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CASA Report Estimates Substance Abuse Costs New York City $20 Billion


April 1996

Abuse of tobacco, alcohol, and illegal drugs costs the city of New York at least $20 billion every year, according to a two-year study conducted by Columbia University's Center on Addiction and Substance Abuse (Center on Addiction and Substance Abuse, Substance Abuse and Urban America: Its Impact on an American City, New York, February 1996; Bruce Frankel, "Substance Abuse Toll: 21 Cents on the Tax Dollar," USA Today, February 29, 1996, p. 4A).

The report estimates that $21 of every $100 in taxes paid to the city go to manage substance abuse-related problems. Because of the difficulty in accounting for many drug-related problems, the authors estimate the real costs to New York to be about $22-$23 billion annually.

The report estimates that in 1994, treatment of substance abuse-related health problems cost $5.1 billion. $4.9 billion was lost from unemployment related to substance abuse, impairment, death, incarceration, and missed work time by victims of crime. The city incurred $3.5 billion in welfare, food stamp, emergency housing and other social service bills because of substance abuse and $835 million in the maintenance of public parks and public housing, and paying for theft, fire, vandalism and foreclosures.

Only a fraction of the $20 billion in costs was paid directly by the city. An estimated $3.9 billion was paid by the federal government, $3.8 billion by the city, $2.5 billion by the state of New York, with the remainder absorbed by private business and individuals. The $3.8 billion paid by New York City represents 21 percent of the $18 billion in taxes paid to the city every year.

Only $735 million of the $20 billion was spent on treating substance abuse problems, and only $80 million (.4 percent) was spent on prevention. New York City has an estimated 540,000 alcoholics or people with alcohol problems, 490,000 drug abusers, and 1.3 million tobacco smokers.

The report notes that many costs could not be quantified for the purposes of the estimate: the costs of unreported crime and substance abuse-related health problems when no cause was reported, lost work and theft from the victims of substance abusers, and costs related to matters protected by confidentiality (foster care, child and spouse abuse, treatment), private legal and treatment services, inflated automobile insurance, disability payments, and civil and appeals courts.

CASA is currently working on a national project to estimate the costs of substance abuse to business.

[To obtain the 250+-page report, with graphs, charts, diagrams, and extensive technical notes and bibliography, contact CASA at 152 West 57th Street, New York, NY 10019-3310, 212-841-5200. The report costs $20.00.]