was determined for the homicide-related costs
from alcohol.
MS. LOGAN replied that national models were used, primarily with
the Lewin Group's attribution percentages based on specific
crimes. She detailed that the Lewin Group's modeling indicates
that 47 percent of criminal homicide is related to alcohol.
2:08:35 PM
CHAIR WILSON asked to address the alcohol and drug treatment. He
inquired if the treatment was inpatient.
MS. LOGAN surmised that the treatment was inpatient.
MR. JESSE detailed that alcohol and drug treatment would include
the grants that are made specifically for treatments. He noted
that the Medicaid outpatient is not included because mental
health and substance abuse was integrated, and the Medicaid
codes cannot be "peeled" apart into whether the unit-of-service
was for a mental-health issue or a substance-abuse issue.
MS. LOGAN added that the McDowell Group was able to look at the
enrollments for treatment from 24-hour detox, residential,
outpatient, and outpatient opioid. She summarized outpatient and
residential were included.
2:12:04 PM
SENATOR BEGICH asked to address FASD. He inquired whether
children that are identified for FASD post-birth would be
captured in other categorical areas.
MS. LOGAN concurred that some may be captured due to medical
issues, but not to the full extent of what the impacts are on
schools with special education, etc.
SENATOR BEGICH asked to confirm that the post-identified FASD
children are not captured in the categories defined by the
McDowell Group.
MS. LOGAN answered correct.
2:14:03 PM
She addressed "Underage Drinking - $350 Million" and detailed as
follows:
· In 2013-2014:
ƒUnderage Drinkers: 9 percent of Alaskans age 12-17 and
22 percent of Alaskans age 12-20.
· In 2010, PIRE estimated annual costs from underage Alaskan
drinkers at $350 million (2016$).
ƒYouth violence represents $168 million, 48 percent of
underage drinking costs, followed by youth traffic
accidents that represents $99 million, 28 percent of
underage drinking costs.
2:16:45 PM
CHAIR WILSON asked to address the medical cost related to
traffic collision. He inquired if the medical cost was separate
from the medical in the health care category.
MS. LOGAN answered yes.
2:18:07 PM
She addressed "Productivity Losses - $775.1 Million" and noted
that productivity is the number-one economic cost from alcohol
abuse. She detailed productivity losses as follows:
· Premature death (primary diagnosis): $581 million, 75
percent;
· Premature death reasons:
ƒLiver disease: 285 deaths in 2015, 191 were men;
ƒSuicide;
ƒOther poisonings;
ƒAlcohol poisoning;
· Incarceration: $41.5 million, 5 percent:
ƒApproximately 1,000 inmates are in prison due to
alcohol-related offenses;
ƒOne third of inmates are in prions due to alcohol-
related offenses;
· Diminished productivity: $145.6 million, 19 percent;
· Substance abuse treatment: $1.5 million, 0.2 percent;
· Medical conditions: $5.0 million, 1 percent.
2:22:06 PM
SENATOR BEGICH asked to address substance-abuse treatment. He
pointed out that productivity is lost when a person is in
treatment. He asked if the lowering of the premature death
number and a decrease in the incarceration are captured in the
modeling. He specified that a trade-off occurs.
MS. LOGAN replied that Senator Begich may be right, but the
McDowell Group did not do the analysis that Senator Begich
hypothesized.
MR. JESSE remarked that Senator Begich was absolutely right. He
said the noted productivity trade-off would be preferred over
the other costs.
MS. LOGAN referenced the "State Alcoholic Beverages Tax -
Volume" from 1997 to 2015. She referenced a graph that showed a
relatively stable volume taxed at 16 million to 18 million
gallons from 1997 to 2015.
SENATOR BEGICH pointed out the tax-revenue explosion that
occurred from small breweries that started in 2003.
2:24:55 PM
SENATOR GIESSEL recounted that Ms. Logan referenced 1981 as the
highest alcohol consumption year and noted that 1981 was when
the first permanent dividend check was issued.
MS. LOGAN referenced the "State Alcohol Beverage Tax Revenue
(FY1997 - FY2015)" and noted the tax revenue in FY2015 was $37.5
million. She detailed that the per capita tax revenue is $24.82.
She noted that the tax law changed in 2003 where a split
occurred between revenue retained in the general fund and
revenue allocated to the Alcohol and Drug Abuse Treatment and
Prevention Fund.
MR. JESSE added that sometimes there is a misapprehension that
because only half of the alcohol tax goes into Alcohol and Drug
Abuse Treatment and Prevention Fund that that is the only money
that is spent on alcohol and drug abuse treatment and
prevention; however, that is not the case. He detailed that more
than $40 million was spent on alcohol and drug abuse from a
combination of the Alcohol and Drug Abuse Treatment and
Prevention Fund and the general fund.
2:27:58 PM
MS. LOGAN addressed "Local Government Alcohol Tax Sales, 2015"
and noted that close to $5 million was captured locally. She
noted that the Municipality of Anchorage and the Matanuska-
Susitna Borough where not included in the data.
MR. JESSE added that there are some significant statutory
limitations placed in state law that restricts the ability of
local governments to tax alcohol separately or to tax alcohol at
a rate higher than they tax other commodities which is also a
policy issue that may want to be addressed.
MS. LOGAN noted that there is a benefit that comes from the
alcohol sector and that is on jobs and payroll. She disclosed
that the benefits are not costs to the economy, but the McDowell
Group wanted to include the benefit in the report. She detailed
that in 2014 there were 2,900 jobs related to the alcohol
beverage sector and that includes individuals who work in bars,
drinking establishments, alcohol-retail, alcohol-wholesale, and
beverage manufacturing as well. She noted that the 2,900 jobs
equates to over $66 million in payroll.
SENATOR GIESSEL asked if tips were included in the alcohol
drinking places.
MS. LOGAN answered no.
2:30:52 PM
SENATOR MICCICHE commented that the wages are very low, and the
low wages is part of the committee's discussion. He opined that
alcohol is an important part of Alaska's economy, but the intent
of committee is to make alcohol a positive economy instead of a
negative economy. He said part of the economic cost of alcohol
abuse also provides good jobs for those that are trying to set
the lives straight of those that are trapped in the web of
alcoholism and abuse. He asked how the McDowell Group went on
both sides of the fence.
MS. LOGAN replied that the McDowell Group did not do a full-
economic analysis of the labor force that included involvement
in treatment, medical, and insurance.
MR. JESSE disclosed that another McDowell report will be
released that was commissioned by the Alaska Mental Health Trust
Authority that looks at the economic impact of alcohol taxes. He
detailed that the report looks at the impact of raising the
alcohol tax. He explained that raising the alcohol tax would
have a negative impact on the industry in addition to lowering
consumption due to higher prices; however, reinvesting the tax
dollars would result in people being employed to provide
treatment to people that were struggling with alcohol. He noted
that the jobs provided by an increase in alcohol taxes
significantly exceeds the number of jobs that would be lost.
2:33:14 PM
SENATOR MICCICHE asserted that he will never call something an
economic benefit that is on the backs of human misery a positive
thing; however, he emphasized that no committee members were
talking about that. He said his statement was his attempt to put
the report in context so that he could understand. He reiterated
that the wage numbers related to the alcohol industry looks very
low when consideration is given to tourism, restaurants, and
package stores across the state.
MS. LOGAN replied that many of the jobs are likely part-time
jobs as well.
SENATOR GIESSEL asked Mr. Jesse how he knows that increasing the
tax on alcohol decreases consumption. She inquired if Mr.
Jesse's comment was based on a study.
MR. JESSE replied that there have been extensive studies about
the price elasticity around alcohol and in fact, the greatest
price sensitivity to consumption is among under-aged drinkers.
He disclosed that the upcoming report will include data on
decreased consumption.
SENATOR GIESSEL agreed with Mr. Jesse's observation on under-
aged drinkers, but asked about the impact of higher taxes on
adult drinkers.
MR. JESSE answered that higher taxes would have an impact on
older drinkers as well. He set forth that the Alaska Mental
Health Trust Authority believes in presenting the facts and the
fact is there will be some reduction in consumption and that
will have an economic effect on the industry. He asserted that
the Alaska Mental Health Trust Authority intends to be fair and
honest. He revealed that in Canada and some states have looked
at and or implemented minimum pricing where alcohol cannot be
priced below a certain price point in order to prevent very low-
cost alcohol.
2:36:22 PM
MS. LOGAN "Jobs and Wages - Alcoholic Beverage Sector, 2014" and
detailed as follows:
· Total Jobs: 2,887:
ƒAlcohol Drinking Places: 55 percent;
ƒAlcohol-Retail: 23 percent;
ƒBeverage Manufacturing: 12 percent;
ƒAlcohol-Wholesale: 9 percent.
· Total Wages: $66.4 million:
ƒAlcohol Drinking Places: 41 percent;
ƒAlcohol-Retail: 22 percent;
ƒBeverage Manufacturing: 20 percent;
ƒAlcohol-Wholesale: 17 percent.
MS. LOGAN summarized on the cost of alcohol abuse in Alaska as
follows:
· $1.84 billion: total costs of alcohol abuse (2016),
· $66.4 million: total Alaska's alcoholic beverage sector
payroll (2014),
· $37.6 million: total Alaska alcohol beverage tax revenue
(FY2015),
· $4.9 million: local government alcohol sales tax revenue
(2015).
2:38:29 PM
She addressed "The Economic Costs of Drug Abuse in Alaska,
2016." She provided details on "Illicit Drug Use, 2013 - 2014"
as follows:
· Current Illicit Drug Use:
ƒAlaska: 13.2 percent,
ƒU.S.: 9.8 percent.
· Past Marijuana Use:
ƒAlaska: 19.6 percent,
ƒU.S.: 12.9 percent.
· Current Marijuana Use:
ƒAlaska: 11.9 percent,
ƒU.S.: 8.0 percent.
· Current Drug Use Other than Marijuana:
ƒAlaska: 3.5 percent,
ƒU.S.: 3.3 percent.
· Past Cocaine Use:
ƒAlaska: 1.5 percent,
ƒU.S.: 1.7 percent.
· Past Nonmedical Pain Reliever Use:
ƒAlaska: 4.4 percent,
ƒU.S.: 4.1 percent.
· Illicit Drug Dependence or Abuse Past Year:
ƒAlaska: 3.2 percent,
ƒU.S.: 2.6 percent.
· Illicit Drug Dependence Past Year:
ƒAlaska: 2.2 percent,
ƒU.S.: 1.9 percent.
MS. LOGAN provided details on "Illicit Drug Use, 2013 - 2014" as
follows:
· 77,000 Alaskans used illicit drugs within the past 30 days:
ƒ69,000 consumed marijuana,
ƒ20,000 used other illicit drugs.
· 26,000 Alaskans used pain relievers for non-medical
purposes in the past year.
· 13,000 Alaskans are dependent on illicit drugs.
· Marijuana consumption is the only drug in Alaska
statistically different than U.S.:
ƒ12-percent Alaskans used marijuana in past 30 days
versus 8 percent in the U.S.
ƒ20-percent Alaskans used marijuana in past year versus
13 percent in the U.S.
She addressed the "Total Economic Costs of Drug Abuse - $1.22
Billion" as follows:
· Productivity Loss: $542 million, 45 percent;
· Traffic Collisions: $396 million, 33 percent;
· Criminal Justice and Protective Services: $136 million, 11
percent;
· Health Care: $134 million, 11 percent;
· Public Assistance and Social Services: $7 million, 1
percent.
2:41:12 PM
She addressed "In Conclusion" regarding the cost of alcohol and
drug abuse in Alaska as follows:
· $1.84 billion: total economic costs of alcohol abuse
(2016).
· $1.22 billion: total economic costs of drug abuse (2016).
· $3.10 billion: total combined economic costs of alcohol and
drug abuse in Alaska (2016).
MR. JESSE specified that the report was not designed to in
anyway indict the industry. He noted that Senator Micciche
pointed out that the alcohol industry is an important economic
part of Alaska's economic system. He remarked that if everyone
drank responsibly then there would not be virtually any of the
negative costs; however, the fact is that alcohol is a very
highly abused product and as a result there are very substantial
economic costs across Alaska.
He set forth that the Alaska Mental Health Trust believes that
it is important to look at the data from the report because the
$3.1 billion is almost identical to the entire fiscal gap that
the Legislature is struggling with.
SENATOR MICCICHE agreed with Mr. Jesse and noted that the
industry is just as concerned with the demographics. He said to
Mr. Jesse, "I certainly did not take it that way by any means
whatsoever." He asserted that the industry is an important part
in the state. He pointed out that many Alaskans are struggling
with substance abuse and that was the focus of not only reducing
the economic cost, but the social and cultural costs as well, a
point that he takes from the numbers on the negative dollar
impacts. He clarified that he understood the value of the study.
2:43:45 PM
MR. JESSE stated that from the Alaska Mental Health Authority's
perspective, the economic costs are very important; but, it is
the impact of the substances on the Alaska Mental Health
Authority's beneficiaries in terms of its impact on their lives
and quality of life.
SENATOR BEGICH commented that his hope is that in future work
the relationship between the treatment dollars spent and the
impact in producing the numbers can be shown. He noted that a
substantive baseline has been set that can be used in future
years to show the relationship between investment and the impact
on the costs to society. He commented that there is a direct
relationship between addressing the issues and ultimately
reducing the costs in the long run. He set forth that the report
is a great work for a starting point.
2:46:01 PM
SENATOR MICCICHE commented that he is worried that the attention
given to the opioid crisis that a "shiny thing" effect will
occur that detracts from alcohol abuse's impact on Alaska. He
opined that applying the social cost to alcohol abuse would
create a much wider spread between alcoholism and other
substances. He opined that alcohol is still easier, socially
acceptable and a problem that many Alaskans have their entire
lives. He summarized that alcohol underlies as the number-one-
social cost in the state.
SENATOR GIESSEL opined that looking further there would be a
finding of concurrent use and potentiation from alcohol's effect
on the individual. She stated that correlating concurrent use
would be interesting.
MR. JESSE replied that Senator Micciche's point is well made. He
shared his personal experience with alcoholism. He stated that
many people struggle with alcohol, but remain anonymous.
CHAIR WILSON thanked the presenters.
2:49:56 PM
There being no further business to come before the committee,
Chair Wilson adjourned the Health and Social Services Committee
at 2:49 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| McDowell Presentation SHSS 3.29.17.pdf |
SHSS 3/29/2017 1:30:00 PM |
SHSS McDowell Presentation 3.29.17 |