Tax On Cigarettes

Highlights in Annapolis today:House of Delegates meets at 10 a.m., House chamber.Senate convenes at 10 a.m., Senate chamber.Senate Budget and Taxation Committee hears SB 614 to increase tax on cigarettes, 1: 30 p.m., Room 100, Senate office building.House Judiciary Committee hears HB 214 to help adopted children make contact with their birth parents, 1 p.m., Room 120, House office building.Pub Date: 3/04/98

Quote of the daynot voting for it because I don't see anything in return for the city.", -- Sen. Barbara A. Hoffman,D-Baltimore, vice chairman of theBudget and Taxation Committee,referring to the Schaeferadministration's proposed5 percent gas taxToday10 a.m.: House and Senate convene, State House.1 p.m.: Senate Judicial Proceedings Committee considers a number of bills involving the issue of child abuse, Room 300, Senate Office Building.1 p.m.: House Constitutional and Administrative Law Committee considers bill that would require election of Public Service Commission members, Room 140, House Office Building.

The Montgomery County Council became the first jurisdiction in the state to approve a tax on cigars and smokeless tobacco yesterday.The measure, which will take effect in six months, taxes large cigars at 6 cents apiece, small cigars at 3 cents apiece and snuff or pipe tobacco at 36 cents per 1.5 ounces. Chewing tobacco is taxed at 36 cents per 3 ounces.The Baltimore City Council is expected to give final approval next month to a bill that would charge wholesale cigar dealers 18 to 36 cents for each cigar sold in the city.

The General Assembly's assault on cigarettes is only partly due to health consciousness. In this lean budget year, cigarette taxes are a good source of additional revenue. But there are also other good reasons to place a financial penalty on smoking.Making cigarettes more expensive will inevitably decrease consumption. That's bad news for the tobacco industry, which is why it is so vehemently opposing higher taxes on its products, but it's very good news in other ways. A sales tax on cigarettes, approved yesterday by the House Ways and Means Committee, is likely to have its greatest effect precisely at the age when most lifelong smokers begin the habit -- the teen-age years.

Gov. Parris N. Glendening is backing a $1.50 increase to the existing 36-cents-per-pack tax on cigarettes. An article in yesterday's Maryland section incorrectly stated the proposed tobacco increase.The Sun regrets the errors.The state Board of Public Works agreed unanimously yesterday to accept a tobacco settlement that will pay Maryland more than $4.2 billion over the next quarter-century.Gov. Parris N. Glendening, chairman of the board, called the deal a "major win" for the state, which has been spending more than $100 million a year on tobacco-related health costs.

Why does the government not understand it is running out of other people's money? Politicians think the answer is not to cut spending but to increase taxes. The state of Maryland subscribes to the same cure. It cranks up the tax on cigarettes saying the higher price will deter people from smoking, but if people actually did stop smoking the state would lose that income. Now the state Transportation Trust Fund needs bolstering, so the government is talking about a 15-cent-a-gallon increase in the gas tax. Of course the federal CAFE standards call for vehicles to continue to get better mileage, which means less gas will be consumed and tax revenues will continue to decline, prompting calls for even higher taxes.

Governor pushes for increase in state cigarette taxGov. Parris N. Glendening is urging legislators to approve raising the state tax on cigarettes by as much as $1.50 per package."

A Brooklyn, N.Y., man was being held in the Howard County Detention Center last night after state investigators stopped his car on Interstate 95 near Waterloo and found 2,320 packages of cigarettes without the required state tax stamps.Gutek Hachbaum, 51, whose Lincoln Continental was stopped just before 2 p.m. near the Route 175 interchange, was being held in lieu of $2,500 bail after he was charged with illegal possession and transportation of cigarettes not bearing Maryland tax stamps, said Marvin Bond, a spokesman for the state comptroller's office.

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.