ANNAPOLIS – The House of Delegates gave preliminary approval to a 50 percent increase to the sales tax on alcohol starting July 1.
The bill and companion legislation would raise $87 million for the state, to be split among mental health initiatives and education. Under the plan crafted by the House Ways and Means Committee earlier Saturday, the Developmental Disabilities Administration would receive $15 million from the boon. More than $47.5 million would be used for school construction and another $21 million was previously earmarked in the state budget for schools.
If approved by 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. The House, in a vote, just before 11 p.m. Saturday night, opted to move straight to 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.”
Other lawmakers spoke of the desperate need for new school buildings around the state.
Del. Melvin L. Stukes, D-Baltimore city, said during a committee meeting 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 are canines go into them, and that’s a fact,” he said.
Many delegates, however, complained the House had moved too fast on the plan. Democrats defeated a motion supported mostly by Republicans to delay debate until Monday, the final day of the legislative session.
“This is a horrible way to jam a tax down the throats of the citizens of Maryland,” said House Minority Leader Anthony J. O’Donnell, R-Calvert and St. Mary’s.
Supporters of the bill defeated a series of proposed amendments that included efforts to dedicate all of the money raised to mental health causes and delay the implementation of the tax increase.
“July 4th weekend is as busy as it gets” for restaurants and bars, Del. Eric M. Bromwell, D-Baltimore County, said in pressing for a delay to October 1, which failed on a 54-73 vote.
Others worried the sales tax would make Maryland liquor stores, bars and restaurants less competitive with their counterparts in Pennsylvania, Virginia and other surrounding jurisdictions.
Del. Michael A. McDermott, an Eastern Shore Republican, said Ocean City businesses would be battered by the loss of “all the folks who will slide over the line to Fenwick Island to make purchases.”
During the committee discussion, Del. Joseph C. Boteler III, R-Baltimore County, said raising the sales tax for only one type of good 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 indeed, in years past. The plan then called for an increase in the excise tax of 10 cents per drink.
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 per drink increase would have raised more than $210 million.
Vincent DeMarco, president of the Maryland Citizens’ Health Initiative and 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.”