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House panel wants a 50 percent hike to alcohol taxes

The Baltimore Sun
April 9, 2011
By Annie Linskey

** Update: After a six hour debate, the House of Delegates Saturday night gave initial approval for measures that increase the tax rate on alcohol from 6 percent to 9 percent and dedicate the revenues to education and the developmentally disabled (for one year.) The bills have a ways to go, and not much time before Gov. Martin O’Malley can sign: They need final passage in the House Monday and must be approved by the Senate the same day.

** Original post: ┬áThe House Ways & Means Committee Saturday afternoon approved a pair of bills that will increase the sales taxes on beer, wine and liquor from 6 percent to 9 percent, and dedicate most of the extra money to school construction in the state’s largest counties.

The additional revenues are not needed to balance the state’s budget, which has already passed in both chambers. The tax will raise about $85 million for the budget year starting July 1. A portion of the cash will also go to Maryland’s Developmentally Disabled Administration, which has years long waiting lists for programs. (See proposed school construction allocations after the jump.)

Lobbyists for the disabled hung around the committee room and gleefully grabbed reporters on the way out. They’ve long targeted the alcohol tax as a funding source for their programs.

The state’s powerful liquor lobby appeared gloomier (photographed on the right). Representatives from the wholesale, distributor and retail layers opposed the tax saying that it would cause Marylanders to buy alcohol elsewhere. The plan, however, was not as odious to them as a different proposal that would have increased the excise tax on alcohol.

Republican lawmakers said the new tax will cause job losses and hurt the economy. “We are still in a Great Recession,” said Del. Mark N. Fisher, from Calvert County.

They also objected on procedural grounds: Because the bill came up so late in the Senate, the House never had a full hearing on the measure and opponents didn’t have a chance to speak before the committee.

Democratic lawmakers brushed off that concern: They’d heard a similar bill that hiked the excise tax on alcohol in previous years and felt the arguments would be very similar. Proposed allocation of revenues from increase to alcohol tax:

Developmental Disabilities Administration:  The agency would receive $15 million

School construction money:

*Anne Arundel County: $5 million
*Baltimore City: $9 million
*Baltimore County: $7 million
*Howard County: $4 million
*Montgomery County: $9 million
*Prince George’s County: $9 million
*Eight Eastern Shore counties: $1.25 million (Caroline, Dorchester, Kent, Queen Anne’s, Somerset, Talbot, Wicomico and Worcester)
*Five Western Maryland counties: $750K (Allegany, Garrett, Washington, Carroll and Frederick)
*Three Southern Maryland counties: $750K (Calvert, Charles and St. Mary’s)
*Two N. Maryland counties: $1.25 million (Cecil and Harford)

Education aid:
* Baltimore City: $12.2 million
* Prince George’s County: $8.8 million