Carroll's Sin-tax Take Dwindling

County Expecting Less Revenue From Alcohol, Tobacco Sales Each Year

August 18, 1991|By Darren M. Allen | Darren M. Allen,Staff writer

For decades, governments have been warning against the evils of smoking and drinking while at the same time depending on those activitiesfor millions of dollars in tax revenue.

And while the tax on a pack of cigarettes, a fifth of vodka or a six-pack of beer has been on the rise for years, the amount of revenue Carroll -- and the rest of Maryland -- takes in from the so-called sin taxes has been on the decline since the 1980s.

The county's share of the $87.9 million collected statewide in the fiscal year that ended June 30 was $443,605, down 3 percent from the amount Carroll received a year earlier.

Of the $87.9 million -- collected at the rate of 16 cents for a pack of cigarettes, 9 cents for a gallon of beer and $1.50 for a gallon of hard liquor -- the 23 counties and Baltimore were given a total of $21.3 million, a nearly 4percent drop from a year earlier.

The revenue, in Carroll at least, represents a small -- 0.4 percent -- part of the county's total budget, but the downturn in sin-tax receipts underscores a general decline in the amount of money county governments are taking in.

"Thismoney is part of our general fund," said Jeff Topper, a county budget analyst. "And when it declines, the amount of money that goes to schools, roads, services and county government decreases as well."

Unlike the drop in the county's $35.2 million share of state-levied income taxes during fiscal year 1991, the drop in sin-tax revenue was expected. In all, state-shared tax revenue -- excluding the sales tax -- for the current budget year is expected to drop 9.7 percent from fiscal 1990's $11.2 million.

"(Sin-tax) revenue source has been flat to mostly dropping for quite some time," said Marvin A. Bond, an assistant state comptroller. "We've been projecting for the last four years now a yearly decrease."

Over the last seven years, Carroll's share of the tax has decreased from almost $500,000 to the $443,000 collected in the fiscal year just ended.

While the revenue drops, the level of taxation continues to rise, especially on cigarettes, where the 16 cents-a-pack levy was raised last month to include a sales tax.

To generate the tax Carroll received, retailers here sold 9.6million packs of cigarettes, 5.4 million bottles of beer and 214,000gallons of liquor and wine.

At the same time the state's distribution of the sin taxes to the counties and the city is lower, the amount collected by the state is up, state Comptroller Louis L. Goldsteinsays.

Maryland liquor sales generated $12.9 million in taxes in fiscal 1991, a 5 percent drop.

The sale of 382 million packs of cigarettes generated $61.1 million, up 2.4 percent from fiscal 1990; thesale of wine raised $4 million, up 1 percent; and beer brought in $9.5 million, up 0.33 percent.

The taxes are collected by wholesalers based on their inventories of cigarettes, liquor, beer or wine before they are delivered to retailers. The wholesalers pass the tax on to the retailers, who then charge customers.

The tax revenue is distributed to the counties and Baltimore every three months. The most recent quarter, which ended June 30, saw Carroll's share of the three taxes total $105,101, down from $214,136 collected in the final quarter of fiscal 1990.

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