Date: Tuesday, January 4, 2011, 1:59pm EST
A study released Tuesday says a proposed hike in the state’s alcohol tax would decrease the number of alcohol-related deaths in Maryland while saving the state money from crimes associated with booze.

The study, commissioned by the Maryland Citizens’ Health Initiative and conducted by Johns Hopkins University’s Bloomberg School of Public Health, estimates a proposed dime-per-drink tax increase would lead to a more than 4 percent decrease in alcohol consumption.

The tax could save the state more than $225 million in property damage and other costs associated with alcohol-related crimes. Meanwhile, the tax hike would generate more than $215 million in revenue for Maryland, the study says. The state currently faces a looming budget deficit, nearing $2 billion this year. Advocates of the tax want the money generated from the tax to be set aside in a separate state fund that would support health care services and anti-drinking programs for Marylanders.

Some lawmakers and business leaders have questioned why an increase in the alcohol tax is necessary to support health care services when federal funding boosts are expected to accompany health care reforms over the next several years. Some say that if the tax revenue went to the state’s general fund instead of a separate fund, it might gain more widespread support in the upcoming General Assembly session.

The state’s influential alcohol lobby is against the tax, arguing that even a small increase in alcohol taxes would result in a loss of business and drive consumers to purchase alcohol across state borders in a tough economy.

“Forcing thousands of waiters, waitresses, bartenders and busboys into the unemployment line is no way to prop up the state’s health care system,” said Jay Hibbard, vice president of Distilled Spirits Council of the United States.

Advocates of the tax hike disagree.

“This is good policy and good politics,” said Vincent DeMarco, a lobbyist who is at the forefront of the tax hike.

The study claims that the tax would curb 33 deaths annually. Alcohol abuse accounts for 1,278 deaths in Maryland per year.

DeMarco, president of Maryland Citizens’ Health Initiative, was successful in lobbying for an increase in the state’s cigarette tax in 2008.

The proposed tax would bump alcohol prices an average of 6.6 percent and would cost occasional drinkers about $11 a year, according to the study. What the tax translates to for consumers is an extra $0.60 for a six-pack of beer, $0.60 to $0.80 for a bottle of wine and about $2.25 for a bottle of liquor. The tax will be levied at the wholesaler level and not on a point-of-sale basis at liquor stores and restaurants.

DeMarco said the proposed tax bump is so high because Maryland’s alcohol taxes haven’t been raised since 1972 for beer and wine and 1955 for spirits.
Compared with neighboring states, Maryland’s alcohol tax is arguably reasonable. Maryland’s current alcohol tax is $1.50 per gallon of spirits, $0.40 per gallon of wine and $0.09 per gallon of beer.

Delaware puts a $5.46 per gallon tax on spirits, $0.97 per gallon tax on table wine and a $0.16 tax on every gallon of beer. Pennsylvania has a $6.54 per gallon tax on spirits, and Virginia’s spirits tax is $20.13 per gallon.

So far, 64 of 141 delegates and 20 of 47 state senators have said publicly that they would support the tax hike. A coalition of organizations including AARP Maryland, Maryland Assembly of Family Physicians, Maryland Nurses Association, American Academy of Pediatrics, Maryland Chapter of the National Association of Social Workers and Maryland NAACP have also signed a proposal in support of the tax.

Last modified: January 4, 2011