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F I S C A L I M P A C T R E P O R T

SPONSOR Campos

DATE TYPED 2/14/2004 HB 879

SHORT TITLE Liquor Excise Tax Revenue Distribution

SB

ANALYST Taylor

APPROPRIATION

Appropriation Contained Estimated Additional Impact

Recurring

or Non-

Rec

Fund

Affected

FY05

FY06

FY05

FY06

$2,000.0

Recurring Department of Health:

alcohol abuse programs

$1,300.0

Recurring Certain Counties

$1,300.0

Recurring Department of Health:

Detoxification Facility

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

($8,000.0)

($11,200.0) Recurring

General Fund

$8,000.0

$11,200.0 Recurring

Local DWI

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Taxation and Revenue Department (TRD)

SUMMARY

House Bill 879 changes the distribution of liquor excise tax revenues. The share of revenues dis-

tributed to the Local DWI Grant Fund is increased beginning in FY 2006. Additional increases

are provided through FY 2023, at which time all liquor excise tax revenues are allocated to the

DWI Grant Fund. A table summarizing the proposed liquor share of excise tax that would be

distributed to the DWI Grant Fund (the FY05 share represents current law) is presented in the

House Bill 879 -- Page 2

substantive issues section.

Distributions of local DWI grant fund revenues are amended. An additional $2 million is taken

off the top before distribution by formula to the counties. The additional $2 million is appropri-

ated to the department of health to increase health clinic programs associated with substance and

alcohol problems. The funding formula is amended: 84.8 percent of remaining revenue is dis-

tributed according to the current formula (the average of a county’s share of total gross receipts

and a county’s share of alcohol related injury crashes). The remaining 15.2 percent is divided,

with 7.6 percent allocated to counties with the greatest additional need based on a formula to be

developed and 7.6 percent appropriated to the department of health to fund a regional alcohol

detoxification and treatment facility in De Baca County.

The bill has no effective date; provisions are assumed to take effect 90 days after the end of the

2005 legislative session.

FISCAL IMPLICATIONS

Provisions of the bill increasing distributions to local DWI grant fund imply an offsetting de-

crease in state general fund revenues. In FY06, the local DWI grant fund revenues would in-

crease by about $8 million, while the state general fund would decrease by the same amount.

The impact in FY07 grows as the share of revenues diverted to the local DWI grant fund in-

creases. These impacts would continue to increase until FY 2023 at which time all revenues

would have been redistributed to the local DWI grant fund.

The above estimates are derived from current alcohol excise tax revenue estimates. The estimate

for FY06 is $43.4 million in total, with $26.9 million being the general fund share. Increasing

the share DWI share to 53 percent (from 34.6 percent), implies an 18.4 percent increase for the

DWI fund and a commensurate decrease for the general fund. 18.4 percent of $43.4 million is

approximately $8 million.

The appropriations included in the bill would provide $2 million of local DWI grant fund monies

in FY06 to department of health for alcohol and substance abuse programs.

In FY06 total local DWI grant fund revenues would increase from an estimated $16.5 million to

approximately $24.5 million. Subtracting $7.6 million that is appropriated for current programs

and the added money for alcohol programs at the department of health implies that $16.8 million

would be available for distribution by formula. The new formula would appropriate 7.6 percent

of this, or $1.3 million to the detoxification center in De Baca County and another 7.6 percent, or

$1.3 million to counties with the “greatest additional need”.

An additional $3.4 million would be available for distribution to all counties via the formula.

The additional $3.4 million is arrived at as follows: $8 million more to the local DWI grant

fund, less $2 million appropriated to DOH substance and alcohol programs less $1.3 million for

the De Baca detoxification center less $1.3 million for certain counties.

Fiscal impacts in FY07 and later years would increase as the alcohol excise tax revenues grow

(about 2 to 3 percent per year), and as the distribution of revenues to the DWI grant fund in-

crease.

House Bill 879 -- Page 3

ADMINISTRATIVE IMPLICATIONS

TRD reports that the administrative impact to that department would be minimal.

TECHNICAL ISSUES

The bill indicates that additional monies will be appropriated from the local DWI grant fund to

counties with the greatest additional need based on a to be determined formula. It does not indi-

cate who would determine the formula.

OTHER SUBSTANTIVE ISSUES

The following table summarizes the proposed change in the distribution of alcohol excise tax

revenues to the local DWI grant fund. The 34.57 percent share shown for FY05 represents cur-

rent law distribution share to that fund.

Fiscal Year

DWI Fund Share

FY 2005

34.57%

FY 2006

53.00%

FY 2007

60.00%

FY 2008

60.00%

FY 2009

65.00%

FY 2010

65.00%

FY 2011

70.00%

FY 2012

70.00%

FY 2013

75.00%

FY 2014

75.00%

FY 2015

80.00%

FY 2016

80.00%

FY 2017

85.00%

FY 2018

85.00%

FY 2019

90.00%

FY 2020

90.00%

FY 2021

95.00%

FY 2022

95.00%

FY 2023

100.00%

Proposed Liquor Excise Tax Distributions

BT/yr