Tempting cigarette tax

January 21, 1994

There's a tempting carrot being dangled tantalizingly in front of state legislators by Gov. William Donald Schaefer: $70 million worth of new aid for local schools and local government programs. The temptation, though, comes with a catch. To get this money, lawmakers must raise the tobacco tax.

Compounding their problem is that there is precious little in the governor's $13.5 billion budget that can be cut to make way for this package of goodies, which includes $25 million for schools (poverty grants, expansion of pre-kindergarten classes, money to help non-English-speaking students), $25 million in grants to counties to pay for state-ordered mandates, $13 million to expand community programs for retarded adults and $7 million for a variety of health, public safety and social services.

Except for the tobacco tax proposal, this budget is mundane. Most agencies are being asked to make do with hold-the-line allocations. State revenues are up 5 percent, but nearly all of that new money is swallowed up by local aid, Medicaid costs and a salary increase (the first in four years) for state workers. When you add in higher debt service, money to open three new prisons and a mandated increase in day programs for the developmentally disabled, all the extra cash is gone.

So without a cigarette tax increase, there will be no money for new programs. That could hurt back home. For instance, two of the biggest beneficiaries from the cigarette-tax package would be Montgomery and Prince George's counties, which would take home a combined $16 million. Baltimore City's share would be $8.6 million; Baltimore County, $5.2 million; Anne Arundel, $3.2 million; Howard, $1.8 million, Harford, $1.6 million, Carroll County, $891,000.

Conventional political wisdom holds that politicians shouldn't raise taxes in an election year. But there are so many local groups eager to grab the aid offered by the governor in the cigarette-tax package that the conventional approach may not apply in 1994.

The key for many lawmakers is that an increasing number of citizens would cheer heavier taxes on cigarettes. Forget about the extra money raised: The big benefit to many people is that cigarette consumption would drop by about 15 percent. That could sharply lower Maryland's health costs for tobacco-linked illnesses in years to come.

We suspect that legislators will probably compromise by lowering the 25-cent- per-pack increase suggested by the governor and also lowering the benefits package. Still, localities are likely to win big from any tobacco tax rise. That's a temptation few state legislators can resist.

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