Alcohol tax hike passes Md. House committee
Posted: 5:01 pm Sat, April 9, 2011
Daily Record Business Writer
ANNAPOLIS – Maryland’s sales tax on alcohol would climb to 9 percent starting July 1 under a plan approved Saturday by the House of Delegates tax-setting committee.
The move would raise $87 million for the state. Members of the Ways and Means Committee voted to send $15 million to the Developmental Disabilities Administration and use $47.5 million for school construction. Another $21 million was previously earmarked in the state budget for schools, contingent on the alcohol tax increase.
If approved by the full House and the Senate, the legislation would represent a major victory by health and education advocates, who have seen their efforts to raise alcohol taxes rebuffed for decades by the powerful state liquor lobby.
The Senate had previously approved a bill that would increase the sales tax on alcohol by 1 percent per year, from the state’s standard 6 percent until it hit 9 percent.
“This is the rip the Band-Aid off approach,” Del. Bill Frick, D-Montgomery, said of the House plan. “We’ve heard desperate needs to fund the developmental disabilities waiting list.”
Lawmakers spoke of the need for new school buildings around the state.
Del. Melvin L. Stukes, D-Baltimore, said the city hasn’t seen a new school built in more than four decades.
“Some of those are in such bad condition, we wouldn’t let our canines go into them, and that’s a fact,” he said.
Others, however, worried that raising the sales tax would make Maryland liquor stores, bars and restaurants less competitive with their counterparts in Pennsylvania, Virginia and other surrounding jurisdictions.
“This bill will substantially hurt businesses in my district, in my part of the state,” said Del. Kathryn L. Afzali, R-Frederick.
Del. Joseph C. Boteler III, R-Baltimore County, said that raising the sales tax only for alcohol would open the floodgates for similar special increases in other areas.
“I don’t think we vetted that part of the bill,” he said.
The alcohol tax increase has evolved from what was proposed at the beginning of the legislative session in January and in years past. Those proposals called for a 10-cent per drink increase in the excise tax.
Beer and wine excise taxes were set in 1972 — beer at 9 cents per gallon and wine at 40 cents. The liquor tax was last changed in 1955, when it was raised to $1.50 per gallon.
The 10-cent increase would have raised more than $210 million.
Vincent DeMarco, president of the Maryland Citizens’ Health Initiative and the driving force behind the 10-cent legislation, said Saturday’s vote was still a win.
“We’re thrilled they’re going to 3 percent now,” he said. “That’s a great public health victory for Maryland.”