What A Dime Buys

Our View: State Lawmakers May Be Reluctant To Raise Taxes In An Election Year, But Maintaining Maryland's Low Alcohol Taxes In 2010 Could Prove Perilous To All

December 06, 2009

Conventional wisdom in Maryland's State House holds that lawmakers never, ever raise taxes in an election year. The notion is so deeply embedded in the Annapolis political class that it might as well be carved in marble and offered as the official state slogan.

Yet abandoning that custom in 2010 would give state legislators an opportunity to strike a blow against alcohol abuse, underage drinking, murder, rape and other acts of violence across Maryland, while simultaneously sparing the public from the worst effects of budget reductions forced by the current economic downturn.

That could not only prove a godsend for the state's most vulnerable residents and provide much-needed funding for schools, health care and other basic necessities that are on the government chopping board - it may also reduce the need for local governments to raise property taxes in the near future.

All that is required is the political will to raise Maryland's excise tax on alcohol, an assessment that's been kept so low for so long that it has become a hindrance to the public's health and well-being. The tax currently amounts to about one penny a drink for beer and two cents for wine and distilled spirits, rates left untouched by inflation for so long, they've become among the lowest in the nation.

As a recent report prepared by two professors from the Johns Hopkins University Bloomberg School of Public Health makes clear, raising that tax to the equivalent of about 10 cents per drink would pay huge dividends. By their estimate: 14,987 fewer cases of alcohol dependence, 37 fewer deaths (many of them traffic-related), 13 fewer rapes, 316 fewer assaults, 21 fewer robberies, 67 fewer incidents of severe violence against children and 19 fewer cases of fetal alcohol syndrome each year.

That may seem a leap of faith, but Professors David H. Jernigan and Hugh Waters say they have the real-world experience to back it up - dozens of studies showing that whenever states raise the tax on alcohol, drinking (and excessive drinking) declines. They predict the higher tax would reduce consumption in Maryland by slightly under 5 percent; the public health benefits accrue from that.

The impact on underage drinking is particularly important as surveys show 1 in 4 high school-age Marylanders admit to being binge drinkers, meaning they consumed five or more drinks within two hours at least once in the past 30 days. About one-third of teen deaths are alcohol-related.

The liquor industry is a potent political force in Annapolis and will no doubt offer the usual protestation that the tax would hurt tavern owners and other small employers. But a 5 percent loss in sales seems minor compared to the many lives saved.

The higher tax would raise about $214.4 million in new revenues for a state that is already facing a budget shortfall next year of as much as $2 billion. Without the tax increase, the state is likely to reduce local aid, a decision bound to pressure the counties to raise property taxes - if not next year, then soon.

If history is any guide, lawmakers are bound to be reluctant to raise taxes next year. But protecting the alcohol industry at the expense of schools and other vital services (not to mention bankrupting local government) may raise the ire of voters more.

Polls have long shown a majority of Marylanders favor an alcohol tax increase. Voting nay on alcohol taxes next year may cause producers and distributors to pour a lot more money into campaign coffers, but it won't help state delegates and senators win re-election.

Liquor taxes by state (per gallon)

TOP FIVE Spirits Beer Table wine

1 Alaska $12.80 $2.50 $1.07

2 Alabama $18.78* $1.70 $1.05

3 Georgia $3.79 $1.51 $1.01

4 Virginia $20.13* $1.51 $0.2565

5 Washington $26.45 $.87 $.26

BOTTOM FIVE Spirits Beer Table wine

46 Texas $2.40 $0.20 $0.20

47 Missouri $2.00 $0.42 $0.06

48 MARYLAND $1.50 $0.40 $0.09

49 Wisconsin $3.25 $0.25 $0.06

50 Colorado $2.28 $0.28 $0.08

*All liquor sales controlled by the state; implied tax rate calculated by the Distilled Spirits Council of the U.S.

SOURCE: The Tax Foundation

Readers respond

As someone who has overindulged from time to time and has worked in the liquor industry, both sales and distribution, I wholeheartedly support this idea.

It has been too long; the increase is minimal to the consumer and will help pull us out of our budget funk.

However, there should also be some wholesale changes to the liquor laws - such as direct shipping of alcohol for Maryland residents and a move to the Michigan/Delaware/California model of redemption values for empties. That would make Maryland wineries more competitive and green our state.

Chwirut

This would be step two of a slow death to the business owners. Initially the city thought it would be a great idea to stop smoking in bars and restaurants in Baltimore, but this great idea has hurt the industry throughout the city.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.