Two measures to raise taxes on cigarettes are heading for the General Assembly.
One would boost Maryland's cigarette tax rate from the sixth lowest in the country to the sixth highest. That bill, expected to be introduced next week, would raise the state tax on cigarettes by 20 cents a pack, to 33 cents.
The other measure would extend the state's 5 percent sales tax to cigarettes, which could add up to a dime a pack.
House Speaker R. Clayton Mitchell Jr., an outspoken critic of new taxes, said he would consider supporting the 20-cent tax increase if someone can demonstrate the need for new revenues.
"If I were to look at a tax, that would probably be one I would favor," said Mitchell, D-Eastern Shore. However, he said, taxpayers need to see the state's spending priorities before they will support higher taxes.
On the Senate side, President Thomas V. Mike Miller Jr., D-Prince George's, said legislators "intend to balance our budget without increasing taxes." But if they decide that they need more state revenues, Miller said, "a cigarette tax is one of many alternatives."
Miller said he opposes so-called "sin taxes," like the proposed 20-cent tax on cigarettes, which are punitive because they often "fall upon people who can least afford them."
Miller said he would prefer the approach being explored by some Baltimore senators to extend the state sales tax to cigarettes. Several city senators are considering sponsoring legislation they say would make the state's 5 percent sales tax fairer by extending it to cigarettes and perhaps some other goods that are now exempt. The Maryland Chamber of Commerce this week also came out in favor of this approach.
Goods the senators are considering taxing include: dietaranimal food, film and tape used in television broadcasting, marine equipment for ocean-going vessels, machinery used in manufacturing or research and development, and newspapers and photographic and artistic materials used in publication.
"We've identified $119 million in revenue that would be generated by revoking the exemptions," said Sen. John A. Pica Jr., D-City. Pica said he plans to extend the sales tax to some of those goods in the tax revision bill that he and several other Baltimore senators are drafting.
His bill, based loosely on the recommendations of a gubernatorial commission on taxes chaired by R. Robert Linowes, would raise $560 million through expanded sales taxes and higher income taxes on the wealthy. The revenue would pay for education and aid to local governments, particularly poorer ones like Baltimore.
Pica said lawmakers had not yet decided which currently tax-exempt goods they would like to tax. The move likely will draw fire from any affected special interest groups.
Said Sen. Barbara A. Hoffman, D-City, who will be one of the bill's sponsors: "The little guys pay. Why shouldn't the special interests?"
The Linowes Commission did not make specific recommendations on extending the sales tax to exempt goods, except for cigarettes. It estimated that a 5 percent sales tax on cigarettes would raise $31 million annually.
Maryland has one of the highest cancer death rates in the nation and is No. 3 in per-capita cigarette consumption. It also has a high rate of infant mortality, which has been linked to the use of cigarettes.
Backers of the bill to add another 20-cent tax on cigarettes hope the state's weak economy, which is causing state revenues to drop, will build support for the bill. Similar bills failed in the General Assembly each of the last two years.
As drafted, this year's bill would add 20 cents on top of the current 13-cent state tax and 12-cent federal tax. It targets about a third of the $89 million in estimated new revenues to health programs and to help Maryland tobacco farmers convert to other crops. But Mitchell and Miller said they do not favor such targeted taxes and would want to keep the tax revenues flowing into the general fund.
Advocates estimate that the 20-cent tax would reduce the 450 million packs sold in the state each year by 2 percent, said Robin F. Shaivitz, a lobbyist for the American Heart Association, Lung Association and Cancer Society.
Under the current formula for distributing cigarette taxes, the increase would add $47 million to the general fund and provide $14 million to the counties. The health and farmer programs would get $26.2 million.
The current tax raises about $58 million a year, with $45 million going to the general fund.
"The public spends an inordinate amount of money on the health impact of smoking," said Hoffman.
A sponsor on the House side, Del. Henry R. Hergenroeder Jr., D-City, admitted that tax increases will be controversial this year. But, he added, a cigarette tax "is one of the least offensive taxes. Smoking is discretionary. You don't have to buy cigarettes."
Cigarettes were subject to the sales tax until 1980, when they were exempted in return for a 3-cent increase in the state sales tax.