ANNAPOLIS — Senate President Thomas V. Mike Miller said Friday he would be open raising the alcohol tax at a faster pace than it would be under current legislation, but only if the money is used to address a structural imbalance in the state budget.
Miller told senators at the end of the Senate’s Friday that he would be willing to increase the alcohol sales tax from 6 percent to 9 percent. To underscore his point, Miller said the state’s Department of Legislative Services has noted that the budget lawmakers are currently working on is underfunded by about $221 million for the next fiscal year.
Democratic Gov. Martin O’Malley introduced a supplemental budget to address tens of millions of dollars in deficiencies on Friday.
One of the shortfalls resulted from lower-than-expected revenue from the state’s two new slot machine casinos. The governor’s supplemental budget includes about $12.8 million for the state’s Education Trust Fund to make up for it.
The supplemental budget also makes up for deficiencies resulting after federal money that had been expected did not materialize.
One of the biggest deficiencies for fiscal year 2012 resulted from downward revisions in revenue and increased enrollment in the Temporary Assistance to Needy Families, adding up to about $77 million in underfunding. Uncertain revenue assumptions and a high level of benefit payments in low income energy assistance have led to about $70 million in underfunding.
The Senate president said he has received emails from health advocates urging lawmakers to fast-track the alcohol tax increase, but he said they all had plans for how the money would be used.
“I understand revenues, but you need cuts as well, and we just can’t add new programs with this money because it will just continue to compound our structural imbalance.”
A panel of lawmakers is in the process of working out differences between budget legislation approved by both houses.
The Senate has passed separate legislation that would increase the state’s sales tax on alcohol from 6 percent to 9 percent over three years, with the first 1 percent increase taking effect next year. The bill is being considered by the House of Delegates.
By increasing the sales tax on alcohol to 9 percent right away, the state would raise tens of millions of dollars more than expected. By increasing the tax from 6 percent to 7 percent, the state would generate $29 million. Increasing it to 9 percent would raise an estimated $85 million.
House Speaker Michael Busch, D-Anne Arundel, said Friday he was focusing on the state’s budget legislation now before a conference committee.
“There’s a lot of discussion about it,” Busch said, referring to the alcohol tax increase legislation. “But I don’t think it’s fair to focus on anything other than the budget right at this time. In the budget, you’re asking for a lot of things to take place, so I just think that’s what we need to do.”
One of the biggest differences between the two houses.
The conference committee of lawmakers from both houses had been scheduled to meet Friday afternoon to make decisions on differences between the two chambers, but the meeting was canceled. A Saturday meeting that had been mentioned also was called off.
The General Assembly is scheduled to adjourn April 11.