How the State of Oregon Deceived Everyone About Alcohol Taxes and Over Consumption

Buried report shows higher alcohol taxes won't impact excessive consumption

This is a story of a government-led effort in Oregon to bury information from the light of day that, if published, would harm the narrative of those who want to raise taxes on beer, wine, and cider by more than 1000%.

In early 2021, a report commissioned by the Oregon Health Authority sought to estimate the monetary cost of excessive alcohol use in the state of Oregon. Research consultants at EcoNorthwest consulting firm undertook this task and concluded in an interim report issued in January 2021 that in 2019 excessive alcohol use cost Oregon $4.8 Billion.

These findings were widely circulated. Moreover, the report was used by advocates of huge tax increases on beer and wine such as Oregon Representative Tawna Sanchez to justify the tax increase to reduce excessive alcohol consumption in the state.

But that wasn’t the final word. EcoNorthwest was also commissioned to determine if higher taxes on wine, beer, and cider could reduce excessive alcohol use. That part of the report was finished and delivered to the Oregon Health Authority in September 2021. This final report and its findings were not widely circulated. In fact, this final report was not released publicly at all. Why?

The Oregonian, which has seen the final report, wrote an exposé on the unpublished report and identified one reason why the Oregon Health Authority appears to have buried this report:

“The study found that increasing Oregon’s excise tax on beer and wine could raise hundreds of millions for the state and reduce public alcohol consumption overall – but that taxes would barely reduce consumption by Oregon’s heaviest drinkers, who disproportionately drive the high societal costs of alcoholism.”

I was able to obtain this final report also. Let me quote directly from it on the question of how increased excise taxes on beer, wine, and cider will impact excessive alcohol use in Oregon.

I should note, in examining the impact of higher taxes, the authors of the report assumed a 2,444% increase in the beer excise tax and a 644% increase in the wine excise tax (That is not a joke).

The report notes the conclusions of the most recent studies on how alcohol prices impact heavy drinking and binge drinking:

“the existing evidence does not clearly support the idea that higher prices will lead to a meaningful reduction in alcohol consumption among heavy or binge drinkers—populations that generate a disproportionate share of the economic cost of alcohol consumption.”

The report then offers its own conclusions concerning the impact on heavy drinking in Oregon if excise taxes on Beer and wine were increased by 2,444% and 644% respectively:

“that tax itself would likely have a minimal effect on drinking behavior in the highest deciles of drinkers. We estimate that individual consumption of the heaviest drinkers…would decline by 2%. For the heaviest drinkers we still expect that a price increase would put downward pressure on consumption. However, given the price insensitivity of this group and a higher likelihood of substituting to other beverages, we expect that additional interventions would be needed to achieve the policy goal of harm reduction for the heaviest drinkers.”

The report also notes how these sorts of tax increases will impact moderate drinkers:

”Consumers who drink relatiely little alcohol tend to be more price sensitie and likely to reduce their consumption at proportionally ighr rates relative to the median drinker. For these drinkers, a tax increase appears to be quite effective at nudging behavior away from alcohol consumption. At the same time, this group accounts for a small share of aggregate reduction in consumption and imposes little public cost.

It’s important to remind the reader that this final report on the impact of tax increases on alcohol was delivered to the Oregon Health Authority in September 2021. This final report did not replace the interim report that was published on the Oregon Health Authority web page. It was not published alongside the interim report on the Oregon Health Authority webpage. It was not mentioned by the Oregon Health Authority in any public statements. Nor was the report referenced or mentioned by anyone else in the private or public sector. In fact, the only mention of these findings prior to the Oregonian writing their recent article came in July 2021 (before the final report was delivered to the Oregon Health Authority) when the authors of the report gave a presentation at the Law & Mental Health Conference where they previewed their initial findings.

Throughout 2022 nothing was said about the the report sent to the Oregon Health Authority that declared significant tax increases would do little or nothing to curb problem drinking. But this isn’t to say that the Oregon Health Authority didn’t have that opportunity.

At a televised KATU Recover Northwest Town Hall, Dr. Tom Jeanne, the Deputy State Health Officer at the Oregon Health Authority was asked about proposals to raise taxes on alcohol.

“We know that higher prices reduce purchasing and use of substances like alcohol….Our role at the Oregon Health Authority is to provide solid information and data so that lawmakers and the Governor can make sound decisions.”

Dr. Jeanne said this after having a report in his hand for over a year saying that increased taxes would do little or nothing to reduce consumption among problem drinkers. What would his response to this question have been had the public been notified of this report a year earlier? Would have have stared into the camera and contradicted what the report said?

More importantly, throughout 2023 the question of raising Oregon alcohol taxes was front and center as another proposed tax increase (HB 3312) was introduced in the legislature. Again, the proposal increased taxes by a clownishly high amount. But throughout the debate on this bill, not once did anyone mention the report saying that increased taxes would do little or nothing to reduce consumption among problem and excessive drinkers. The bill died.

In its stead was introduced a bill that would create a task force to examine alcohol pricing and addiction services. At the hearing on this bill, Dr. Jeanne of the Oregon Health Authority testified. While he mentioned the $4.8 billion in annual costs that are related to excessive alcohol consumption that was initially determined in the interim report he received in January 2021, Dr. Jeanne did not mention that the final report noted that little or no impact on excessive consumption of alcohol would result from higher taxes on beer, wine or cider.

The bill passed, the Task Force was created and Dr. Jeanne was appointed to the Task Force. In fact, at the first meeting of the task force, Dr. Jeanne again noted the $4.8 billion that the interim report noted as costs from excessive alcohol consumption while noting that Oregon taxes are alcohol are some of the lowest. However, again he said nothing about the final report declaring that increased taxes would do nothing to reduce excessive consumption of alcohol.

The Oregon Health Authority’s Dr. Tom Jeanne is not the only member of that agency to be aware of the study. The Oregonian report quotes from emails passed between other members of the agency. But who else knew about the unpublished report? Did Representative Tawna Sanchez, who twice now has authored bills to raise alcohol taxes in comically high amounts know about it? Did other members of the prevention and treatment community know about it?

We will find out if Representative Sanchez knew as it turns out she is the Chairwoman of the Task For examining alcohol taxes and treatment services which will meet for a second time on February 1.

This all brings us back to why the report was buried.

In an interview with the Oregonian, Dr. Jeanne claimed that it wasn’t “buried”:

“This isn’t anything that we’re trying to hide,” Jeanne said in an interview. The report wasn’t commissioned for public consumption, Jeanne said, but to inform the Health Authority’s “Rethink the Drink” campaign, which calls Oregonians’ attention to heavy alcohol use. That campaign launched in the summer of 2022”

This clearly isn’t true. The very same report noted that excessive alcohol consumption cost the state $4.8 billion annually and that finding was bandied about by Dr. Jeanne and others for two years.

Dr. Jeanne also told the Oregonian that the Oregon Health Authority was just too busy to publish the document:

“Jeanne said the health authority likely would have published the final report on alcohol taxes in a normal year. But late in 2021, when the report was finished, the agency was working to launch its broader Rethink the Drink campaign and was short staffed during COVID-19 response, he said.

What about throughout 2022? What about throughout 2023? How much staffing does it take to upload a document to the agency’s website? This explanation clearly isn’t true either.

From where I sit, from what I’ve read, and from what I’ve found out there are only two possible rationale explanations as to why the Oregon Heath Authority buried a report saying that higher alcohol taxes would do little or nothing to address excessive consumption and the economic harm it causes:

1. The findings did not support reality. However, this explanation would call into question the $4.8 billion cost that Echo Northwest had already reported and that had been used by proponents of tax increases.

2. The findings would have undermined the claims that the pro-tax increase caucus had been making about the impact that higher taxes would have on excessive alcohol consumption. However, this should not be a problem if the goal is to determine the truth.

The Oregon Health Authority cannot be trusted when it comes to questions of alcohol consumption. There is no other conclusion that can be drawn from this fiasco. They are tainted.

But there is one other aspect to all of this: The Oregon wine, beer, and cider industries. It is notable that in commissioning the buried report and in creating a task force to examine taxes and recovery services, not once was the impact on these industries given one bit of consideration.

How would a 2,444% increase in the beer tax in Oregon impact breweries? How would a 644% increase in the wine tax impact wineries? How would both these taxes impact the cider industry? Aaron Sarnoff-Wood, co-founder of Corvallis-based 2 Towns Ciderhouse, has said that had the dramatic tax increases proposed by Representative Tawna Sanchez gone into effect it would have cost his cidery $4 million per year—more than his annual profit.

No one involved in the recovery community nor at the Oregon Health Authority cares. This is a problem.

This particular scandal could be the tip of the iceberg. We could find out that lawmakers in Oregon and members of the prevention and treatment community have known about these conclusions for more than two years, said nothing, yet continued to cherrypick the report in a way that only supports their one-sided view of the issue of excessive consumption of alcohol. If this turns out to be true, it could hinder their 2025 efforts to again pass a bill raising taxes on Oregon’s alcohol industry. And frankly, if this is true it should disqualify anyone who knew of the report yet said nothing from even commenting on questions surrounding alcohol taxes and alcohol consumption.