Tobacco tax hike nears vote in Md. legislature

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ANNAPOLIS – Maryland’s House is poised to raise the state tobacco tax $1 a pack to pay for better health care for the poor – but the proposal’s chances remain slim in the state Senate.

A bill coming up for a House vote this week would raise an estimated $190 million next fiscal year to pay for much of a Medicaid expansion that would nearly triple how much adults can earn and still qualify for state assistance with health care.

The doubling of the state tobacco tax – from $1 to $2 starting in July – is aimed at chipping away at the estimated 750,000 to 800,000 Marylanders with no health insurance.

Single adults are currently eligible for Medicaid only if they earn less than half of federal poverty standards; the bill would boost the eligibility to 116 percent of poverty guidelines. Children would be eligible if their parents made up to four times the poverty guidelines.

‘This is a significant step forward,’ said Democratic Delegate Peter Hammen, sponsor of the measure.

Obstacles remain for the health plan, however. Many Republicans are planning to oppose the idea, and the Senate has not yet even considered a similar plan.

Already Hammen and other supporters, who include House Speaker Michael Busch, have ratcheted back the measure. For example, the original bill would have followed Massachusetts in requiring people comfortably above federal poverty guidelines to buy health insurance or pay a fine to the state. That provision has been dropped, as have state incentives for small employers to offer health insurance.

Much of the opposition to the health plan centers on the tobacco tax hike. The tax hike would raise a significant amount of cash, but some argue that money may be better spent plugging a projected state budget deficit, not expanding an expensive health program.

Senate President Thomas V. Mike Miller said Tuesday the state can’t afford proposals like the health plan ‘until we get out of this fiscal hell that we’re currently facing.’

Others have raised issue with taking the money from tobacco, called a ‘declining revenue source’ in government circles because as fewer people smoke, the taxes raised from tobacco sales fall. A state analysis of the tobacco tax hike showed it would raise almost $190 million next fiscal year, but just more than $171 million a year by 2012.

‘I think that is fundamentally unsound fiscal policy,’ said Delegate Christopher Shank, the chamber’s second-ranking Republican. ‘I don’t think it is a good policy move to pay for something with a revenue source that is not going to grow as fast as the program it’s paying for.’

A preliminary debate on the health care measure is expected on the House floor as soon as Wednesday. The bill is likely to ultimately pass the House because of its support from Busch and other powerful Democrats. However, the bill’s future remains uncertain in the Senate.

Sen. Thomas ‘Mac’ Middleton, a Democrat who leads a Senate committee where the health plan would likely land, told reporters Tuesday that a dramatic health insurance expansion ‘should be and will be next year.’

Gov. Martin O’Malley has questioned the soundness of paying for health care with tobacco taxes, but he has not said if he’d veto the plan if lawmakers passed it.

Hammen said Tuesday he wasn’t sure the health measure would succeed this session, but he urged lawmakers not to wait on a sweeping health plan. He pointed out that the number of uninsured people in Maryland has grown by 200,000 people over the last four years.

‘If we wait another year, we can expect another 50,000’ with no health insurance, Hammen said, driving people to avoid medical treatment and potentially driving up expensive emergency-room visits.

‘There’s every reason to act now rather than wait one year,’ he said.