Shoveling Up: The Impact of Substance Abuse on State Budgets

    Published: January 2001

    This report examines how much our failure to prevent and treat addiction costs state governments and taxpayers, and where those costs fall.

    Key Takeaways

    This report looked at 16 areas of state spending, such as criminal and juvenile justice, health care, education, welfare and child welfare, to detect just how many taxpayer dollars the states spent to deal with the financial burden of our failure to prevent and treat substance abuse and addiction. Findings included the following:

    • Substance use and addiction cost state governments at least $81.3 billion in 1998, or 13 cents of every state budget dollar.
    • Of every dollar that state governments spent on substance abuse and addiction in 1998, 95.8 cents went to paying for the burden of this problem on public programs, while only 3.7 cents went to prevention, treatment and research, and 0.5 cents to taxation and regulation.


    For the government:

    • Invest in prevention and treatment on specific populations, including the prison population, clients in the mental health system, and youth in the juvenile justices system who are substance-involved.
    • Expand the use of state powers of legislation, regulation and taxation to reduce the impact of substance use.
    • Eliminate mandatory sentences for those with addiction.
    • Increase taxes on alcohol and tobacco.

    Research Methods

    This report relied on data from an advisory panel of state policy and budget experts; consultation with researchers from the Urban Institute, the Center for Budget and Policy Priorities, and the Malcolm Weiner Center for the Study of Social Policy at Harvard; a detailed survey of state budget offices; a review of more than 400 publications; and a review of state initiatives in substance use prevention and treatment.


    January 2001