ANNAPOLIS — Advocates for health care and the developmentally disabled on Thursday cheered the 50 percent increase in the state’s sales tax on beer, wine and spirits with the hope future proceeds will go to health needs.
Supporters are optimistic that a congratulatory letter from Gov. Martin O’Malley on their grass-roots push to raise taxes on alcohol for the first time in decades bodes well for future revenue allocations.
The tax increase, which takes effect Friday, is expected to raise an estimated $85 million a year. Maryland schools will get about $68 million in a one-time boost during the first year. About $15 million will help about 500 developmentally disabled residents get off a 5,000-person waiting list to receive community services.
O’Malley, a Democrat who signed the measure in May, wrote to supporters of the tax that he backs their goal of investing more of the money in Medicaid, programs for people with developmental disabilities, mental health needs, substance abuse treatment and prevention and health care workforce development. Still, the governor noted the uncertainty that comes with balancing the state’s books. After years of budget cuts because of the recession, Maryland still has a structural deficit of more than $1 billion.
“I will work with you and other stakeholders to ensure that to the extent possible, this goal remains front and center as we grapple with the difficult process of fulfilling our obligation to balance the state’s budget while protecting these and other critically important priorities,” O’Malley wrote.
Vincent DeMarco, president of the Maryland Health Care for All Coalition, said the governor’s letter made him optimistic health initiatives will benefit from the tax in future years.
“I think if the governor proposes this, it will happen,” DeMarco said.
A grass-roots coalition of advocates teamed with a researcher at the Johns Hopkins University to help persuade lawmakers to approve the tax.
Maryland last raised beer and wine taxes in 1972. Taxes on distilled spirits have not been raised since 1955. Critics of the legislation have said it’s a terrible time to raise taxes while the state continues to work its way out of the recession.
The coalition tapped into the state’s need for revenue while also emphasizing studies that show higher alcohol costs reduce drinking and the social ills that come with it.
David Jernigan, an associate professor at the Johns Hopkins School of Public Health, said research indicates the higher alcohol tax will cause a nearly 2 percent drop in alcohol consumption and reduce deaths, cases of violence and alcohol dependence.
“People will drink a little bit less,” Jernigan said. “A few more lives will be saved.”
Carol Fried said her developmentally disabled son David will receive services at home because of the new revenue.
“For too long, too many citizens with developmental disabilities have been in crisis with too little hope,” she said. “Thanks to Maryland’s new alcohol tax, hope has been restored.”