In 1998 New York State spent $8.7 billion, or about 18 percent of its budget, to battle the effects of drug, alcohol, and cigarette abuse, according to a new study, "Shoveling Up: The Impact of Substance Abuse on State Budgets," by Columbia's National Center on Addiction and Substance Abuse (CASA).

The three-year study revealed that in 1998 45 states plus the District of Columbia and Puerto Rico spent conservatively $81.3 billion dollars on substance abuse and addiction-related expenses, or about 13 percent of combined budgets totaling $620 billion. Of each such dollar devoted to these expenses, 96 cents went to shovel up the wreckage of substance abuse and addiction; only four cents to prevent and treat it.

The 183-page report was the first ever to analyze the impact of all substance abuse (involving alcohol, tobacco, and illegal drugs) on state budgets and used the most conservative assumptions. It found that in 1998 the states studied spent:

• $77.9 billion to shovel up the wreckage of substance abuse, only $3 billion to prevent and treat the problem and $433 million for alcohol and tobacco regulation and compliance.
• $24.9 billion to cope with the impact of substance abuse on children. States spend 113 times as much to clean up the devastation that substance abuse visits on children as they do to prevent and treat it.

"Substance abuse and addiction is the elephant in the living room of state government, creating havoc with service systems, causing illness, injury and death, and consuming increasing amounts of state resources," said Joseph A. Califano, Jr., CASA president and former Secretary of Health, Education and Welfare. "This report is a clarion call for a revolution in the way governors and state legislators think about and confront substance abuse and addiction."

In an unprecedented effort, CASA looked at state spending in 16 areas including criminal and juvenile justice, transportation, health care, education, child welfare, and welfare to detect just how many taxpayer dollars the states spend to deal with the financial burden of unprevented and untreated substance abuse. CASA found that this $77.9-billion burden was distributed as follows:

• $30.7 billion in the justice system (77 percent of justice spending).
• $16.5 billion in education costs (10 percent of education spending).
• $15.2 billion in health costs (25 percent of health spending).
• $7.7 billion in child and family assistance (32 percent of child/family assistance spending).
• $5.9 billion in mental health and developmental disabilities (31 percent of mental health spending).
• $1.5 billion in public safety (26 percent of public safety spending) and $400 million for the state workforce.

The proportion states spend on shoveling up the wreckage compared to what they spend on prevention and treatment ranges from $89.71 vs. $10.22 in North Dakota to $99.94 vs. $0.06 in Colorado.

"States that want to reduce crime, slow the rise in Medicaid spending, move more mothers and children from welfare to work and responsible and nurturing family life must shift from shoveling up the wreckage to preventing children and teens from abusing drugs, alcohol, and nicotine and treating individuals who get hooked. The choice for governors and state legislators is this: either continue to tax their constituents for funds to shovel up the wreckage of alcohol, drug and nicotine abuse and addiction or recast their priorities to focus on preventing and treating such abuse and addiction," said Califano.

The report finds that the next great opportunity to reduce crime is to provide treatment and training to drug and alcohol abusing prisoners who will return to a life of criminal activity unless they leave prison substance free and, upon release, enter treatment and continuing aftercare and the biggest opportunity to cut Medicaid costs is by preventing and treating substance abuse and addiction.

"Governors who want to curb child abuse, teen pregnancy and domestic violence and further reduce welfare rolls, must face up to this reality: unless they prevent and treat alcohol and drug abuse and addiction, their other well intentioned efforts are doomed," added Califano.

Survey of Budget Offices

CASA conducted an elaborate survey of the states, examined programs designed to prevent and treat substance abuse or deal with its consequences and interviewed scores of state budget and program officials. Forty-five states, the District of Columbia and Puerto Rico responded to the survey. CASA estimated spending for the five states that did not respond: Indiana, Maine, New Hampshire, North Carolina and Texas.

This report covers only state costs. It does not cover federal matching funds that states spend (e.g., on Medicaid and welfare); federal government costs; the spending of local governments (which bear most of the law enforcement burden) and the costs to parochial and private schools and other private sector costs (such as employee health care, lost productivity and facility security), which are the subject of ongoing CASA analyses.

The CASA report contains detailed recommendations on targeting treatment and prevention efforts, using state powers of legislation, regulation and taxation, and improving program management and service delivery.

Shoveling Up: The Impact of Substance Abuse on State Budgets is funded by the Starr Foundation, the Robert Wood Johnson Foundation, Carnegie Corporation of New York, Primerica Financial Services, National Institute on Drug Abuse, National Institute on Alcohol Abuse and Alcoholism and the Abercrombie Foundation.