January 29, 2001
The National Press Club
Substance abuse and addiction is the elephant in the living room of American society. Too many of our citizens deny or ignore its presence. Abuse and addiction involving illegal drugs, alcohol and cigarettes are implicated in virtually every domestic problem our nation faces: crime; cripplers and killers like cancer, heart disease, AIDS and cirrhosis; child abuse and neglect; domestic violence; teen pregnancy; chronic welfare; the rise in learning disabled and conduct disordered children; and poor schools and disrupted classrooms. Every sector of society spends hefty sums of money shoveling up the wreckage of substance abuse and addiction. Nowhere is this more evident than in the public spending of the states.
The heaviest burden of substance abuse and addiction on public spending falls on the states and programs of localities that states support. Of the two million prisoners in the United States, more than 1.8 million are in state and local institutions. States run the Medicaid programs where smoking and alcohol abuse impose heavy burdens in cancer, heart disease and chronic and debilitating respiratory ailments and where drug use is the largest cause of new AIDS cases. States fund and operate child welfare systems--social services, family courts, foster care and adoption agencies--where at least 70 percent of the cases of abuse and neglect stem from alcohol- and drug-abusing parents. The states are responsible for welfare systems that are overburdened with drug- and alcohol-abusing mothers and their children. State courts handle the lion's share of drunk driving and drug sale and possession cases. States pour billions of dollars into elementary and secondary public school systems that are more expensive to operate because of drug- and alcohol-abusing parents and teenagers.
Governors and state legislatures have the largest financial, social and political interest in preventing and treating all substance abuse and addiction, whether it involves alcohol, tobacco or illegal drugs, and especially among children and teens. While the federal government has heavy responsibilities to fund biomedical research, classify and regulate chemical substances and interdict illegal drugs, the brunt of failure to prevent and treat substance abuse and the cost of coping with the wreckage of this problem falls most heavily on the backs of governors and state legislatures across America.
For three years, The National Center on Addiction and Substance Abuse at Columbia University has been scouring the fine print of 1998 budgets of the states in an unprecedented effort to measure the impact of substance abuse and addiction on their health, social service, criminal justice, education, mental health, developmentally disabled and other programs in 16 budget categories. Forty-five of the states, the District of Columbia and Puerto Rico responded to our survey--the most extensive and sophisticated ever conducted in this field--and answered the endless questions of our staff. Based on an exhaustive analysis of the data collected, we also estimated the total costs of substance abuse to the budgets of the five states (Indiana, Maine, New Hampshire, North Carolina and Texas) that did not respond to our inquiries.
The results are stunning, especially given that in every case we made the most conservative assumptions about the burden that substance abuse imposes on state budgets. Four findings are particularly striking. In 1998:
- Of the $620 billion total the states spent, $81.3 billion--a whopping 13.1 percent--was used to deal with substance abuse and addiction.
- Of every such dollar states spent, 96 cents went to shoveling up the wreckage of substance abuse and addiction and only four cents was used to prevent and treat it.
- The states spend 113 times as much to clean up the devastation substance abuse and addiction visit on children as they do to prevent and treat it.
- Each American paid $277 per year in state taxes to deal with the burden of substance abuse and addiction in their social programs and only $10 a year for prevention and treatment.
- Of the $453.5 billion states spent in the 16 budget categories of public programs we examined, $81.3 billion--17.9 percent--was linked to substance abuse and addiction.
This report is a clarion call for a revolution in the way governors and state legislators think about and confront substance abuse and addiction. 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 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. The remaining welfare rolls are crowded with individuals suffering from substance abuse and addiction. 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 in their states must face up to this reality: unless they prevent and treat alcohol and drug abuse and addiction, their other well intentioned efforts are doomed.
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.
State spending on children is the cruelest misallocation of taxpayer funds. We know that a child who gets through age 21 without smoking, abusing alcohol or using illegal drugs is virtually certain never to do so. It is a slap in the face of this knowledge for states to spend 113 times more to shovel up the wreckage of children savaged by substance abuse and addiction in social, criminal justice and education programs than they spend to encourage children to stay away from these substances and treat those who ignore that advice.
This unprecedented report looks behind the traditional budget labels--education, criminal justice, transportation, health care, child welfare, welfare, mental health--to detect just how many of their taxpayer dollars the states spend to deal with the financial burden that unprevented and untreated substance abuse and addiction impose on public programs. It is our hope that exposing these heretofore hidden costs will encourage governors and state legislatures to make sensible investments in comprehensive efforts to reduce the use of tobacco, alcohol and illegal drugs, particularly by children.
States spend some $25 billion a year shoveling up after the savage impact of substance abuse on our children. The largest share is spent on the burden of substance abuse to the education system--$16.5 billion; another $5.3 billion is spent for children who are victims of child abuse and neglect; nearly $3 billion is spent for substance-involved youth in the state juvenile justice systems. By comparison, pennies are spent to prevent these problems. This is perhaps the worst example of current investment policies because of the enormous payoff that could be realized by preventing addiction in the first place.
Children are key to the lasting success of any effort to curb the costs of substance abuse. Prevention and treatment efforts, especially those directed to children, must cover all substances. First, sale of any of these substances to children is illegal, and for good reason. Second, tobacco, alcohol and illegal drugs all affect the dopamine systems in the brain and, with repeated use, can change the structure of the brain itself resulting in cravings and addiction. Finally, most individuals who fall prey to abuse and addiction are involved with more than one substance.
What this report reveals for the first time is that the biggest bang for the buck in terms of taming the costs of social programs will come to those states that curb substance abuse and addiction. The return is not simply in reduced state spending. It also comes in reduced crime--and most importantly in reduced human suffering not only for the addict and abuser, but for parents and children, classmates, friends and neighbors. And, it can be counted in positive economic benefits to states from productive, law-abiding, taxpaying citizens.
Addiction is a disease--a chronic, relapsing one--that, untreated, has nasty and costly social consequences: illness, disability, death, learning disabilities, poor school performance, child abuse and neglect, domestic violence, crime--to name a few. Our fear of these consequences often leads us to respond with tough sanctions. It is of course important to hold individuals accountable for their conduct. But the first line of defense is prevention and we can do a much better job at it. Treatment is no sure bet, but success rates of good programs exceed those of many long shot cancer therapies on which we spend millions of dollars. And if we fail to treat the disease, there is little hope of stemming these consequences.
America is not the Garden of Eden and the challenge to state executives and legislators is to balance the importance of holding individuals accountable for their actions with the need to provide treatment for this disease that causes and aggravates so many social problems. It is our hope that this report will help these public officials find that balance.
Governors and state legislators (as well as mayors, city councils and county officials) hold critical keys to the future of our nation. It is the states, in concert with local governments, which face day-to-day the tasks of moving individuals from welfare to work, reshaping our prison and criminal justice systems, dealing with child abuse and neglect, responding to highway accidents, assuring public safety, administering mental health programs, and helping with the process of educating our children. Successfully accomplishing these tasks will require many different programs and strategies. What this report makes clear is that these programs and strategies will be of limited value if they fail to deal with substance abuse and addiction. Energetic, effective and comprehensive efforts to prevent substance abuse and addiction and treat those who fall prey to these problems hold the promise of freeing up billions of dollars of state funds for other pressing needs and reducing the burden on taxpayers.
This undertaking has been CASA's most ambitious public policy analysis. To accomplish it we convened an extraordinary advisory panel of distinguished public officials, researchers and representatives of the National Governors' Association, the National Conference of State Legislatures, the National Association of State Budget Officers and the National Association of State Alcohol and Drug Abuse Directors. We assembled a team of experts in economics, epidemiology and state government budgeting and finance. We reviewed some 400 articles, books and other publications on substance abuse and public spending. We extensively interviewed state budget officers, devised a survey instrument and tested it in California, Florida and New York in order to refine it before sending it to all the states. The survey captured 1998 spending in 16 budget categories for the 47 responding jurisdictions.
Some caveats are appropriate. The complexity of this unprecedented effort means that this report should be regarded as a work in progress that will be refined in the future; that complexity has led us in every case to use the most conservative assumptions.
In several areas, such as public housing, higher education and state employee healthcare, because of lack of data, we were unable to assess the impact of substance abuse and addiction, and this report contains no costs in these areas.
As a result, this report significantly underestimates the impact of substance abuse on state budgets.
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), 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.
Finally, the human suffering of addicts, abusers and their families and friends are incalculable.
This report continues CASA's ongoing Analysis of the Impact of Substance Abuse and Addiction on America's Systems and Populations. We expect that it will form the basis of a forthcoming conference on substance abuse and state budgets as part of our series of CASACONFERENCES.
The report contains a list of the seasoned experts who served on our advisory board and worked as our consultants, who made an invaluable contribution. We are greatly indebted to each of them. Let me single out particularly Dall W. Forsythe, Ph.D., at the Rockefeller Institute, former budget director of New York State and director of public finance with Lehman Brothers who helped to structure the project and the report; Brian Roherty, former executive director of the National Association of State Budget Officers and former budget director in Minnesota who opened the doors of many state budget offices; and Donald Boyd, director, and Deborah Elwood, former senior researcher, at the Fiscal Studies Program, Rockefeller Institute of Government, who helped to design and administer the state survey and analyze the data it elicited. With regret we note that one of our advisors, Gloria Timmer, former executive director of the National Association of State Budget Officers, whose expert advise and good spirit enriched our work, died last year.
Susan E. Foster, M.S.W., CASA's Vice President and Director of Policy Research and Analysis, is the principal investigator and staff director for this effort. She was ably assisted by CASA Research Associate Darshna P. Modi, M.P.H. and data analyst, Liz Peters. David Man, Ph.D., CASA's librarian, and library assistants Barbara Kurzweil and Ivy Truong were a big help. Jane Carlson, as usual, tackled the administrative chores with efficiency and good spirit.
For the financial support that made this undertaking possible, the Board of Directors of CASA and our staff of professionals extend our appreciation to The Starr Foundation, The Robert Wood Johnson Foundation, the Carnegie Corporation of New York, Primerica Financial Services, the National Institute on Drug Abuse, the National Institute on Alcohol Abuse and Alcoholism and The Abercrombie Foundation.