Legislature may increase tax rates on alcohol by 50 percent

Legislature works toward end of session

April 09, 2011|By Julie Bykowicz and Annie Linskey, The Baltimore Sun

Bearing down on the Monday night end of the legislative session, Maryland lawmakers met Saturday to chip away at some of the weightiest issues remaining, advancing a 50 percent increase to the sales tax on alcohol and approving a plan to decriminalize marijuana for the sick.

The House of Delegates late Saturday gave preliminary approval to an increase in the the sales tax on beer, wine and spirits from 6 percent to 9 percent.

The estimated $85 million in annual revenue would be set aside for school construction, disabilities services and education assistance to Baltimore City and Prince George's County, but that distribution would only be guaranteed for a year.

The House plan would implement the tax more quickly than the Senate proposal, which was to raise it by one percentage point annually for three years. Senate President Thomas V. Mike Miller said Saturday that his chamber would probably be amenable.

"There were questions about phasing it in over three years," said Miller, a Southern Maryland Democrat. He said retailers had raised concerns about adjusting their registers each year, and "others are saying, just get it done so people can get used to it."

The measure was expected to pass the House, and will also need final Senate approval. It would take effect in July.

Gov. Martin O'Malley has said he would consider any new revenue measures passed by the legislature but hasn't specifically commented on the alcohol sales tax.

The additional money from the sales tax on alcohol is not needed to balance this year's budget, but it would help reduce the persistent gap between revenues and expenses.

"Most important to the governor is the allocation of the funds and the extent to which they help reduce the out-year expected deficits," said O'Malley spokesman Shaun Adamec.

Republicans objected, saying the new tax would hurt liquor stores and restaurants.

"We are still in a Great Recession," said Del. Mark N. Fisher of Calvert County, during a debate Saturday afternoon in the House Ways and Means Committee.

Del. Kathy Afzali opposed the tax because, she said, consumers can easily drive neighboring states, hurting small businesses in her Frederick County district. Yet the county, like other rural areas, will only see a tiny fraction of the revenues, she said.

"We are not 'one Maryland,'" Afzali, a Republican, said. "It's ours and yours."

Republicans repeatedly objected to the fact much of the most of the school construction money would be divided in lump sums among Baltimore, Anne Arundel, Howard, Montgomery and Prince George's counties and Baltimore City. Baltimore and Prince George's also will receive millions more in direct aid to classrooms.

The House gave final passage Saturday to a medical marijuana plan that includes a study component and an affirmative-defense option for sick people already using the drug.

Under the proposal, a person arrested for possession of 1 ounce or less of marijuana could present a doctor's note, medical paperwork or the live testimony of a doctor in court as evidence of a medical necessity for the drug. A judge or jury would have to be convinced of the necessity by a preponderance of the evidence in order to find the person not guilty, according to the House legislation.

The Senate has already approved a version of the medical marijuana plan but would need to sign off on changes made by the House. If both chambers agree on a bill, O'Malley has said, he would sign it into law.

Legislative action Saturday sent two alcohol-related bills to O'Malley's desk.

Beginning July 1, wineries that pay a $200 annual fee would be able to ship bottles directly to Marylanders. Residents could receive up to 18 cases per year and would have to show proof of age to the package carrier.

Lawmakers also passed a requirement that would require ignition interlock devices on the vehicles of repeat drunk drivers and those who far exceed the blood-alcohol limits. Drivers who decline to take a breathalyzer test would also be required to use the devices. Anyone who declines to participate would have their license revoked.

The bill does not go as far as some advocates wanted, but it is much stronger than the measure that initially emerged from the House earlier this session. "It is major progress," said Sen. Jamie Raskin, the Montgomery County Democrat who sponsored the bill.

Also moving on Saturday was a bill to help lure a developer for a slots casino at Rocky Gap resort in Western Maryland. Both chambers want to lower the state tax rate on gambling revenues from 67 percent to 50 percent for the next 10 years. The House added an incentive allow gambling until 4 a.m. on the weekends.

A Senate committee agreed Saturday to the House-approved proposal on in-state tuition for undocumented students who have attended Maryland high schools for at least three years and whose families have paid state taxes. Qualified students could attend community college at the in-state rate and continue to pay the lower prices if they transfer to four-year universities after two years.

O'Malley, on his way to a Saturday afternoon meeting at the State House, greeted dozens of students who had come to watch the Senate's action on the bill, though it did not come up.

The Democratic governor said that given the federal requirement for states to provide kindergarten through high school education to all children, even those without paperwork, "it's an injustice and a shame" to make it harder for them to attend college.

"The test of residency should be residence," O'Malley said.

julie.bykowicz@baltsun.com

annie.linskey@baltsun.com

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