Nickel-a-Drink Fee Sought to Fund Trauma Centers

Citing California’s stressed emergency care system and the state’s deepening budget troubles, a state legislator Thursday called on her colleagues to approve a nickel-per-drink fee on alcoholic beverages to help fund trauma services.

Senate Bill 5x, written by state Sen. Gloria Romero (D-Los Angeles) and supported by some physicians and hospital executives, would levy the fee of five cents per drink on alcohol distributors. She said it would generate an estimated $500 million a year. The money would be used to reimburse emergency rooms and trauma centers for the cost of treating alcohol-related emergencies.

Romero, who introduced a similar measure in the last legislative session, said the current budget crisis has created a pressing need for the nickel fee.

“The alcohol industry needs to assume greater responsibility for the increasing health-care costs associated with the use of their products,” Romero said during a news conference at White Memorial Medical Center in Boyle Heights.

The measure comes amid a special legislative session to address the state’s projected $21-billion deficit. Gov. Gray Davis has proposed $10.2 billion in cuts and savings to take effect over the next 18 months, including $2 billion in health and human services.

Even as legislators consider the effects of those proposed cuts, some predict that the state’s shortfall could balloon further, perhaps reaching $30 billion for the remainder of this fiscal year, which ends June 30, and the following year. Davis spokesman Steve Maviglio said the governor had not yet taken a position on Romero’s bill. But Republican lawmakers, who have vowed to oppose any effort to increase state revenue through taxes and fees, said they would not support it.

“The imposition of another tax -- whether it be for beer or Twinkies or whatever -- will have a further devastating impact on the economy,” said Assemblyman Robert Pacheco (R-Walnut), the ranking Republican on the Assembly Health Committee.

Assembly GOP Leader Dave Cox (R-Fair Oaks) called the measure “well-intentioned, but just the wrong approach.”

“In the final analysis, this is just an increase in taxes,” Cox said.

But Romero said the measure would be a fee, not a tax, and argued that, because it would be assessed at the wholesale level, distributors could absorb the cost without passing on an increase to consumers.

Unlike raising taxes, which requires a two-thirds vote of the Legislature, lawmakers can raise fees with a simple majority vote -- giving Romero’s measure an advantage in the Democrat-controlled Legislature. Fees are supposed to cover the specific costs of a service rather than subsidize general government expenses.

Alcohol interests, however, are balking at picking up part of the tab for emergency services.

“We understand they are looking for ways to bridge that deficit the state is facing but, quite frankly, I’m surprised they would look at a drink tax, because it’s quite possibly the worst way to generate additional tax revenue,” said Victor Franco, state affairs manager for the Miller Brewing Co.

Franco said that increasing the cost of beer and wine would punish responsible drinkers and reduce sales.

“In our opinion, it’s a highly regressive fee that affects low- and moderate-income beer drinkers, and it will increase the cost of our products,” he said.

The bill defines a drink, the amount subject to the nickel fee, as 1.5 ounces of hard liquor, 12 ounces of beer or five ounces of wine.

In 1990, efforts funded by the alcohol industry helped defeat a similar nickel-a-drink ballot initiative. On Thursday, industry officials indicated they would also fight this measure if it were adopted.

Michael Falasco, a lobbyist for the Wine Institute, which represents many vintners, said his organization would “seriously” consider a referendum to have the fee repealed if it passed.

“This is the biggest issue that can affect us,” Falasco said, noting that the industry is especially offended by the “stigma” of being identified with emergency room use. “There is nothing that is more onerous.”

But backers said the measure would provide vital funding for an emergency system that is stretched to the limit. More than 60 emergency rooms and 30 trauma centers have permanently closed in the last decade, forcing those left to frequently turn ambulances away because of overcrowding.

In Los Angeles, between one-fourth and one-half of hospitals are overwhelmed every day, according to Anthony Abbate, regional vice president of the Hospital Assn. of Southern California.

“We’re in the midst of a true crisis,” said Dr. Wes Fields, president-elect of the California chapter of the American College of Emergency Physicians.

Romero noted that about one out of every three emergencies treated in the state’s emergency rooms is alcohol-related, and that alcohol is a factor in 32% of California’s car crashes.

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Times staff writer Dan Morain contributed to this report.