Complete Colorado

House committee rejects tax hikes on alcohol, marijuana

DENVER–A pair of Democrat-backed proposals to increase taxes and fees on liquor and marijuana to fund addiction and mental health programs met a bipartisan death in a Colorado House committee last week.  A bipartisan majority of legislators sided with business owners who argued the measures would further harm already struggling industries.

House Bill 26-1271, was heard on Tuesday, March 17 before the House Health and Human Services Committee. The bill sought to slap a new fee of 5 cents per gallon of beer or cider, 35 cents per liter of spirits, and 7 cents per liter of wine on manufacturers and distributors to support addiction treatment and prevention programs.

After testimony from both industry representatives and public health advocates, the committee voted 8–5 to indefinitely postpone the bill.  According to the legislature’s glossary of terms, a motion to postpone indefinitely “has the same effect as moving to kill a measure.”

Opposition from brewers, distillers and hospitality groups played a central role in the bill’s defeat, with business owners arguing the added costs would come at a time of declining demand and rising expenses, potentially forcing layoffs or closures.

A second proposal, House Bill 26-1301, was taken up on Wednesday, March 18, also in the Health and Human Services Committee. That bill would have referred a question to voters asking for higher taxes on both alcohol and marijuana sales, with revenue earmarked for a new state mental health hospital and related services.

Despite support from mental health advocates and some lawmakers who emphasized Colorado’s shortage of treatment beds, the committee rejected the bill in a narrower 7–6 vote.

Proponents of the measures argued that Colorado’s mental health system remains under-funded, requiring new, dedicated funding streams, especially amid an ongoing state budget shortfall.

Recent revenue forecasts put the budget hole lawmakers must fill at roughly $1.5 billion.

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