The Cigarette-Tax Budget

January 26, 1994

Take away Gov. William Donald Schaefer's proposed 25-cent per pack increase in the cigarette tax and his 1994 budget that was released last week is pretty mundane. A pay raise for state workers, for sure, but basic, hold-the-line allocations for most state agencies. Only when the new "sin tax" money is added to the pot is there controversy.

Opposition comes from two sources: 1) Legislators allied with tobacco interests who want to kill any tax rise on cigarettes; 2) legislators who are concerned that the governor is once again exceeding the General Assembly's voluntary spending affordability limit.

The first group of opponents deserves little sympathy. Cigarette smoking is a major health hazard in Maryland. A higher levy is expected to cut consumption by 15 percent. Equally important, the higher price of cigarettes should deter more teen-agers from picking up the smoking habit.

The other group of opponents has reason to view the tax increase with suspicion. It further pushes the governor's budget beyond the unofficial spending cap by about $160 million. It does, indeed, create new state spending obligations. And on a political level, it does force incumbent legislators to run for re-election this summer after raising taxes on tens of thousands of smoker/voters.

But a persuasive argument can be made in favor of this higher tax on cigarettes. First, the legislature's spending ceiling ought to be flexible, especially if the extra money being spent is supported by a new tax levy. The state can afford the $70 million in programs outlined by the governor because Mr. Schaefer has identified a new tax source to pay the bills.

Second, the aid package is very appealing politically. Montgomery and Prince George's legislators, in particular, take home nearly $16 million for extended pre-kindergarten education, programs to help children with limited English proficiency, grants to help impoverished school kids and money to help counties pay for state mandates. Locally, Baltimore City would gain $8.6 million; Baltimore County, $5.2 million; Anne Arundel, $3.2 million; Carroll, $891,000; Harford, $1.6 million, and Howard, $1.8 million. Additionally, there is money for the developmentally disabled, programs for the elderly and homeless and a school for disruptive youths -- all contingent on the cigarette tax.

The governor makes a strong case. There is a solid health reason for a higher levy on smokers. And the new aid is targeted to help those at the local level. General Assembly leaders ought to make room in their spending affordability program for the cigarette-tax package. It is fiscally responsible and socially responsible, too.

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