Advocates push for alcohol tax hike

Wednesday, Dec. 17, 2008

The effort follows a similar script as last year's successful campaign to double the state levy on cigarettes to $2 per pack as part of a health care expansion initiative.

"Like the tobacco tax, it's a public health benefit," said Vincent DeMarco, president of the Maryland Citizens' Health Initiative.

The 10-cent tax increase would raise roughly $200 million annually for health care, he said

Taxes per gallon on alcoholic beverages in Maryland are among the lowest in the nation — $1.50 on distilled spirits (3rd lowest), $.40 on table wine (13th lowest) and $.09 on beer (8th lowest). Neighboring states largely impose equal or higher alcohol tax rates, according to the nonprofit Tax Foundation.

The affordability of such beverages is a chief reason for high alcohol consumption rates in Maryland, DeMarco argued.

Every 10-cent increase in the cost of alcohol leads to a 3 percent reduction in mortality, said Dr. Philip Cook, a visiting Duke University scholar at the University of Maryland who has done research on the correlation between alcohol-related deaths and state tax rates. "An alcohol tax is a lifesaver," DeMarco said.

Maryland last raised its tax on distilled spirits in 1955 and on beer and wine in 1972. Recent proposals to increase the levy have failed and industry leaders said they will fight new attempts to boost the tax that would eat away at their already thin profits and drive law-abiding customers away.

Store owners feel they would be unfairly penalized because they have to shoulder the excise tax on alcohol as well as the state sales tax, which increased this year by 20 percent.

"It's part of our costs. We pay that up front," said Jack Milani, legislative chairman of the Maryland State Licensed Beverage Association and a co-owner of Monaghan's Pub in Woodlawn. "The average guy can't keep paying this stuff. My customers' keep telling me things are tough. They don't want to pay any more taxes. They're trying to hang on to what they've got."

But DeMarco argued that business will not suffer because Maryland would still have relatively low alcohol tax rates, even if the increase passes.

Still, DeMarco acknowledged that lawmakers are likely to reject any tax hikes this year with the sting of $1.4 billion in new taxes passed during last year's special session fresh in the minds of voters.

The focus this year will be building support among coalition partners and legislators and educating the public.

"Everything we've ever proposed has faced a lot of resistance," he said, referring to the cigarette tax and a highly controversial payroll tax known as the Wal-Mart bill that was passed in 2005, vetoed by then-Republican Gov. Robert L. Ehrlich Jr., and overridden by the legislature the following year before being struck down in federal court. "When this coalition is at its full potential, it will pass."

abrody@somdnews.com