If we had a nickel…

April 17, 2023 7:00 am

A small alcohol tax increase could find massive investment in mental health needs. (Photo by Catherine Falls Commercial/Getty Images)

Prince Charles and Lady Diana were married. Ronald Reagan was inaugurated. Sandra Day O’Connor was appointed the first female judge on the Supreme Court. What do these events have in common? They all occurred in 1981…which is the last time the alcohol tax in Indiana was raised.

As far as I can tell, the alcohol tax is the only tax in Indiana that has not been raised in 42 years.  Often called a “sin tax” (along with tobacco and gaming) this tax, unlike a sales tax, is levied in part to discourage the misuse of alcohol, which leads to increased costs for health care and behavioral health. Alcohol continues to be the most widely used drug by Indiana youth and adults.

We rank 22nd for excessive drinking, which costs Hoosiers $689 per person. Alcohol use was reported in 42% of all treatment admissions for youth and adults, with thousands of Hoosiers being impacted by substance use disorder (SUD). But thankfully SUD, like other mental illness, can be treated and recovery is possible with the right services and support.

And that vital support is found in Senate Bill 1. This is an unprecedented time of awareness and validation for Hoosier mental health. Never, in the history of advocacy in Indiana, has mental health been prioritized like it has been in this legislative session. And for good reason. Legislators have heard the alarming statistics:

  • 1 in 5 Hoosiers experience mental illness,
  • An estimated 40% of all persons who are incarcerated have a mental illness,
  • Nearly half of Hoosiers who are homeless have a mental illness,
  • 51% of Indiana adults report monthly alcohol use,
  • 44% of women in Indiana reported alcohol use,
  • 24% of Hoosiers 12 and older report binge drinking,
  • Alcohol attributable deaths are increasing in Indiana,
  • Untreated mental illness costs Indiana more than $4 billion every year.

SB 1 provides a real lifeline for Hoosiers with mental illness. The statewide implementation of the 988-suicide prevention call system offers a tangible voice of hope.

Mobile crisis units, crisis stabilization teams, and certified community behavioral health clinic services create a safety net for people who are in crisis, as well as those who are living with chronic mental illness. Good crisis care at the beginning of a mental health emergency not only saves the state money, but more importantly saves lives. As crucial as SB 1 is, however, there is currently no funding provided to support these efforts. 

This comprehensive crisis response system, if fully funded, is estimated to cost about $130 million per year.

So, where will the funding come from? Sen. Mike Crider, the author of the bill, has said he is looking at all options for funding, and one of those options is to increase the alcohol tax. By raising the tax just five cents per drink, Indiana could raise more than $129 million per year.  This revenue would fund nearly all the proposed behavioral health components in SB 1. 

There are evidence-based best practices for building a sustainable and effective mental health system in Indiana. People need someone to contact, someone to respond, and a safe place to get help. The full and complete funding of SB 1 provides the necessary and vital building blocks for Indiana’s behavioral health system. 

But without funding, SB 1 is merely words on paper. It’s past time to raise the alcohol tax in Indiana. If we had a nickel for every time someone bought a drink…we could save a life.


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Lisa Hutcheson
Lisa Hutcheson

Lisa Hutcheson is the longtime Vice President for Policy and Programs at Mental Health America of Indiana, and also serves as Director for the Indiana Coalition to Reduce Underage Drinking.