AP Financial news
July 18, 2012
By BRIAN WITTE Associated Press

Maryland health officials are highlighting $14.3 million they can use to expand community−based, long−term
care for seniors and the physically disabled with the help of an increased state alcohol tax, which has been in
effect for a little more than year. The money has been set aside for the fiscal year that began this month.

“We’re going to be able to bring in almost 500 people off of different waiting lists who have not been
receiving community services,” said Chuck Milligan, a deputy secretary of health care financing with the
state health department.
In the first 11 months since it went into effect, Maryland’s 50 percent increase in the alcohol tax has raised about $68.6 million.

The increase in the sales tax on alcohol from 6 percent to 9 percent is expected to raise about $75 million for the year, shy of the $85 million projected when the bill was passed in 2011.

Critics say the tax increase has hurt businesses, particularly ones located near borders with other states where
taxes are lower.

John Binau, owner of Castle Liquors in Williamsport and president of the Maryland State License Beverage Association, noted that business owners in Cecil County have felt the effect, because consumers can easily go to Delaware to buy cheaper alcohol. He also said merchants in Ocean City have been complaining, too, because of the resort town’s proximity to Delaware.

“I can tell you in general, in some parts of the state, it’s been bad,” Binau said of the effect on businesses. Binau also said Maryland businesses that sell alcohol are particularly concerned about how the tax will continue to have an impact as Virginia and Pennsylvania consider privatizing alcohol sales.

About $64 million of the money from the increase is now set aside for the current fiscal year for health−related initiatives, including aide for the developmentally disabled. Initially, lawmakers included $47.5 million in the last fiscal year for a one−time allocation to schools. Now, however, most of the money is being directed to health needs.

“It worked out exactly as we wanted, that it’s being used for these purposes through the regular budget process,” said Vincent DeMarco, president of the Maryland Citizens’ Health Initiative. “Now, it has to be redone every year, but these are becoming like normal budget items, so they’ll be in the budget every year.”

The alcohol tax increase money is being directed in the following ways:
$27.3 million to support progress for people with developmental disabilities, including $15 million to reduce a waiting list for people seeking community services.

Last modified: July 19, 2012